A tale of two homes: How the Vines accidentally invest in real estate

Mr. Vine and I have a habit of collecting homes. Usually they are relatively small and inexpensive. Nonetheless, we often find ourselves with more homes than one couple needs. This began when I attended grad school. My school was a few hours’ drive from the first home we’d ever purchased. At first, our plan was that I would commute during the years of school with the intent to settle back into that home. In my second year, we decided the distance was too difficult and Mr. Vine made the move to my grad school city. Ultimately, we rented out that first home for a couple of years while I finished school. Despite the best laid plans, our tenants needed an extra couple of months to move out, so we rented a temporary space after I finished school. During those grad school years, we fell in love with urban living and our temporary rental was situated near the downtown of the city where we’d both found jobs.

We fell in love with the building and bought a condo of our own in it, thinking we’d use our original home as a weekend cottage because it is near the beach. I talk about why we decided to sell it in more detail here. Going down to one home felt like it super charged our finances. It felt like the biggest and most important step towards financial independence. We added a six figure payout to our investment account and cut our monthly expenses significantly.

After selling our first home, I told anyone who would listen that I never wanted to own another piece of real estate as long as I lived. What’s that they say about never say never? Early in 2020, I received an amazing career opportunity near my grad school city. This came with a sizable raise, but more importantly, seemed like a good fit in terms of work substance and company culture. The only downside was the move to a location Mr. Vine does not prefer. His preference aside, we will be closer to family (most of mine and some of his) and a large pre-existing network for friends for both of us. He’s always been supportive of my career, though, and he was willing to once again make a move for me.

We began exploring housing options in the new city with the expectation that we would rent an apartment. We view this move as somewhat temporary; we expect to move back to our current city or somewhere closer to the beach upon achieving financial, and thus location,  independence. That point is approximately four years away. 

Although we fight lifestyle inflation, there are some comforts in our housing that we strongly prefer. We like a garage, we like nice appliances, we prefer non-carpet floors, we value outdoor space, and in-unit laundry improves quality of life. We can’t forget that cats must be allowed, too. The pandemic and my working from home made us rethink a one bedroom place, with a new preference for a second bedroom that I could use as a home office. Location is of course critical–both a neighborhood where we feel at home and reasonable commutes to work. Unfortunately, Mr. Vine and I have offices on opposite ends of a large metropolitan area, making two cars necessary for us for the first time in nearly a decade. We prioritized giving Mr. Vine the shorter commute as remote work is not an option for him. This worked out well as the neighborhoods near my office tend to be more recently developed and expensive. 

The search for an apartment in a desirable location with most of our desired amenities yielded just a couple of options, at very high rents. The monthly rent would be more than double our current housing expense. I decided to run this calculator from SmartAsset to figure out whether it might make sense to buy. 

It turned out that we would come out ahead after less than two years if we purchased a home rather than rented. We quickly pivoted our search and over the summer started looking for a home to buy in a crazy seller’s market. We relied on the math, because emotionally the prospect of buying a house felt foolish. Mr. Vine is always the decisive one who finds the home we’ll purchase. I am invariably more picky and reluctant. This time around the house he loved was full of hidden potential. The seller is an artist and the house reflects her quirky aesthetic. More on the house itself to come in a future article, but for now the takeaway is that I had some major reservations. 

The house was priced well below our budget, which allowed for renovations to align it with our taste and comfort. The neighborhood is in the top two we considered, with a school behind it on a friendly suburban block. The house is a short walk to a couple of restaurants and bars, and a longer walk or easy bike ride to many more. It has windows facing all directions, so it gets plenty of natural light. The house features a two car garage and a small backyard that’s perfect for us. It has two bedrooms but is about 150 square feet less than our current one bedroom condo. We’ll be going from around 900 square feet of living space to 780. Always rightsizing! The price point of this house also gives it solid rental potential using the rough calculation that the purchase price of a home should not exceed 10x the expected monthly rent. Whether we resell or convert it to a rental, we consider this home to be a diverse addition to our investment portfolio.

As soon as the renovations on the new home are complete (expected in early 2021), we’ll finish our relocation and list our current condo for rent. It should come close to breaking even, but our net housing expenses are expected to decrease with this shift. The renovation process is costly and time consuming, which is exacerbated because we like nice things. This is an example of how life has a way of unexpectedly changing the most solid plans. We’re here to enjoy the adventure, without sacrificing our long term goals.

Have you relocated for a job? What are your tips? What is your experience with real estate investing? Do you love it? Hate it? Leave a comment below and tell me about it.

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