I know it’s been a while since my last post. I’m happy to report that my boyfriend and I are all moved into our new home and we couldn’t be happier about it. Who knew it was so much paperwork to buy and sell a home!
Before we bought this place, we sold the condo that we had been living in for 2 years for 163k, which was only $8000 more than what my boyfriend originally bought it for. In the end, it probably would have been better financially for us to be paying rent for 2 years rather than paying for the condo because we had about $4000 less after paying the realtor, lawyer, government and everyone else who gets a piece when you buy and sell a home and that’s after putting $10,000 down on the condo and paying over $800 in mortgage payments every month.
We knew that we would come out with less when we sold the place but decided the benefits of buying a house would far outweigh the loss we may have suffered now.
So what are the benefits you ask? Well I’ll tell you! The obvious ones are that we are living in this fancy “new” house, and we have a little bit more space to live in, we have a back yard, Johnny has a place to store his equipment. The best part about it (for me) is that we have a tenant (my brother) who is paying part of our mortgage for us. After collecting his monthly payment, and not having to pay storage fees for business equipment the house is only costing us about $200 more than the condo did. This number may be decreased in the future but I had to give my brother a low rate in order to lure him into moving to another city.
Now that the first step of my evil plan is in place and we finally have our first tenant, I am already looking to the future to figure out what my/our next step will be. We know that in around 5 years we are going to rent this whole house out and move on to the next one. That next house we can live in and partially rent out. We will use the income from both houses to help pay for the mortgages. With any luck, our out of pocket mortgage payments will be reduced to close to nothing on the next one and we’ll be living with much less stress and a lot of extra money to put away for our future.
I have also recently discovered how much cheaper houses are out side of the city. Did you know that you can buy a multi-unit home in northern Ontario for about $15,000! I could put that on my line of credit right now and go buy another house! The only problem is that I would need to pay someone to manage it, and who is to say that there will even be anyone up there who will want to rent the place out? Why wouldn’t they just buy the place themselves?
There is a middle ground though. I could buy a $100,000 home in the main part of a small town and have a fair chance of maintaining tenants. It still seems a little risky but it’s something that I might do within the next year or two. I will be talking to property management companies in any area that I’m considering to find out what the rent market is like first.
Anyway, those are my goals for the next 5 years, along with continuing to put as much money as I possibly can into my RRSP. Lets see how long it takes to make myself wealthy!