Do Buyers Factor In All Expenses? – “Owning without a huge comfort margin is asking for some stressful living.”

AG at December 10th, 2010 at 10:00 am“When we bought our first house, ages ago . . . when dinosaurs roamed and munched on palms growing at the 45 parallel . . . We bought way below our means and thought we were set. No one told us about the 5-10% of the purchase price per year that a used house was going to need in repairs. Stuff had been done by the previous owners, but it had been done very badly. This wasn’t even upgrades. We gave up on even starting the upgrades for four years while we scrambled to get the fundamentals under control. And this was without some of the things our friends suffered with (collapsing basement wall). It took nearly a decade to put the house fully in order the way we wanted it, in which time we paid for it over again.
I like owning. I like taking a crowbar to a wall when the mood strikes. I know it’s just me that college and renting and misery of rental living conditions do not really apply to adult life, but I can’t get that out of my head. But owning without a huge comfort margin is asking for some stressful living, one hiccup from renting again or moving back to your parent’s. We were stressed and I thought going in there was no way that was going to happen.
I learned through this that assuming you will get lucky is not financially prudent planning.”

3 responses to “Do Buyers Factor In All Expenses? – “Owning without a huge comfort margin is asking for some stressful living.”

  1. I totally agree. I once owned back in the early 90s. Took a far smaller mortgage than the bank was willing to give me. Both cars were paid off and there was virtually no other debt to speak of. Then we bought some furniture. Then my daughter was born. Then both cars were worn out and needed replacing. Bills, bills, bills! We didn’t make it and ended up renting again. We hadn’t even started the repair to the non-code sun deck (no railings on one side so you could dive into the above ground pool) and the holes in the walls the previous owners had punched to accommodate a window mount air conditioner (placed in the hole in the wall not the window) and a large mass of cables related to their old-school satellite dish.

  2. Yeah, that seems to escape a lot of people. I had that discussion too when they told me that for the price of rent I could get a mortgage.

    When I started to remove (from my rent) things like likely property taxes, condo fees and 15% as “repair fund” I arrived at less than half of what my rent was. When I asked where I could get a mortgage like that I was told I am doing the math wrong.

    I really really don’t get it. Can the pressure (self inflicted?) on people really be that big to completely throw out any basic math skills and replace them with “But if you’re renting you’re throwing money away” thinking?

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