Ever since my husband and I became debt free our friends and family have been asking us when we are going to buy a house. It is a fair question as most people our age are getting married, buying houses and making babies. The truthful answer to this is… I am in no rush.
After grinding away for 2.5 years to pay off $120,000 of debt, the last thing on my mind right now is to get into more debt. I know the argument that mortgage debt is good debt, but that is not the point. Yes, I agree good debt (if there is such a thing) provides you with a better interest rate and increases long term assets (sometimes) but I am not ready for that type of long term commitment yet. Owning a home is a huge responsibility and I want to figure out my life before I sign on the dotted line.
I know this feeling will probably change overtime and my husband and I will buy a house. We want to at some point, but we don’t have an aching desire to right now. When the time is right and the house price makes sense and we have sufficient savings on top of making our mortgage + other expenses each month, then we will. It might take 5, 10, 15 years, or it may never happen, and that’s ok. I don’t mind as long as I have a roof over my head and the one’s I love around me.
So here are a few reasons why I am not in a rush for home ownership:
- I am young and like the idea of picking up and moving cities, provinces, countries if needed to expand my skills and increase my income potential. Renting provides me with minimal costs to do this.
- I see residential home ownership as an expense item, not an asset. Similar to rent payments, I will need to come up with the money in order to continue living there. This also removes the added angst of timing a house purchase and hoping you buy low and will sell high. My home is a place I lay my head, not an investment. If at the time we want to sell the house has gone up in value, I see that as an added bonus. Nothing else. However, purchasing a rental property is an investment with the down payment & other expenses being the cost and rent payments from tenants the cash flow/income. Since we are also not in the market for a rental property, this does not appeal to us either.
- House prices are ridiculously expensive in major cities in Canada. I have lived in major cities all my life and enjoy doing so (Ottawa, Toronto, Calgary etc.). This may change as I get older but for now, house prices in major cities in Canada are ridiculous.
- I want to “beef” up my savings in both short terms funds like: emergency fund, baby fund (when I have them) and education fund (I love learning) and long term funds like our retirement saving and RESP for our kids.
- I invest in companies that invest in real estate. Currently, I have some shares purchased in CREIT (Canadian Real Estate Investment Trust) & enrolled in their DRIPS. CREIT purchases and leases out retail, industrial and office space in Canada and the United States. This provides me with some exposure to the real estate market while minimizing my risk.
With that being said, I would never rule out home ownership, but it needs to make financial sense for us. I think owning a home is great and I would like to someday, but I want it to be blessing. I have heard too many horror stories of people that are over-leveraged.
Tags: a lot of debt, Budgeting, Debt, home ownership, homeownership an asset, homeownership an expense, Investing, millennials renting, moving, real estate, reasons to rent than own, rent, rent vs buying, renting, rising house prices, Savings, student debt, student loan, why rent