5 Reasons I Am in No Hurry to Buy a House

My fiance and I have been joking around about this (well, mostly me) recently.  When you talk about your wedding with your friends and family, there seems to be three questions that always enter the conversation.    Where is your honeymoon?  When are you having a baby? And when are you going to buy a house?   I love the questions and have a great time talking about them.  I just think it is funny how they always seem to come up!  I’m sure most of you out there that have gotten married know exactly what I am talking about.  The first two are easy answers, and unlike DivHut, you won’t be reading about a Baby Diplomat dividend growth investing fund anytime soon.   The purpose of this article is to focus on point number three, when are we going to buy a house?  I spoiled the suspense with the title of the article, so let’s take a look into why we are in no hurry to purchase a house after our wedding.

pay down the mortgage or invest

Reason #1:  The Mortgage – Ah, the mortgage.  That long-term debt takes forever to payoff.  You know, the one that is such a burden that Lanny is constantly trying to find the perfect balance of using extra cash to pay down his mortgage or invest.  Right now, we get a great deal on our rent.  We aren’t looking to purchase a starter home and then upgrade down the road and Ideally would like to move once and raise our family in this home.   What this means is that our first home won’t be the cheapest and our mortgage will be larger as a result.  Our price range will result in a mortgage payment of ~$1,000 without factoring taxes into the equation.  Property tax rates in our county are out of control (ask Lanny), which could result in an addition $4,000-$6,000 annually depending on which suburb we select.  Yeah, no thanks, I’m not in a hurry to incur those costs.

Reason #2:  Increase Monthly Expenditures –  The bills don’t stop at mortgage and taxes.  What about homeowners insurance?  On average, homeowners insurance is over $650 annually in Ohio.  What about the cost heating/cooling an entire house versus the second floor of a duplex?  I know one place that will benefit from this… FirstEnergy!  Oh yeah, did I mention that we will have to start paying our own water bill?  Fortunately for me, the water bills keep climbing higher and higher in our county!  My head is starting to hurt just thinking about these extra costs on top of the mortgage and tax bill.  Oy!

Reason #3: The Upfront, Start-up Cost – You can’t just buy a house and leave all the rooms empty that you can’t fill?  What is the fun of that.  You want to buy a house and furnish it so you can enjoy every inch of the place.  However, if you don’t already own a house or have a parent/friend that is looking to downsize their property, chances are you are going to have to purchase a lot of furniture to furnish the place.   There are many ways to do it frugally and trust me, we are going to exhaust those options.  But that doesn’t mean there isn’t a cost and it does not sting your wallet.   I can assume that I won’t be purchasing a stock for at least 30 days when we first move in, and it won’t be for the reasons that Lanny mentioned in his article unfortunately.

Reason #4:  The Unknown Repairs – Alright everyone, I have a question for you.  Let’s see if you can guess the answer to it.  One of the two of us are handy and the other is not.  Can you guess which one it is?  Bueller?  Well, if you guessed me, then I would not recommend buying a lottery ticket because you couldn’t be more wrong.   Lanny is much handier than I am (exhibited by some of his car repairs over the years).  Obviously I can learn and I know that people would gladly teach me when the time comes.   But if I am not able to easily repair many items in my house or friends/family are unavailable to bail me out, the what? The cost to repair can become very expensive.  I’m not naive enough to believe that each house is perfect and the house inspector identified every single flaw in the house during the pre-purchase inspection.  Unless you build new, every house has a few hidden/unknown repairs just waiting to pop its ugly head up at the worst possible time.   At this time in my life, I don’t really have an interest in dealing with those moments or hiring somebody to take care of them.

Reason #5:  We Want TIme to Relax and Enjoy Life –  I know the title of this point sounds ridiculous, but our life has been busy as heck over the last few years and it is flying by.  If you haven’t caught on over the last few months, Lanny and I have been busy as all heck with work since it is our busy season.  Plus, for me, over the last year, I have changed jobs twice (For more information on this, see my articles about each chapter here and here) and lived through many busy seasons before that.  My fiance has been a machine ever since we were engaged.  She is working (was full-time and then switched to part-time), is a full-time student, and is planning a wedding.   I really can’t complain when I see what she is going through.  The point of this is not to complain or ask for sympathy.   It is just that we haven’t had too much time to sit back, relax, and enjoy life as a young couple that was dating, engaged, and then married.  Purchasing a house is a lot of responsibility and it will consume a lot of our time and resources.  Before we settle down and begin our family, we want to take some time to soak it all in and enjoy life as a young married couple.  I know it may sounds ridiculous, but if we don’t take the time now to enjoy ourselves we know we will regret it one day.   It is not that buying a home will prevent this, but it sure as heck will get in the way of it.

