Is owning my home worth it?

[Daisyedwards800]

My SO and i have always lived in apartments as adults (raised in SFHs growing up).  We used to pay $1,850 for renting a 2 bedroom.  This year we bought a house and I haven't felt good ever since.  I keep wondering if this is a good financial move.  Stats below:

Income:  Combined $280,000 without bonus/overtime.  $365,000 with bonus/overtime.  His job is very secure and my profession has extremely low unemployment so I'd be fine finding a new job if need be but maybe at a slightly lower pay.  It is really hard to estimate our take-home because he contributes to a pension (this will pay half his final year salary including OT, potentially in 3.5 years) and I max out my 401k but variably.  Right now my take-home is $4,300 biweekly and his is probably between $3,200 and $4,100 biweekly depending on the OT, after health insurance, 401k etc.

Rent:  We kept our city apt since he works shifts and sometimes needs to crash there, and I work nearby too - but we got a roommate so our rent is now $700 a month there.

For our retirement plans, I have about $470,000 in pre-tax retirement savings and $35,000 in a Roth.   I also have $5,000 for emergencies.  He has about $270,000 in pre-tax 457 and $270,000 in a Roth 401k.  He also has the aforementioned pension plan as well as $100,000 for emergencies.

House:  Value at $999,750.  We put a fair amount down so our mortgage is $667,500.  Our HOI is $3,000 a year and taxes are $10,000 a year.  Even at this price there is stuff to fix up because we are in a high cost-of-living area.  So far we've been spending an additional $1,200 a month on utilities and house projects and I anticipate more since we need to replace the floors and plant some shrubs/trees. 

So our PITI is $4,498 a month and rent is $700 a month.  Interest rate is at 4.5%.

The dream of most people in our peer group is to own a home and do the whole thing.  We don't have kids yet (trying).  At this point, it's very nice to have all our stuff in one place.  We have large detached garages.  We've always kept some stuff in storage unit, some stuff at our parents', had a "boat" club for $3,000 a year to keep canoes, Sunfish and 18 foot small boat - this doesn't cost much in our new location.  We have a trailer and can just put in the water for free, so it's just a little maintenance here and there that he does on his own.  So that is great. 

But overall...having a house feels like too much room.  We shared a studio for 4 years.  We've shared this small 2 bedroom for years.  It's almost like...do we need all this?  Or are we just used to the apartment living?  I can't help but think that having a house with all the work that entails is not really that important.

I am a Xennial/Millennial cusp and so maybe our generation is just not the same as prior ones.  Will I get used to this?  We bought in June.

[NorthernIkigai]

I’m all for condo living (living in a two-bedroom one now with two kids, and about to switch to a larger one for the additional bedroom and half bath), but it seems to me you need to give this some time. You’ve only lived there for 2 months? You might have kids in the near future? How big is the house, is it just that it’s a SFH or is it annoyingly big? What is the area like?

Since you’ve literally just moved in and now have both the house and the mortgage, I’d focus on getting to know and like the area and see how it feels in a year’s time or so.

[Daisyedwards800]

It has 3 bedrooms and isn't that big, maybe about 2,000 square feet.  It's a little under an acre so that is where the landscape expense is coming in.  It is very private with privet hedges surrounding so I like that.  It just feels WEIRD.

[ChpBstrd]

It sounds to me like the pressures and costs of home ownership have not been offset by changes in the  hassle from renting the apartment, having a short commute, or having a fleet of boats. You kept the most expensive and time-consuming aspects of your former life and added home ownership on top. You are now a bit over-subscribed.

If the plan is to have kids, you’ll need to shorten those supply lines and economize on the time sucks. There will be no boating with a 1-4 year old, so drop the boats before getting pregnant. The option to crash at the city apartment after a crazy long day will not work in that scenario either - unless you want to get into the classic “I’m single parenting” fights or fights over whose career takes the hit.

You’re both earning impressive incomes, but I worry that your $5200/mo / $62,400/year housing costs will block you from certain options you may want to take in the future, such as one of you taking a couple years off to raise the youngster. If you have a long commute, will you be able to consistently make day care drop-off and pickup times? The house may be luxurious, but if it doesn’t work it just doesn’t work. Efficiency is far more important than acreage and nice hedges.

