We first became homeowners in 2010, when our lifestyle was still “young, wild, and free”. LOL
Looking back, here are 5 things we regret doing and what we will do otherwise if we can get a do over.
Buying a New Build and Getting A Lot of Upgrades
The first house we ever bought was a new build. We chose the lot, chose the floor plan, and chose most of the interior items including lighting and flooring. In exchange for being able to “choose”, we had to pay GST and pay a premium for the upgrades.
That was a different lifestyle ago. We obviously weren’t thinking of the house value when we sell it.
We would advice our younger selves now to chose a second-hand home. By buying second-hand, we forgo paying GST. The cost of GST can now go into buying “more house”.
As for upgrades, we would recommend to our younger selves, to make a wish list of upgrades. Include a “home upgrade shrink account” in your budget categories and tackle your list one at a time. DIYing most of the items on your list is a fun way to put your own mark on your home and saving money on labor costs.
Buying A Single-Family House
Our first home was a single-detached-two-storey house.
We were initially looking for either a condo unit or a townhouse. However, after factoring in strata fees, we figured that we can actually afford a single-detached house. Good move.
However, a better move would have been to buy a multi-family house. Possibly a house with a legal basement suite or carriage house that we can put up for rent. We could have then used the rent money to pay part of our mortgage. This technique will free up money in our budget to either pay of our mortgage sooner, or invest somewhere else.
Getting Mortgage Insurance
We took out a mortgage insurance policy when we signed up with our first mortgage lender. I blame this for the lack of research on our part. Now, we know better.
Mortgage insurance, for us, is the worst type of insurance we can get. Why? Because we’ll still be paying the same premium even if the amount of mortgage we owe is lesser. That is never a good bang-for-your-buck deal.
Good thing we learned that quickly and canceled on the next year. Before canceling though, we made sure that we had appropriate life and disability insurance in place.
Furnishing with Cheap New Furniture
I distinctly remember that we had some friends visiting from out of the country about 3 days after we had possession of the house. So we did what any young, new homeowner would do, we bought cheap new furniture to furnish every room of the house. Terrible move.
Most of these pieces of furniture were breaking down within the second year of use. Also, repairing the items could cost more than replacing them again with cheap new furniture.
Today, we would advise our younger selves to furnish the home with carefully curated second-hand furniture pieces. There is a lot of solid wood and high-quality pieces of furniture listed on Facebook Market Place and Kijiji for cheap. Some pieces would only need a thorough cleaning while most would require some elbow grease.
I have been doing some furniture flips lately and I find it feeds my need for creativity. It also makes me feel good because I have saved the piece from the landfill. So not only does choosing second-hand items good for our wallet, but it also helps the environment and my mental health. Triple win.
Failing to Practice Paying for Mortgage and Budgeting Related Costs of Owning our Home
We budgeted for our mortgage appropriately. However, it was still a shock “missing” a huge portion of our income.
We would advise our younger selves to practice paying for the mortgage, by saving the same amount for at least a year prior to buying a house. This will provide you with a good liquid downpayment when the time comes to sign on the dotted line.
If saving the amount of your mortgage is too much while you’re still paying rent, then subtract your rent amount from the amount you are saving. For example, if you plan to pay $1500/month in mortgage but are currently paying $800/month in rent, then save $700/ month.
We would also advise our younger selves to budget for higher utility costs. When renting, utilities like heat, water, and electricity, sometimes even cable and internet, are included in the rent you pay. Don’t get shocked with your first utility bill by asking the previous owners how much their monthly bill costs.
It will also be a wise idea to incorporate a “home maintenance” shrink category into your budget. Having money ready for home maintenance issues, such as a furnace breakdown, or needing to replace the microwave, will prevent you from going into debt. Your home maintenance shrink account can also include the cost of yearly HVAC maintenance, or HOA fees.
In hindsight we could have saved a whole lot of money and increased our net worth if we have made better choices earlier in life. But we live, and we learn, right?
Do you have any regrets from being a homeowner? Chat with me in the comments below.