I’m sure I could have come up with 50 reasons why I don’t want to buy a house right now.   There are many pros and cons to owning a house.  You build equity while getting to build a special place for you and your family.  Just take a moment to think about how many memories were made at your home?  The birthday parties, family dinners, etc.  We can’t wait for that chapter in our life, but we are not in a rush to get there.  Financially, it just doesn’t make sense for us to rush to become homeowners and we will take our time to find the perfect place, at the perfect time, and most importantly, at the perfect price.

What are your thoughts on the list?  Do you have any advice for us?  Can you think of any other important reasons why we shouldn’t rush to buy a house?  Or do you think we are misguided on this list?  Do you disagree with any of the items on my listing?  Please everyone, share your home buying experience with us.

-Bert

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32 thoughts on “5 Reasons I Am in No Hurry to Buy a House

  1. #5 is all the answer you need. A financial rebuttal could be made to every other reason you make, but the bottom line is it’s not the right move if it doesn’t feel like it. One thought — is the duplex for sale? Perhaps your ‘starter home’ could be your ‘starter investment property’ with a different set of pros and cons.

    • Charlie,

      Thank you so much! I wish it were haha Unfortunately, the landlord is not looking to sell this anytime soon. Trust me, I would be all over this place if it were. He has kept it in great shape and the guts of the building have been maintained very well. IF I were interested in owning a duplex, it would be a great place to start. Some definite pros to that arrangement for sure, but I would have to sell the Mrs. on it 🙂

      Thanks for stopping by.
      Bert

  2. Hey Bert. Go have fun and enjoy each other before you jump into a mortgage. What’s the rush? There are plenty of time. If you do buy a home, make sure you have an income suite so you can make a bit of money.
    Keep building up your portfolio and use it as energy. The more you save, the more you want to save.
    Good luck to you 2 and best wishes. Cheers buds.

    • Thanks HUSTLER! Life is too short not to enjoy it, right? We have so much of our life to look forward too and it will fly by. The last thing I want is to look at this portion of my life and think about what it could have been versus what it was. An income suite is a great idea and a nice way to save some money and reduce the cost of the mortgage. WE will have to see how that fits into our plans.

      As always, thanks for stopping by!

      Bert

    • Let’s just say that is what I was referencing in the article! I won’t confirm or deny the fact. Trust me, I know all about the increase in water bills in Cuyahoga County and I know a lot of fellow people in NEO are not happy about it. Are you in the area? What locations are you thinking of moving to? Let us know!

      Bert

      • Hey Bert,
        I’m on the west side near a village by a Bay 😉 I can’t afford anything out here. I don’t know how people do it, man. My rent is 1100 a month. 300 student loans. 250 car payment. 150 dollars for Time Warner to rip me off. 200 in utilities. Maybe 200 a month for food. (eating only 50 bucks a week – yeah right!) and 200 a month for “fun” (again 50 a week to have a life?- yeah right!).

        A 50k a year job, which I think is pretty darn decent money, nets you about 35k after taxes (assuming a simple 30% deduction). That’s about 2800 bucks a month. Those bills above are about 2400 and I think I’ve estimated low. I save every extra dollar I can into retirement and a simple dividend growing portfolio (MSFT, JNJ, MO, XOM, T) but I’m losing faith in the American Dream.

        I agree that I “could” find cheaper rent but I do value my time, and moving farther away from work puts me into an hour traffic jam every morning. I could get rid of cable – but I like to relax and watch my sports which don’t stream on Netflix or Hulu. The only feasible solution I can come up with is a roommate but I also enjoy living alone so that’s not really an option.

        I’d love to discuss how you guys got the dividend snowball rolling but right now I think it would take an avalanche 🙁

        • Neil,

          That definitely is not the cheapest part of the city, that’s for sure. I hate to hear that you are losing faith in the American Dream. It sounds like you are trying to find the balance of lifestyle vs. spending, and it is definitely hard. I know cutting your cost for cable is hard if you like sports. Your alternative is that you go to a bar to watch big sports game and in the end you end up paying more in alcohol than you would the nice cable package. Do you have to use Time Warner? Are there other cheaper options available to you? It may take some research, but I bet you can slowly begin to bring down the monthly expenses you listed with enough research, discipline, and creativity. Have you thought about a side hustle on the side to generate some extra capital? Possibly a blog!