Were there other options to get into home ownership while not committing to crazy commutes, a million dollar purchase price, or a level of tax+HOA that exceeds my entire house payment? E.g. what does a 2BR condo close to work cost? If more efficient options existed, why didn’t you take these options?

If you think you made a mistake, the best time to start undoing that mistake is today, despite the sunk costs.

[Morning Glory]

Owning a home is sometimes worth it, depending on the market, but it's definitely not if you still have to rent an apartment to be close enough to work. 

What you own is essentially a million dollar vacation house.  I used to know a bunch of people with cabins who spent every weekend driving there and back and doing chores, which seemed pointless to me. I mean,  you can afford it, if that is your priority, but it sounds exhausting.  How long is the commute?How many nights per week do you both actually sleep there? Does your husband have access to a sleep room at work so you can drop the apartment? How much is a house that's close enough to work that you can actually live in it? (bonus if it's also smaller and easier to maintain. 2000 sf is huge)

I get wanting your own space. I did the whole country acreage/ homestead thing, and sold it in part because of burnout/ lack of down time after having kids, and that was biking distance from work.  I couldn't imagine a killer commute on top of that. I was a homeowner long enough that there are little things that I really hate about renting (shows its not generational,  just an adjustment thing),  so I'm looking for a house again, but it will be much smaller. 

[Daisyedwards800]

A house near work would be closer to $2.4 million for similar quality and it would have all the things I dislike:  noise pollution, pests (basement might have cockroaches or rats), last year a big flood ruined the basements of homes nearby, small rooms, no outdoor space, no storage, no place to put cars or store seasonal items, our parents would never drive into the city to see us because it's a congested area and not that fun to drive (parents over 70).  We can't afford $2.4 million : D

Rent for an apartment in our city is averaging $4,000 so $700 is worth it for us.

[lifeisshort123]

A house near work would be closer to $2.4 million for similar quality and it would have all the things I dislike:  noise pollution, pests (basement might have cockroaches or rats), last year a big flood ruined the basements of homes nearby, small rooms, no outdoor space, no storage, no place to put cars or store seasonal items, our parents would never drive into the city to see us because it's a congested area and not that fun to drive (parents over 70).  We can't afford $2.4 million : D

Rent for an apartment in our city is averaging $4,000 so $700 is worth it for us.

Is there something of lesser quality that would still meet your needs? May I ask where are you based? Is there somewhere that could get you at least on a mass transit line instead of having a long commute driving? I know in some places housing prices have gone crazy, but if a small studio renting was big enough for you, could you not buy something closer to that size?

Short of that, is there a way you could pay this mortgage down like really really fast and then possibly refinance it? Bringing your payments down would be huge.  Do you really need $105k in cash available for emergencies? Those would be major emergencies like getting laid off the same week that both of you need a new car - especially since you said your position would be very easy to find another one.

[ChpBstrd]

Yea I know VHCOL areas have crazy property values, but where do the regular people live? Do the people in working class jobs commute 3 hours from the hinterlands or something? Where do the people with <$100k jobs live?

The hedges, taxes, and HOA fees suggest we are talking about some of the more luxurious properties in the area, and maybe that includes the apartment, the closer-in alternative, and the house in question.

If I’m incorrect and these prices are for regular homes, I suggest fleeing back to the apartment before the bubble bursts. If I’m correct and we have expensive tastes, it may be a good time to weigh the trade offs between the features you buy with luxury and lifestyle design elements like killer commutes, the ability to have a kid or dial back on work if necessary, and the possibilities for financial independence.

[Dicey]

I don't have time right now,  ( I have a foreign forum visitor at my house, squee!) but I'll be back to read through the responses and formulate my own.

Initial thought: you have $1M+ in your pocket: relax! You're in an enviable position.

[JupiterGreen]

My SO and i have always lived in apartments as adults (raised in SFHs growing up).  We used to pay $1,850 for renting a 2 bedroom.  This year we bought a house and I haven't felt good ever since.  I keep wondering if this is a good financial move.  Stats below:

Income:  Combined $280,000 without bonus/overtime.  $365,000 with bonus/overtime.  His job is very secure and my profession has extremely low unemployment so I'd be fine finding a new job if need be but maybe at a slightly lower pay.  It is really hard to estimate our take-home because he contributes to a pension (this will pay half his final year salary including OT, potentially in 3.5 years) and I max out my 401k but variably.  Right now my take-home is $4,300 biweekly and his is probably between $3,200 and $4,100 biweekly depending on the OT, after health insurance, 401k etc.

