Author Topic: Buying a home for quality of life. Worth it?  (Read 1561 times)

mrcrabber

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Buying a home for quality of life. Worth it?
« on: August 18, 2019, 07:39:28 PM »
This is contrarian to many typical MMM decisions I've made, but I'm considering moving from my 1bedroom apartment that I rent for $1200 to a single family detached home, that will probably cost $500-600k (Portland, OR market).

This is *not* a good decision in regards to fastest path to financial independence. Rather, it's targeting & following the desire to create and reside in a home I really love, I can improve, and enjoy creating a life and a ritual around a home I really love.

I'm curious the thoughts/opinions of other FIREers with regards to home ownership. Have folks made the switch to living in a home they own and how does it affect their quality of life? Worth it? Best highlights?

I like Ramit Sethi's approach of saving in most areas, and spending in the ones that matter most to us. So this would follow that plan.

Lmoot

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Re: Buying a home for quality of life. Worth it?
« Reply #1 on: August 19, 2019, 05:06:31 AM »
This is contrarian to many typical MMM decisions I've made, but I'm considering moving from my 1bedroom apartment that I rent for $1200 to a single family detached home, that will probably cost $500-600k (Portland, OR market).

This is *not* a good decision in regards to fastest path to financial independence. Rather, it's targeting & following the desire to create and reside in a home I really love, I can improve, and enjoy creating a life and a ritual around a home I really love.

I'm curious the thoughts/opinions of other FIREers with regards to home ownership. Have folks made the switch to living in a home they own and how does it affect their quality of life? Worth it? Best highlights?

I like Ramit Sethi's approach of saving in most areas, and spending in the ones that matter most to us. So this would follow that plan.

That is quite a jump. Is that a cost for a fixer-upper, or must you have a move-in ready? Everybody is different, but I got a lot of quality of life and education from buying a fixerupper. Now my house has new everything and over $100k equity and my mortgage is still the same $350 from when I bought it 10 years ago, broke and in my 20s.

Ideally my next house would be scraped clean--perhaps an investor that got in over her head, but not before knocking down all the drywall and reframing. After dealing with a house that needed plumbing ($12,000), electrical ($9,000) roof ($8,000), AC ($5,000). It's amazing how affordable and easy it can be to make those improvements piece by piece, using 0% promotional credit cards since buying a house is expensive and you probably won't have or want to use cash early on, if you can avoid it; I'd rather save on the purchase, and spend on investing in the asset. Each item I listed above took less than 3 days each, to complete. The bathroom took about 1-2 weeks. For a lil bit of suckiness, I have years ahead of cheap living costs.
« Last Edit: August 19, 2019, 05:15:41 AM by Lmoot »

Malkynn

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Re: Buying a home for quality of life. Worth it?
« Reply #2 on: August 19, 2019, 06:00:08 AM »
On the flip side, I've owned 2 homes (still own both) and I would NEVER choose to own unless it was financially beneficial for me to do so. I have absolutely zero love of owning except for the money it saves me.

What you are asking is a very personal question, and only you can answer if it's worthwhile.
Pete and Ramit are actually saying the same thing, they're both just talking about spending in meaningful ways that bring you the most happiness. It's not like Pete lives in a small rented apartment. They have different personal values when it comes to spending...like everyone else. The challenge for each of us is to know ourselves and our values well enough to decide accordingly.

That said, when analyzing if a spending choice is worth it, the "would it make me happy?" part of the equation really isn't the most important part, it's looking at the ways in which the financial demands of the decision *could* make you miserable, and all of the opportunities you would be giving up to do this.

Early retirement is just one thing you can buy with savings, there are infinite other life possibilities that you would be trading off in order to do this. Look at those, look for something you might actually ending up wanting more. If you don't find anything, including more freedom, that you could possibly want more, then really start looking at the level of happiness it will provide and decide from there.

I don't know what your income is or if you have a partner doing this with you, but my first concern would be the stress of possible job loss.


Jon Bon

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Re: Buying a home for quality of life. Worth it?
« Reply #3 on: August 19, 2019, 06:42:14 AM »
Can you walk places? Is it close to work? Is it bike friendly? Are you close to places you like to spend your time?

I live in an expensive house very close to the city center. I have a great schools, sidewalks and an awesome community. I pay probably double for what a nice suburban house would cost me.  To me this is 100% worth it. So it really depends on your values. The appreciation I have seen is incredible, because people want they type of neighborhood I have. However I have zero plans to sell. WHERE we live has a ton to do with my families happiness.

