Thursday, June 2, 2011

The Big Mistake

Having the benefit of hindsight I can say the biggest mistake we made as we embarked on residency was purchasing a home. A BIG mistake! The home isn't big, the mistake was. You probably thought, it was all those kids we had:-).

In a way the two were related. We knew we were going to live in this location for 6 years, we knew during that time chances were good we would have more children. I mean we already had one and were expecting another, so the odds were that in 6 years we would have at least one more, if not two, or three. A family needs a place to call home, kids need a good education, we needed to feel safe. It seemed silly to rent and throw away money for 6 years. We justified ourselves all the way to the bank. Where the loan officer confirmed we could afford the house we selected and more. But what did they really know about us? On paper I'm sure it looked like we were crazy for not spending more.

We did look at really inexpensive homes. After we exhausted all our options in our initial price range, eliminating all the ones in so-so neighborhoods, with tiny bedrooms and one tiny bathroom our realtor suggested we move up a little bit in price. Of course, after looking at homes the size of a mobile home anything she would show us would look great. And it did.

We settled on a home that was about the same age as myself. To it's credit it backed up to a nice neighborhood park, and was in a good school district. We knew it was going to be tight financially, but after looking for days didn't see another option, or wouldn't consider another option. One being we could rent and keep looking. But I didn't want to have to move multiple times. How lazy!

So we bought this home. Which would have been fine, until it wasn't. See a home of about any age needs constant nourishment in the form of maintenance and upkeep. Before we knew it we needed a new roof, garage door, gutters, water heater, and air conditioner. Now it needs a new driveway, appliances, and flooring. It's not going to get something it wants or needs because we don't have anything to give it. It has drained all or our resources and isn't going to give anything back.

We knew it needed work when we bought it, but we were hoping the work it needed would be cosmetic. The fun stuff like paint, appliances, flooring and lighting.  Instead we've poured more money than I care to recount into the necessity of "keeping it up".

What would we have done differently? I wish we wouldn't have gotten hung up on owning a home. I think we felt some sense of entitlement after finishing medical school. That somehow we had earned the right to our own home. That the length of time almost mandated that we own something. Isn't that what most people in their 30's who have graduate degrees and children do?

Again, this problem of owning a home wasn't supposed to be an issue. When we bought the home the economy was in a much better place. Our area hasn't been hit as hard, but anyone would be hard-pressed to find an area completely unaffected. We weren't thinking about having to sell the house for a profit, we just wanted to break even, knowing that by the time we were ready to sell we would have a nice big check (thanks to our new "real" job) to help start us on our way. Now that the circumstances have changed we have the added worry of getting our home ready to sell on a budget that doesn't exist, in a depressed housing market, with the anxiety of needing to walk away from the closing table (assuming we can sell it) with enough money to pay our first/last month rent when we move.

Advice to medical students and residents: Don't buy a house. There will be plenty of time for owning a home later. Unless you have piles of money to throw at it, stay away from the bank and go directly to the rental office. Use the money you save by not having to maintain a home or yard to have fun and enjoy your family. Spend time together, and maybe take a vacation. Build up your savings account, because all sorts of non-home related things can go wrong (cars don't last forever). Instead we are a slave to this house. Don't be a slave!

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