          Every dividend snowball starts out as a snowflake and gets bigger over time. You have to start somewhere, right? Even if your first dividend payment is $1, it sure as heck beats $0. Then the next payment gets larger, and so on. It takes time to build it. I promise you that once you start it will become addicting and you will find a way to claw every dollar you can into your account to purchase that next stock.

          If you have any specific questions about saving and want to bounce any ideas off of us, feel free to shoot us an email!

          Bert

  3. As a current homeowner, I can verify that all of your reason are true. Being a homeowner comes with many responsibilities.

    but look on the positive side:
    I figured, when I was in graduate school, I was doing 60 hours, plus 20 hours working to make a living. Now, I work 45hours a week, I consider this a vacation. 😛

    I turn my primary residence into a triplex. So it’s become my little part time job, while I’m able to deduct all the taxes, expenses on fixing the house, and depreciation, etc. All and all, other than the $90K (start up cost – 20% downpayment, +$10K refinance, + $10K refinance again to reduce the payment), I’m slowly letting my tenants paying my monthly payment while gaining equity on the house. Same thing if I was going to rent an apartment, I have to deal with neighbors, this time I choose my own neighbors.

    • Vivianne,

      I love your glass half full attitude! There are definitely many pros of home ownership and I can’t wait to enjoy them. However, I just want to wait a little longer to reach that point haha

      Good for you for turning your place into a triplex and exponentially increasing the earnings potential. You are doing it the smart way by having the tenant support. Has there been a lot of repairs/wear and tear that have resulted from your tenants? It sounds like you have the perfect set up and are earning really cheap equity on your house. It sounds like you really enjoy this side hustle and you are having fun taking care of tenants and being a landlord. Love the enthusiasm, it is infectious!

      Bert

  4. There are always pros and cons of owning. Ultimately it’s about your personal preference and what fits you in your situation. There are people that are life time renters and there’s nothing wrong with that.

    We are owning because the pros outweigh the cons for us. It was a simple choice.

    • Right Tawcan. It seems like each situation is different for each person. What’s funny is I could put this list together two years from now and realize that there are way more pros than cons. It all depends on your situation and works best for you and your family financially.

      Bert

  5. I’ve owned a bunch of homes in my past. I’m going on year 6 of renting and I love it. Whenever something breaks my landlord fixes it. I’m also not on the hook for real estate taxes, which are insane in my city. I’m not knocking home ownership. For me at this point in my life renting s a better solution. My kids are both almost out of the house, once that happens, I may not even stay in the United States. Not owning a house makes it easier for my wife and I to sell our furnishings and try new cities.

    • IH,

      You definitely highlight my favorite parts of renting right now. I am not on the hook for anything and the burden is shifted to your landlord. You do bring up a different point, the mobility that renting allows you to have. A house isn’t exactly a liquid investment and the cost to selling is a significant hurdle that will prevent you from chasing that exciting move to a different city or country. My fiance and I have kicked around moving for a few years, trying something new, and experiencing a new city or a differnt part of the country. However, we have to decide soon before buying a house!

      Thank you very much for your insight. Just out of curiosity, what cities/countries are at the top of your list if you decide to move around?

      Take care.

      Bert

      • I was able to EU citizenship for my wife through Ireland. She is second generation here in the U.S. Ireland allows up to 3rd generation to gain citizenship if they jump through a few hoops. Now that my wife has citizenship we can live and work in any EU country; all I need is a spousal visa.

        So, in three years when my youngest starts college we plan on working for at least a year in NYC. After that, if I leave my company, I can consult pretty much anywhere. In my field, Ireland, England, Germany, and Australia all offer great 6 to 12 month contracts. If I’m lucky, we’ll hit all of these countries and more. If we find a place we really like, we may relocate. The EU is attractive in retirement thanks to universal healthcare and pensions.

        It may never come to fruition, but I’ve been preparing us for this lifestyle for some time.

        • That’s a great policy for Ireland. A smart way to keep bringing people back to the country and allow people to keep ties to their heritage. It is great that you were able to take advantage of this program and reap the rewards. Travel to the EU has to be so much easier now that you have the citizenship.

          It sounds like you will have some great travel options to choose from. If you and your wife are open to the adventure then you better take advantage of it! I’m pretty jealous and all of those places would be a cool place to spend an extended period of time. Australia is particularly interesting sounding to me.

          If you want it bad enough, you will make it happen. That’s how I view some things in life! You sound awfully hungry to me. Take care.

