Being House Poor

I’ll never forget the feeling of owning my first piece of real estate or the excitement of having all new appliances and that new condo smell for the first time. But that excitement waned after a year or so when all of a sudden, I realized ... I was house poor.

Going from renting to being an owner was a big step to take. All of a sudden, I had a mortgage payment, property taxes and condo fees.

At the time, I was paying rent of $585 (this was 1997) and my mortgage payment was going to be $724. I figured it wouldn’t be a huge adjustment to make, even when adding taxes of $50 and strata fees of $114.

I figured I would just take the extra housing expense out of my entertainment budget, and everything would be ok, - I mean, I wasted that much money each month in going out and partying with friends, so would I miss the extra spending money?

I figured I would just stay in more, because after all, wouldn’t I enjoy sitting at home more, now that I had a new place …?

Well, after a year or so, I started to notice the difference in my lifestyle. My condo fees and taxes started to go up plus we had budget shortfalls (our fees didn’t completely cover our expenses) and each owner had to make up the difference.

The new condo feeling also wore off and I no longer felt like staying home all the time.

The joys of ownership!

Initially, I thought I wouldn’t miss two to three hundred dollars a month in spending money, because wasn’t I making a sound investment?

Well – yes and no. My social life suffered and I found I couldn’t travel as much. As a matter of fact, I didn’t travel for 4 or 5 years. I also didn’t eat out as much or socialize as much as I wanted to

To make matters worse, my building was assessed for water damage – I had purchased a leaky condo! My portion came to $21,000 – some investment, eh?

I also had other small debts at the time and slowly, these started to creep up.

After seven years of ownership, I decided to sell. Thankfully, the market started to come back and I was able to sell for a small profit.

I paid of all my debts and then started travelling … and living!

I’m all about making sacrifices and exercising discipline in sticking to financial goals, but I have to wonder if it’s worth sacrificing the here and now, and time with family and friends?

Is it worth it, if a financial obligation is preventing you from living the life you want to live?

Now, in retrospect, I’d have to say no.

Would I buy again?

Well, it was certainly a great experience owing my own place and I learned a lot, but I would change a few things:

I would make sure my monthly payments – including taxes and condo fees – were similar to rent. I’d also make sure I had all my debts paid off.

I’ll own again at some point, but for now, I will happily rent – with a roommate – and keep my housing expenses as low as I can.

Your financial future is important, for sure, but what’s the point of turning 65, and then asking yourself, what if I had done …?