*As others have noted, 1200 a month to a 600k house is a massive increase in housing costs. If you can swing that, I say go for it assuming it does not hurt fire too bad.


mrcrabber

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Re: Buying a home for quality of life. Worth it?
« Reply #4 on: August 19, 2019, 11:24:40 PM »
Yeah, working in tech I think I actually can afford it ($200k base salary plus equity/bonuses).

Yes, the cost would mainly be because it's near everything I like to do and bike able.

Sure is a big jump up in living costs, but moving up piecemeal into nicer rental/rented house doesn't fully appeal to me. Especially for the PITA of finding place/moving/etc.

I'm also thinking if I don't like it a few years in I could rent or sell and come out not in horrible financial situation (hopefully).

Love the value points and the consideration questions. Hard to know for sure but exactly the things I'm considering.

Car Jack

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Re: Buying a home for quality of life. Worth it?
« Reply #5 on: August 20, 2019, 07:45:44 AM »
It's a matter of living life and making tradeoffs.  Getting to a FIRE date as fast as possible isn't the goal of everyone....even here.  I am far from the poster child of a FIRE charging millennial.  Heck...my 2 kids are millennials.  Cover your eyes.....I drive a Jeep Wrangler Unlimited on 34" tires and offroad it on the weekends (Pete just fainted).  :lol:

Malkynn

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Re: Buying a home for quality of life. Worth it?
« Reply #6 on: August 20, 2019, 08:15:22 AM »
Yeah, working in tech I think I actually can afford it ($200k base salary plus equity/bonuses).

Yes, the cost would mainly be because it's near everything I like to do and bike able.

Sure is a big jump up in living costs, but moving up piecemeal into nicer rental/rented house doesn't fully appeal to me. Especially for the PITA of finding place/moving/etc.

I'm also thinking if I don't like it a few years in I could rent or sell and come out not in horrible financial situation (hopefully).

Love the value points and the consideration questions. Hard to know for sure but exactly the things I'm considering.

Again, as long as the trade off of the drastic drop in security and flexibility is worth it to you, then only you can decide if it's the right thing to do. At that level of payment, you have no choice but to stay very well employed.

The question isn't so much whether or not the house is a good idea, the question is whether or not the career is.


mrcrabber

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Re: Buying a home for quality of life. Worth it?
« Reply #7 on: August 20, 2019, 08:20:11 AM »

That said, when analyzing if a spending choice is worth it, the "would it make me happy?" part of the equation really isn't the most important part, it's looking at the ways in which the financial demands of the decision *could* make you miserable, and all of the opportunities you would be giving up to do this.

Interesting way to look at it. Are there particular questions or ways other folks have explored this? Journaling prompts? Books?

Malkynn

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Re: Buying a home for quality of life. Worth it?
« Reply #8 on: August 20, 2019, 08:27:55 AM »

That said, when analyzing if a spending choice is worth it, the "would it make me happy?" part of the equation really isn't the most important part, it's looking at the ways in which the financial demands of the decision *could* make you miserable, and all of the opportunities you would be giving up to do this.

Interesting way to look at it. Are there particular questions or ways other folks have explored this? Journaling prompts? Books?

Probably...?

That's not really how I roll though, so I can't point you to any other than the MMM blog itself, which really is an exquisite essay on happiness if you ignore the whole working towards FIRE aspect of it.

I personally ignore the whole FIRE thing, I have no interest in it, but in reading MMM's blog, I was really struck by how envious I was of his post-FIRE life, and quickly noted that he made more than enough money living his best life, and actually could have skipped the whole decade of work to reach FIRE in the first place.

As someone who makes a lot of money, and who has no intention to retire, because I contemplate deeply the consequences of my spending on my choices, I am extremely cautious about what I am willing to spend on, especially what I'm willing to commit to spending on long term.

Remember income isn't wealth, wealth is wealth, and you don't have it yet. I'm not saying that buying a home is a bad investment for you personally, I'm saying that you need to look at it for what it is, a long term commitment to continue working at a pace that can support the kind of cash-flow you need in order to fulfill that commitment.


waltworks

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Re: Buying a home for quality of life. Worth it?
« Reply #9 on: August 20, 2019, 08:31:41 AM »
If the purchase will making you happier than the financial hit will make you unhappy, then you should buy the house.

