I’ve spent a lot of time on here sharing my experience with the home buying process and lessons I’ve learned since becoming a homeowner. In sharing these personal experiences, my objective is always to write something that is thought provoking, informative and leaves my readers feeling more empowered on that topic than before.
This particular post has been inspired by the age old debate in financial planning, is it better to rent or buy a home? It’s an argument I see over and over again on Twitter, LinkedIn and most recently on Instagram. Prior to being a homeowner, I really appreciated the benefits that came with being a renter. Namely, not being responsible for broken appliances and having someone to call to fix any issues that came up and then not having to do the work myself. Other perks include, not being directly exposed to increasing HOAs or rising property taxes. This post is not a piece on the pros and cons to owning a home vs. renting. If this is something you are interested in reading more about, I’d suggest you take a look at one the many thorough articles written on this topic below.
Instead, I want to use this time together to talk about what led my husband and I to purchase a home and how we view our home within the context of our financial plan. As I mentioned earlier, I share this to hopefully provide you with a new perspective on homeownership.
The Long Term Plan
When my husband and I moved into our first apartment in Chicago after getting married we knew it was a temporary move. The plan was always to have our city experience for a few years and get out. While his job was in the financial district, the bulk of my job was based out in the suburbs and I knew the hour plus drive, each direction, was not sustainable. From the beginning of our marriage, we were actively saving for a future home in the suburbs and spent time researching the various towns in search of the perfect suburb long-term.
We loved the city, it was a middle ground between both sets of families and we loved being walking distance to the best parts of Chicago. There was never a set timeline on when we wanted to be out of the city but we knew at some point it would make more sense for us to move closer to my job and that the prospect of owning land and having space to expand was very exciting.
COVID in the City
Our story begins in March of 2020 when the murmurings of COVID and threats of lockdown in the city were just starting. The weekend before everything changed and we were forced to work from home in a tiny one-bedroom apartment in River North, we went out to the North Suburbs to see a house that was on the market and checked most of the boxes we were looking for in a home. Our lease for our apartment was coming up in June and we had started the process of meeting with a mortgage broker to understand our budget and started touring homes to see what our price point looked like.
The first home we toured was nearly perfect, but we needed a few days to talk about the reality of packing up our life in the city and moving to the suburbs. By the time we made the decision we were ready to put an offer on a home and signal the end of our chapter in Chicago, we found out the home had another offer that was already accepted.
I’m going to be real here, I cried. I cried over a house I had only just seen and was already mentally moving in our furniture. It wasn’t just the visual of our things in that home, but it was also visualizing our future life together in the suburbs. It was sad and a painful reality, but it was at that moment we both realized that we were serious about buying a house in the suburbs. As the weeks went on, the reality of a global pandemic and countrywide lockdown set in. Working from home on a card table five feet from my husband was not a long-term solution so we turned up the house hunt.
The Blue House
I got a text message from our realtor pointing out a blue house that popped up on the market in our ideal neighborhood. I don’t think I’ve shared the detail on my home “wish list” but I was one of those obnoxious wives on House Hunters that wanted it all and under budget. Needless to say, I had a pretty specific wish list and this house checked (basically) every category and was within budget. We couldn’t believe our luck and scheduled a home tour for later that day. My hesitation was that it didn’t have the same curb appeal as some of the other houses we had been touring. I blame HGTV for setting my standards for curb appeal high.
I was shocked at the quickness of the housing market during that first part of the COVID crisis. My initial assumption was that the market was going to be slow making it a buyer’s market because no one was actively looking at homes in the middle of a pandemic. Boy, was I wrong. We were encouraged to see the Blue House right away and showed up a few hours later to tour the property. We signed a waiver attesting we were COVID free and did a walkthrough of the house masked up and wearing gloves.
It was love at first sight. We put an offer in that evening at 7pm and had our offer accepted at 11pm after avoiding a potential bidding war with the help of our wonderful realtors. It happened so fast. We couldn’t believe that we were going to finally be homeowners, a financial goal we had been talking about for years. We were overwhelmed with joy but then realized we still have two months to go until our closing date and moving day. The longest 60 days of my life!
The Meaning of Home
So why am I sharing all of this? I share this all to point to the reasons we did and didn’t buy this house. Not once did I mention that we bought this house as an investment because it was in a “hot” up and coming area. In fact, it is well documented that real estate, on average, is known to be a poor investment earning on average 3% return over the long-term. I also didn’t say we bought this house because it was more cost effective than our one-bedroom in River North. Bottom line, we didn’t buy a house as a financial investment towards our retirement plan or to right size our cashflow, we bought the house because of what it means to us.
I had a conversation with my dad at the beginning of the year about using the money we had saved for a home to put to work in the market instead of buying a house. I shared with him how we had it all figured out that we could keep renting long-term and instead put our money in the market working harder for us. My dad, in all his wisdom, said something that stuck with me and really put the home buying debate in perspective for us. He said that a home is the backdrop to your life and will become the constant for your family. That hit me over the head like a bag of bricks (or like that time I smacked my face on a front 2.5 and got a black eye). You guys knew I was a competitive diver…right?
He went on to talk about how the home was a backdrop to our family growing up and that if my parents had made the decision to rent there would have always been the potential that we’d have to move when the owner jacked up rent or decided to sell. I had never thought of it in that way and was immediately so grateful to have had my childhood home as the backdrop to my life and all the incredible memories and experiences it provided.
We purchased a home not because it was a good investment (too soon to tell anyway!) but because of what it means to us. It means a backyard for our pup to run around and our own space to enjoy the outside, it means separate working spaces for my husband and I (on separate levels, might I add) it means the closet of my dreams and space for our family to one day grow. It may not be the popular decision in the personal finance world, but it was the right decision for us and I will not be convinced otherwise. There are some things in the world worth paying a premium for and this is certainly one of them.