Rent:  We kept our city apt since he works shifts and sometimes needs to crash there, and I work nearby too - but we got a roommate so our rent is now $700 a month there.

For our retirement plans, I have about $470,000 in pre-tax retirement savings and $35,000 in a Roth.   I also have $5,000 for emergencies.  He has about $270,000 in pre-tax 457 and $270,000 in a Roth 401k.  He also has the aforementioned pension plan as well as $100,000 for emergencies.

House:  Value at $999,750.  We put a fair amount down so our mortgage is $667,500.  Our HOI is $3,000 a year and taxes are $10,000 a year.  Even at this price there is stuff to fix up because we are in a high cost-of-living area.  So far we've been spending an additional $1,200 a month on utilities and house projects and I anticipate more since we need to replace the floors and plant some shrubs/trees. 

So our PITI is $4,498 a month and rent is $700 a month.  Interest rate is at 4.5%.

The dream of most people in our peer group is to own a home and do the whole thing.  We don't have kids yet (trying).  At this point, it's very nice to have all our stuff in one place.  We have large detached garages.  We've always kept some stuff in storage unit, some stuff at our parents', had a "boat" club for $3,000 a year to keep canoes, Sunfish and 18 foot small boat - this doesn't cost much in our new location.  We have a trailer and can just put in the water for free, so it's just a little maintenance here and there that he does on his own.  So that is great. 

But overall...having a house feels like too much room.  We shared a studio for 4 years.  We've shared this small 2 bedroom for years.  It's almost like...do we need all this?  Or are we just used to the apartment living?  I can't help but think that having a house with all the work that entails is not really that important.

I am a Xennial/Millennial cusp and so maybe our generation is just not the same as prior ones.  Will I get used to this?  We bought in June.

A house plus an apartment (and a boat?) seem like a lot, maybe you are just spreading your life over too much terrain and you need to streamline a bit. I do understand the rationale of the apartment in a HCOL, but you might do better just living closer. Homeownership isn't for everyone. Between the costs and the maintenance it really never ends. So there is the financial side of things, but there is also the "emotional" side. For some people having a house means they get to decide when or if they will move next. Choosing plantings and watching them mature is a joy (and not a chore to be done) and setting down roots feels good for many. Maybe home ownership just isn't your style (I don't think it is generational). Plenty of kids grow up in apartment or condos  (even RVs). You don't need a house to have kids. I'm curious why you bought a house, does your partner think it is important?

[Metalcat]

You're asking two wildly different questions.

Is owning a home worth it?
Is upsizing to a large house worth it?

For the first question, I actually have no love of owning despite owning multiple properties. I have very little interest in staying in any kind of "forever home," I don't garden, and beyond paint colour, I'm not terribly fussy about finishes.

However, I own two homes and an investment duplex because for where I want to live, owning makes the most sense financially and logistically. But only because I bought at the right time and locked in ridiculously low prices.

Now we get to the second question.

My houses are so economical largely because they're small and modest. My city home is a 1 bedroom apartment and my rural home is an old school little fishing village house.

Buying a home doesn't have to mean upsizing. In fact, my last rental apartment was more than double the size of my current owned apartment.

So will you get used to it?
I have no idea.

Will you get used to owning? Maybe. There are benefits and drawbacks to owning. I would happily return to renting in a second if it made sense for me, but it doesn't.

Will you get used to massive upsizing? Again, I don't know. There's no way I could live in a massive house. I HATE having too much space. I like everything to be close by, and I like my home to be spotless, so small is far better for me.

Houses are a metric fuck-ton of work, and the bigger they are, the more work they are. Now, I enjoy the DIY work around the house. I just spent an entire summer doing it. But the day to day maintenance stuff is tedious, and just eats into my free time. Not a fan.

That's why I like the condo apartment where most of that is taken care of for me, and why I will always avoid properties with a lot of land to maintain. I have hobbies, I don't have time for lawncare.

For you? I have no idea. It's such a personal thing.