I mean, I've basically thrown FIRE out the window to live where I want and where I think my kids can have an awesome childhood. But I like my job and I don't mind working another 5 years for that. If you were a miserable cubicle slave, different story.

-W

Jon Bon

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Re: Buying a home for quality of life. Worth it?
« Reply #10 on: August 20, 2019, 08:54:18 AM »


I mean, I've basically thrown FIRE out the window to live where I want and where I think my kids can have an awesome childhood.

-W

THIS

Being FIRE is complete bullshit if it does not make you happy!

We are semi-fire right now. I could sell all my properties and move to be the richest man in the middle of nowhere, but that is not for me.


macmoneysaver

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Re: Buying a home for quality of life. Worth it?
« Reply #11 on: August 26, 2019, 06:57:31 PM »
Quote

That said, when analyzing if a spending choice is worth it, the "would it make me happy?" part of the equation really isn't the most important part, it's looking at the ways in which the financial demands of the decision *could* make you miserable, and all of the opportunities you would be giving up to do this.

Interesting way to look at it. Are there particular questions or ways other folks have explored this? Journaling prompts? Books?

Let's do a thought experiment.  Insert your own numbers, but try to follow the logic:
Current: Rent 1200 + utilities 200 + 50 renters insurance + $200 commute (20 mi x $0.50/mi x 20 days/mo) = $1650 = $19,800

New home: PITI $3500 + utilities 400 + commute $0 (bikeability) = 3900 = $46,800/yr

If these numbers are anywhere close to correct, the difference will be $27,000/yr. 

Assuming your overall (not marginal) tax rate is about 20%, you would need to earn $33,750 to pay for the difference.  That is about 17% of your salary.

Is that too steep of a price to pay for the added convenience and happiness?


Wrenchturner

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Re: Buying a home for quality of life. Worth it?
« Reply #12 on: August 26, 2019, 08:28:16 PM »
All I know is this--make sure you're not dreaming this up like a panacea that will cure your problems or something.  I'm not sure one's living arrangement is really as critical as it seems.  Unless you have kids.

MonkeyJenga

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Re: Buying a home for quality of life. Worth it?
« Reply #13 on: August 26, 2019, 09:58:48 PM »
What specifically are you unhappy with in your current rental?

Lmoot

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Re: Buying a home for quality of life. Worth it?
« Reply #14 on: August 27, 2019, 01:36:06 AM »
All I know is this--make sure you're not dreaming this up like a panacea that will cure your problems or something.  I'm not sure one's living arrangement is really as critical as it seems.  Unless you have kids.

Just curious, why only if you have kids? Living situation is a pretty major part of most peopleís lives, especially if you are a homebody and/or work from home (both me). Maybe some people who arenít home often, see a domicile as a place to crash, but where I live, from the amenities, location, safety, stability, people, and surrounding aesthetics of the neighborhood, as a single person with no kids is very important to me.

Wrenchturner

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Re: Buying a home for quality of life. Worth it?
« Reply #15 on: August 27, 2019, 06:43:12 AM »
All I know is this--make sure you're not dreaming this up like a panacea that will cure your problems or something.  I'm not sure one's living arrangement is really as critical as it seems.  Unless you have kids.

Just curious, why only if you have kids? Living situation is a pretty major part of most peopleís lives, especially if you are a homebody and/or work from home (both me). Maybe some people who arenít home often, see a domicile as a place to crash, but where I live, from the amenities, location, safety, stability, people, and surrounding aesthetics of the neighborhood, as a single person with no kids is very important to me.

I was painting with a wide brush, sorry.  I agree about the amenities and whatnot, but whether you share walls--to me--is not the end of the world, and it's expensive to remove those neighbors, so to speak(living in a detached house).  But everyone has their own priorities.  I'm sure once I hit high income I'll have a similar consideration.

Lmoot

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Re: Buying a home for quality of life. Worth it?
« Reply #16 on: August 27, 2019, 06:58:07 AM »
All I know is this--make sure you're not dreaming this up like a panacea that will cure your problems or something.  I'm not sure one's living arrangement is really as critical as it seems.  Unless you have kids.

Just curious, why only if you have kids? Living situation is a pretty major part of most peopleís lives, especially if you are a homebody and/or work from home (both me). Maybe some people who arenít home often, see a domicile as a place to crash, but where I live, from the amenities, location, safety, stability, people, and surrounding aesthetics of the neighborhood, as a single person with no kids is very important to me.

