Moving out of my sister's basement: a life-changing choice

Moving out of my sister's basement: a life-changing choice
Dorothy was right--"there's no place like home."

ChicagoNow's June Blogapalooza blogging challenge: "Write about a decision you made that changed the course of your life for better or worse."

 

Oh sure, that's some light cocktail party banter. No, really, that's a huge question...

In 2001 I was four years out of college but still living in my sister's basement.  I did not start out with an idea of being a real estate mogul.  I didn't even have an inkling that I would end up being a landlord at all.  I just wanted to have a place of my own.

I had never really considered getting an apartment because times were different back then.  There was more of a general sense of optimism that a person's financial life would gradually get better with time and hard work.  Especially a college graduate.  Owning a home was still inarguably a part of the American Dream (not like today when the Great Recession and years of anemically slow economic growth have created an undercurrent of aversion to home buying).  Plus I had grown up in  a house where I watched my very resourceful mom and dad make all types of DIY repairs to keep a house going.

Just like millions of other families and individuals did each year,  I went to a mortgage specialist to get pre-approved to buy a single family house for me to live in.  Because I was single and I didn't make very much money, the amount of house the bank said I could afford was not impressive.  As a first-time homebuyer I had the wonderful benefit of only being required to provide a 3% down payment toward the cost of whatever home I found.  The flip side of that was since the bank would be on the hook for the other 97% they had all the say in just how much I could spend on a home.  Makes sense.  Banks literally "pay the cost to be the boss."

So I took my little pre-approval letter to my real estate agent and we started looking for a house to fit my budget.  When I matched the amount the bank said I could spend with the available prospects my choices got really dismal really fast.  This amount either put me in some pretty run-down structures or in some areas where I would not AT ALL feel safe to live as a single woman.

After months of searching my kindly real estate agent pulled me aside and told me he had an idea.  He suggested I might consider making my new home an owner-occupied rental property.  I could buy a 2-flat building, live in one unit and rent out the other.  In other words I should become a landlord.

This was something that I had never really considered for myself.  It seemed like such a big decision and a huge responsibility, but there were some real advantages.   One benefit to me was that I could go back to the bank to get re-approved.  This time the bank would not only consider my income from my job but would include the expected rent I would collect from the additional unit.  As a result the new amount I qualified for was almost twice the original amount when I was was only approved to buy a single family home. 

It's true that a 2-flat or multi-unit building would cost more than a house but on average they don't cost TWICE as much as a house.  So switching to a search for a small apartment building was giving me much more bang for my buck.  What this meant for my home-buying reality was that the 2-flats we started looking at were in much better areas and in much better condition than the single family homes I viewed at the start of my search.

And voy-lah!  A newbie landlord was born.  Fifteen uninterupted years later I still own rental property.  No matter what people tell you, no matter how many books you read, no matter how many workshops you attend this is still a learn-as-you-go process.  I have made a ton of mistakes and had some heartaches along the way.  But I have also learned more than I could have ever imagined.

For all the ups and downs owning real estate has added to the quality of my life and I have no plans to give it up.  Even on the worst day, my thought is not to turn back but "how can I make this better?"  And on the best days--and there have been so many--I thank the Lord for helping me make that big decision all those years ago.

It's 10pm and my time is up.  I have to stop writing.

 

Be the first to read new Urban Landlady blog posts. Type your email address in the box and click the "create subscription" button. My list is completely spam free, and you can opt out at any time.

Leave a comment