So overall, are owning and upsizing both fundamentally superior things? Absolutely not.
Are they better for your particular circumstances? I have no idea
Will you get used to it? Maybe

[six-car-habit]

   I didn't see anywhere in the original post - where the new home buyer is complaining about their commute - but there seems to be a lot of advice about moving back into the city ?

  You are 'outdoorsy' people as i see it with the boat collection.  The fact you appreciate the hedges at the house shows you value some privacy, and intend to spend time in your yard --[ not just sit inside the house all day, most days ]. 

  I'm not sure why Chpbstd thinks you wouldn't use either the canoe, sailboat, or 18 footer with a 1 thru 4 year old ???   It seems like you would be the type of folks to teach your kid to swim while very young.  Maybe cull down the amount of boats, but to get rid of them all... that's nuts and not justified given your large income and savings.

 Although original poster did seem to allude to paying less to store stuff at the new location - i'm boggled by that - you have 2 Large garages, and an acre of land, why can't you keep all the things that float on the property ?

 You have only been in the house 2 months - when you look around at the potential projects, and upgrades you want, yes it seems overwhelming - because you have lived in an Apartment where the tenants' option to improve + customize your apartment / common area was probably close to non-existent, and doing handiwork on the apartment bldg or grounds probably didn't claim Any of your time.

 Live in the house for a year. If it doesn't agree with you, move back into your "pied a terre" in the city. 
 Things you likely won't have to worry about, when back living in your apartment ---

   Watering the flowers / shrubs / trees you've planted in the earth.
  Working on your car in the your own driveway - [not allowed usually in apartment parking lot]
  Walking thru your own yard in the morning and hearing the wildlife and wind while in your pajamas
    Walls that are Not shared with neighbors.
   ' Free' excess  dry , safe, storage that i'll guess is > than 700 sq ft , comprising your home's large garages.
 
 

[Daisyedwards800]

   I didn't see anywhere in the original post - where the new home buyer is complaining about their commute - but there seems to be a lot of advice about moving back into the city ?

  You are 'outdoorsy' people as i see it with the boat collection.  The fact you appreciate the hedges at the house shows you value some privacy, and intend to spend time in your yard --[ not just sit inside the house all day, most days ]. 

  I'm not sure why Chpbstd thinks you wouldn't use either the canoe, sailboat, or 18 footer with a 1 thru 4 year old ???   It seems like you would be the type of folks to teach your kid to swim while very young.  Maybe cull down the amount of boats, but to get rid of them all... that's nuts and not justified given your large income and savings.

 Although original poster did seem to allude to paying less to store stuff at the new location - i'm boggled by that - you have 2 Large garages, and an acre of land, why can't you keep all the things that float on the property ?

 You have only been in the house 2 months - when you look around at the potential projects, and upgrades you want, yes it seems overwhelming - because you have lived in an Apartment where the tenants' option to improve + customize your apartment / common area was probably close to non-existent, and doing handiwork on the apartment bldg or grounds probably didn't claim Any of your time.

 Live in the house for a year. If it doesn't agree with you, move back into your "pied a terre" in the city. 
 Things you likely won't have to worry about, when back living in your apartment ---

   Watering the flowers / shrubs / trees you've planted in the earth.
  Working on your car in the your own driveway - [not allowed usually in apartment parking lot]
  Walking thru your own yard in the morning and hearing the wildlife and wind while in your pajamas
    Walls that are Not shared with neighbors.
   ' Free' excess  dry , safe, storage that i'll guess is > than 700 sq ft , comprising your home's large garages.
 
 

Thank you!  Yes the commute is really no thing at all.  I drive about 1.5 hours on a Monday morning and then 1.5 hours on a Wednesday evening and the rest of the time I commute on public transit about 25 minutes while reading or listening to my iphone.  2-3 days I work at home.   It's more like...damn I have to pick out paint colors (which we never agree on), or I have to do this or that weeding.

I have to say after a month or two it's gotten a little less overwhelming and I enjoy having all my things in one place.  I have SO MUCH to do though - so much to paint, mattresses to purchase, light fixtures to buy etc.  It really wasn't like...our taste for the most part inside the house.  But the property is so private and I'm looking at my trees outside.  I am just tired from working and I wish I was retired already.

[NaN]

This is a great question @Daisyedwards800 .