I was painting with a wide brush, sorry.  I agree about the amenities and whatnot, but whether you share walls--to me--is not the end of the world, and it's expensive to remove those neighbors, so to speak(living in a detached house).  But everyone has their own priorities.  I'm sure once I hit high income I'll have a similar consideration.

Fair enough. I guess I could say the same about cars. I couldn't care less what my car looks like (as is evident by what my car looks like). But I feel downright depressed if I don't feel comfortable in my home of all places. Doesn't mean I need my dream house or nothing will do. But at 35 my days of getting by with the bare minimum are over. I don't earn a high income, but I'm starting to get to the point where I am willing to give up optimal savings, for a little more balance in my life.

Malkynn

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Re: Buying a home for quality of life. Worth it?
« Reply #17 on: August 27, 2019, 07:02:25 AM »
All I know is this--make sure you're not dreaming this up like a panacea that will cure your problems or something.  I'm not sure one's living arrangement is really as critical as it seems.  Unless you have kids.

Just curious, why only if you have kids? Living situation is a pretty major part of most peopleís lives, especially if you are a homebody and/or work from home (both me). Maybe some people who arenít home often, see a domicile as a place to crash, but where I live, from the amenities, location, safety, stability, people, and surrounding aesthetics of the neighborhood, as a single person with no kids is very important to me.

I was painting with a wide brush, sorry.  I agree about the amenities and whatnot, but whether you share walls--to me--is not the end of the world, and it's expensive to remove those neighbors, so to speak(living in a detached house).  But everyone has their own priorities.  I'm sure once I hit high income I'll have a similar consideration.

Wait, why would having kids require living in a detached home???

True though, everyone does have their own priorities, we're high income and just moved back into a 1 bedroom apartment. Lol. It's what we really wanted. It's also incidentally quieter and I don't have to deal with neighbours as much. Funny, no?

Kids, no kids, low income, high income, everyone has their own needs and priorities.

Wrenchturner

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Re: Buying a home for quality of life. Worth it?
« Reply #18 on: August 27, 2019, 07:09:30 AM »
All I know is this--make sure you're not dreaming this up like a panacea that will cure your problems or something.  I'm not sure one's living arrangement is really as critical as it seems.  Unless you have kids.

Just curious, why only if you have kids? Living situation is a pretty major part of most peopleís lives, especially if you are a homebody and/or work from home (both me). Maybe some people who arenít home often, see a domicile as a place to crash, but where I live, from the amenities, location, safety, stability, people, and surrounding aesthetics of the neighborhood, as a single person with no kids is very important to me.

I was painting with a wide brush, sorry.  I agree about the amenities and whatnot, but whether you share walls--to me--is not the end of the world, and it's expensive to remove those neighbors, so to speak(living in a detached house).  But everyone has their own priorities.  I'm sure once I hit high income I'll have a similar consideration.

Wait, why would having kids require living in a detached home???

True though, everyone does have their own priorities, we're high income and just moved back into a 1 bedroom apartment. Lol. It's what we really wanted. It's also incidentally quieter and I don't have to deal with neighbours as much. Funny, no?

Kids, no kids, low income, high income, everyone has their own needs and priorities.

It's also true that as a renter you can choose your neighbors more easily, even if you don't share walls with them.

I think partly I said this because I'm really happy with my current rental.  It's a legal basement suite in a house that was designed as such.  It has a great layout and high ceilings, all the appliances, a great shower, and a proper vented range(probably my most valued asset!).  I have my own thermostat, humidity control, good ventilation, and it stays wonderfully cool in the summer.  It's the best home I've had despite being a 6 month-term furnished rental.

BlueHouse

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Re: Buying a home for quality of life. Worth it?
« Reply #19 on: August 27, 2019, 10:23:11 AM »
I could quit working now and never work another day in my life if I were willing to give up my house and move somewhere 20+ miles away. 
I'm not willing.  I love it and I get a lot of pleasure from it. 

I could quit working now and probably never have to work another day in my life if I gave up my house and lived in a smaller place a few blocks away.  Still no.  Even if I could keep all the great things about my lifestyle, walkable location, fantastic cultural events, I STILL would keep the house.  There are just things I enjoy about it.  I even enjoy scrubbing the front stoop and scrubbing the deck.  I LIKE doing those things in THIS house. 