          Bert

  6. I can’t really blame y’all one bit for wanting to delay getting a house and all of the associated expenses. In the end it’s about what is best for y’all, you know the whole personal finance is personal thing. Yes you’re not building equity since you’re renting but your stress level is also much lower as a result. You have a larger gap between your income and expenses which allows you to make up for the lost equity. The unsettling thing is the behavior aspects of owning a house. Many people need to buy a house because they won’t save the money. It’s a bit of forced savings into an asset.

    Take full advantage of your life while things are much simpler. That’s something I wish I had done a bit more before I got married, bought a house and now we’re expecting in July. Once you start adding all of that stuff to your life things become more complicated.

    • JC,

      Thank you very much for the advice, much appreciated. First off, congrats on the future baby! That’s amazing news and I can’t imagine how excited you are. We can’t wait to get there either and are ready for that chapter. However, we want to make sure to enjoy as much of the current chapter while we can. You can’t make up for the lost time once it is gone.

      Bert

  7. Hey Bert,
    As I’m about to leave in a few months (only 74 days!) on my road-trip, I seriously question the point of having a house. I’ve been an owner since the age of 24. Great experience, but darn expensive! Your last point (We Want Time to Relax and Enjoy Life) is now make me wonder if I want to keep my house when I get back!

    The only things is that it gets complicated once you have kids to not have a house 😉

    Cheers,
    Mike

    • Mike,

      Are you exited for your trip? Where are you going? Excited to hear and read about your endeavors. It will definitely get complicated with kids. We have determined that we want to have a house to raise our family in, so we will own before that phase of our life begins.

      If you sold your house, would you move to a new city or travel around to multiple cities? Is this trip a trial run for the future?

      If I don’t talk to you beforehand, enjoy your trip!

      Bert

      • Hello Bert,
        we are all very excited (kids would leave tonight! hahaha!).
        We are starting in Quebec, Canada, then Ontario and we enter the USA to go toward Gran Tetons & Yellow Stone (many stops before in Chicago, Mount Rushmore, etc). Then up again to Alberta and CB in Canada and we do the whole West Coast. We enter in Mexico and go down to Costa Rica (we will live there 3 months). Then, we head back via the East Coast.
        You can see the first half of our itinerary here; http://www.thedividendguyblog.com/2016/02/22/our-final-itinerary-on-a-map/

        I’m taking a sabbatical at work, but I wish I will be able to make enough money online during this trip that I won’t have to go back to my day job. Eventually, I’d like to travel around the world but we will have to find a solution for our kids ;-). In the meantime, we start with North & Central America!

        If you’d like, we can pass by and meet for our coffee (depending where you live 😉 .
        send me an email!
        Cheers
        Mike.

        • Mike,

          That itinerary looks amazing. I’ll have to talk to Lanny and see if we can find a time to meet up. You are driving right through Cleveland between Niagra Falls and Chicago. You’ll drive through the city on I-90. Hopefully we would both be in town and not travelling for work and we can grab that cup of joe. One of our blog goals is to meet another dividend blogger in person, so that would help us out a ton.

          This will be a great experiment for you. Not too many people get the chance to see if their blog can support them full time without jumping into the deep end. You’ll get an extended look at the earning power of your blog. If it isn’t quite where you want it to be yet, then you can return to work. But if it does work out for you, well then, the rest will be history. I’m pulling for your. Please make sure to keep us in the loop about it and let us know your progress.

          Thanks for stopping by!

          Bert

  8. Hey Bert,
    We appreciated both for what they are:
    Rent = flexibility, predictable cashflow, convenience
    Ownership = cheaper (for the exact same property), possibility of capital gains/income property over time, “security” (in the sense that your landlord may decide to sell; if you pay the bills, your house is yours).

    We have changed our view from “our place” to “investment opportunity” on our new home. Over the years we have kind of lost the emotional attachment to a property. Makes for a lot easier decision making 😉
    Cheers

    • Team CF,

      Oh yes, anytime you can take emotion out of the equation the better. That has to be the biggest road block to making the right decision, because it is not a rationale thought or feeling most of the time. You go strictly off impulse and that’s when mistakes can happen.

      There isn’t a right or a wrong answer to this question. It depends on what you want in a property and which list of yours is better for your current financial situation. I am not sure if all properties are cheaper though, and we would definitely pay a lot more jumping from renting to owning. However, to continue the theme, each persons situation is different, each rental market is different from city to city, and so on.

      I appreciate you stopping by and taking the time to comment. Cheers!