My suggestion: sit down with the SO, and try to make a full list on what you want to do with the house. Then make guesses on how much time and money it might take (1/2 day, full day, weekend, month of weekends, etc.), even googling or asking a builder in town. Once you have a good guess, then double that time. I'm serious, everything will take longer than you expect. And cost more. With that, then plan out a schedule, with the SO. This is where the fun compromise begins. I would imagine a not too insignificant chunk will be many weekends wearing both of yourselves out from the house, rather than taking a boat out to destress from a long few weeks at work. Don't let the house consume you. Set boundaries. Of course, don't ignore critical items, but don't let the non-critical items (yes, anything related to taste is a non-critical item) consume all your time. Treat it like a marathon - it is not a sprint to get it how you want in the first year. There is no trophy at the end ;).

And enjoy the home and all the best with trying to also start a family. Having all that sorted out is a huge plus.

[ChpBstrd]

I'm not sure why Chpbstd thinks you wouldn't use either the canoe, sailboat, or 18 footer with a 1 thru 4 year old ???   It seems like you would be the type of folks to teach your kid to swim while very young. 

That's a life experience item. We sold our ski boat when 3 months pregnant. For the next 4 years, although we missed going out on the lakes, snorkeling, camping on islands, and all that, we absolutely would not have had the bandwidth to actually get out and do those things. It was hard enough to get everything packed in the car and to go to friends' houses while managing the meltdowns, much less do lake excursions.

[kite]

If you like it, the answer is YES!

Renting versus purchasing is purely a financial calculation and there is a mathematically correct answer that depends on rent versus ownership costs + how long you are staying. Rarely is it rent X versus buy X. It’s almost always Rent X versus buy Y, and still things like monthly costs, taxes, HOA, commute, upgrades & incidentals all factor into the equation, along with how long you are staying put.

There is no rush to furnish or decorate.
Enjoy it as much as you can.

[Laura33]

Why did you move in the first place?  Sounds like a big lifestyle change; what drove it?  Desire for outdoor space?  Wanting more space to have kids?  The vision of a house with a yard?

What is the source of the dissatisfaction?  Is it the financial outlay?  You've certainly taken on a huge amount of debt, and watching your investment balance dip for that downpayment couldn't have felt good.  Is it the aesthetics -- do you like what the home could be and are willing to pay the price to live there, but you hate how it looks now and dread the time and money and effort to get it looking nicer? 

Happiness is when reality exceeds expectations; unhappiness is when expectations exceed reality.*  What expectation did you have that the house has not met?  What additional burden did you not anticipate?  Are there things that you can do to make these things better, short of selling the house? 

IME, people tend to be the most unhappy when they have a particular mental vision of something, and let that vision blind them to the realities.  IOW, if you want a house because that represents "success" in your mind, or because That's What People Do When They Have Kids, then any house you buy is likely to be disappointing, because you don't actually want a house, you want a feeling, and feelings are always fleeting (and they tend to flee even faster when the realities of home ownership set in).  So maybe you thought you wouldn't mind the cost of the mortgage, but now that the initial excitement has worn off, you're finding it bothers you more than you thought.  Or maybe your SO wanted the house more than you did -- or vice-versa -- and now one of you is feeling grumbly about the reality, and that's adding friction. Or maybe you thought a fixer-upper was fine, but now you're losing patience with getting the house the way you want it, but don't want to/can't afford to fix everything all at once.

The reality is that a house is a consumption item, not an investment; if you're buying a house to live in, you're doing so to improve your daily lifestyle, not because you hope that in 10 years the property market will be even crazier and you'll make a mint.**  And the bigger the price tag, the bigger the emotional payoff needs to be to make it seem worth it.  And since you're the one who decided to make that large purchase, only you can decide in the end if that purchase is worth it.  So what part of that payoff aren't you getting -- what is it that, in retrospect, you undervalued, or failed to consider?  Once you've figured that out, you can brainstorm ways to try to make that better, even if it's not perfect in the end.  Because nothing is; everything has a tradeoff.


*I like to write this as a mathematical formula -- Happiness = reality - expectations [greater than] 0 -- but I can't figure out how to do a "greater than" sign here.

**If you are buying a home because you think home prices will continue to skyrocket, that's speculation, not investment, and it's the wrong reason to buy a primary residence.  If you want to invest in real estate, buy rental properties that will put money in your pocket today, not something that might or might not pay off in a decade or two.