Yep, it's costing me a lot more than it has to, but so what? 

mrcrabber

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Re: Buying a home for quality of life. Worth it?
« Reply #20 on: August 27, 2019, 12:15:30 PM »
What specifically are you unhappy with in your current rental?

  • Lack of ability to make home improvements
  • Lack of vented range
  • Downstairs neighbor who complains about my noise (which I think is reasonable)
  • Don't feel comfortable having potlucks/parties/6am solo morning dance parties

But overall the biggest thing that this has brought up for me is (get ready for it...) where do I live out of scarcity and fear or where do I live out of abundance and joy.

Am I pursuing FI because I'm afraid of losing a job and being on the street and being broke, or am I excited about more freedom and quality of life and time to spend with loved ones.

There are also two sides of this, but really diving into this more and learning about myself and fears (therapy, meditation, introspection, journaling, etc all have helped a ton) and my joys and my wants have revealed lots of things that I didn't really pursue in the first 5 years of my career and strict FIRE frugality.

I love lots of the ideas of FIRE, but if I'm spending 30 minutes trying to save $10 on which site to buy something from, I'm wasting my time. How can I value my time, myself, and really use my resources to create a life of meaning and purpose.

Taking a leap to purchase a house feels like a scary leap from my previous mindset and beliefs, but I'm also excited to really invest and live the life I want, and with my salary I feel this is still within my means and reasonable and I can still save a good amount and move towards FI. Once I'm FI, will I want to quit my job, not right now.

I want to take a bold leap and pursue a life I'm excited about and the house buying is more the commitment to that principle and to myself, the choice of spending more money to increase my quality of life and valuing myself and where I live. And to not wait until FIRE to live that life that excites me and brings me most meaning.

Malkynn

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Re: Buying a home for quality of life. Worth it?
« Reply #21 on: August 27, 2019, 12:27:04 PM »
What specifically are you unhappy with in your current rental?

  • Lack of ability to make home improvements
  • Lack of vented range
  • Downstairs neighbor who complains about my noise (which I think is reasonable)
  • Don't feel comfortable having potlucks/parties/6am solo morning dance parties

But overall the biggest thing that this has brought up for me is (get ready for it...) where do I live out of scarcity and fear or where do I live out of abundance and joy.

Am I pursuing FI because I'm afraid of losing a job and being on the street and being broke, or am I excited about more freedom and quality of life and time to spend with loved ones.

There are also two sides of this, but really diving into this more and learning about myself and fears (therapy, meditation, introspection, journaling, etc all have helped a ton) and my joys and my wants have revealed lots of things that I didn't really pursue in the first 5 years of my career and strict FIRE frugality.

I love lots of the ideas of FIRE, but if I'm spending 30 minutes trying to save $10 on which site to buy something from, I'm wasting my time. How can I value my time, myself, and really use my resources to create a life of meaning and purpose.

Taking a leap to purchase a house feels like a scary leap from my previous mindset and beliefs, but I'm also excited to really invest and live the life I want, and with my salary I feel this is still within my means and reasonable and I can still save a good amount and move towards FI. Once I'm FI, will I want to quit my job, not right now.

I want to take a bold leap and pursue a life I'm excited about and the house buying is more the commitment to that principle and to myself, the choice of spending more money to increase my quality of life and valuing myself and where I live. And to not wait until FIRE to live that life that excites me and brings me most meaning.

I 100% understand this sentiment. I personally don't care about FI very much, and definitely don't care about retiring.

That said, spending in order to be happy still needs to be done in a careful and thoughtful way where you deeply scrutinize your options.

Again, there's rarely a question about the benefit of spending on something you want, the question is what doors will that spending close? And are you okay with those doors being closed?

I personally have no opinion as to whether or not you should buy a house, so don't take this as any kind of discouragement.  However, I do think you should look at the enormous trade offs that such a huge financial move requires and see if you are really okay with them and not just looking at this as a purely positive move, because it isn't.

Buying a house is never just a purely positive option, there are a lot of downsides. This isn't like saying "fuck it, I'm going to start spending more on travel while I'm still young!", I probably wouldn't even bother replying in a thread about that, other than to say "cool, have fun, post pics when you get back".

Make sure you aren't trading away too much freedom and options before pulling the trigger on such a big gun.

mrcrabber

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Re: Buying a home for quality of life. Worth it?
« Reply #22 on: August 27, 2019, 01:05:03 PM »
Yeah, definitely great points to consider and make sure the cannon is well aimed before firing.