      Bert

  9. Buying a home needs to feel right. If you are leaning away from it then it’s probably best to keep renting until you feel like it’s the right time. Renting may cost more, but if you decide to sell your home then you’re tossing out a huge chunk of change in realtor fees, taxes, etc. If you buy the right home the first time then you don’t have to worry about that. Also, investing in customizing the house won’t go to waste if it’s your forever home. I would suggest that you enjoy the last few years you have to not be tied down with a mortgage. Either way, good luck with it!

    • Very valid point Dividend Insiders. I’ll be much more likely to spend on upgrading the house and making it exactly how we want it to be if I am going to live there for a long period of time. Right now, it just doesn’t feel right and my gut is telling me to hold off. Buying a house is just too expensive to feel unsure and uneasy about the process. When the time is right to buy and we find the one, then we will jump on the opportunity and never turn back!

      Bert

  10. Hey Bert,

    We definitely agree with your points 1-4. There is a lot of behind-the-scenes expenses from owning a house, much more than just the monthly mortgage payment that people don’t include in the cost of owning a home. It costs so much more! We are also renting at the moment, for a huge amount cheaper than what we could afford to buy (well, we just can’t buy anywhere at the moment as we’re doing IVF, but even if we could, we couldn’t afford where we rent).

    We will buy at some point, but at the moment we will be investing our money to build our wealth, rather than saving all our money to then get into huge amounts of debt.

    Tristan

    • Tristan,

      Isn’t it nuts. I couldn’t believe how fast the costs were increasing when I was writing this article and estimating the impact of 1-4. It sounds like we are in the same/similar situation here. Rent for now, buy one day down the road when it is right for us. I’m for whatever strategy helps get us to financial freedom the fastest.

      Take care and thanks for stopping by!

      Bert

  11. I think approaching the purchase of a house truly as an investment, on discount, and a little luck is the only way to make your primary residence amount to more than a forced savings, with the ability to lose through depreciation, maintenance and possible capital expenses. The way most people falsely assume that their house is their “greatest investment” have not done their homework or applied the criteria to truly evaluate it for it’s investment potential.

    Great article, brings up some excellent points.

  12. Hello. I believe becoming minimalist based on zen-habit is the answer.

    http://www.wikihow.com/Live-a-Simple-and-Peaceful-Life
    I love its Method 3-2.

    Having a tiny house and a simple office building, both without debt, makes your life peaceful.

    I did that 9 years ago, just before the Lehman shock. My friends were expanding their business at that time, which I thought too weird – there is nothing perpetuity in the world.

    Several years later, they knew that my decision was right and they were wrong.

    Now I’m into American & British stocks such as XOM, CVX, RDSB, HSBC, GSK. Their high dividends are really astonishing. I hope their high dividends may make my retirement plan beautiful.

    In conclusion,
    1 Hard work & Frugal life,
    2 Deposit,
    3 House and office without mortgage,
    4 Stocks, but keep in mind, you need cash & deposit to avoid loss cutting. – Oh, you are the excellent CPA and you already know that!!! Sorry for my useless extra word.

    Thank you for reading my comment. God bless you.

  13. All of your reasons make sense. But all the millionaire blogger – no none sense landlord, goodofroot, retireby40, financialsamurai, gocurrycracker saw their networth jump the highest with their property investment. Regardless, of gocurrycracker posted several post against owning properties, he was investing heavily with a partner turning over houses, and he’s still one an apartment in Seattle. We all know the reason why, Microsoft, Amazon, Boeing and a bunch of start ups are in Seattle area, the recession hardly put a dent on the house price, even when they come back from their years of traveling abroad, if they sell now, they might not able to get the same apartment for the same price, now, the tenant is paying and you darn bet the tenant cover the mortgage all expenses, and their housing cost oversea.

    Of course owning a property come with tons of obligations, take a look at my blog, it’s totally dead hahaha, because I don’t have anytime to blog lately. Too many tenants turnover, appliance fixing, remodeling, etc. unless you own with a purpose – plan on living there forever, rent out some of the space so you can deduct from taxes, tenant cover all of your cost other than the initial investments, it’s true that it doesn’t make any sense to own.

    • Vivianne,

      haha yeah, real estate investing can be a time crunch and you have definitely taken on a lot, adding a ton of hours to your plate. To me, real estate investing is a whole different animal and takes a different mentality/mindset/decision making process than buying a house for our family. Property investing has always intrigued me, but it requires a lot of capital and time. For now, my main focus is on building my dividend income and growing that first. Then possibly one day I will branch out and diversify my income streams via real estate investing.

      Thanks for the comment. Best of luck with your new properties!

      Bert

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