Real Estate with The Happy Hour Ladies
Hello Martinis and Your Money Listeners! Today is the last Friday of the month and my regular listeners know that on the last Friday of the month, I host the happy hour on the podcast where I gather great friends with me to drink cheap drinks and talk about money topics. In 2020 and 2021, we’re seeing a number of Financial Gym clients become property owners or show more interest in becoming property owners due to lower interest rates, more working from home because of the pandemic or a desire to shift asset allocation because of historic market highs, so I’m dedicating the month of September to property ownership. So today, the happy hour ladies join me to give their takes on homeownership, whether or not it’s a goal for them (and why) and some important things to remember no matter which side you stand on. Before we get going, as a side note, Kassandra had a personal issue arise and she wasn’t able to record with us this month. She was missed, but I know you’re going to love to hear what Melanie and Joy had to say. And now here’s my friends
What are we drinking?
Melanie – Non-alcoholic chocolate milk stout by Untitled Art
Joy – Rosé
Shannon – Cabernet Sauvignon
Podcast Notes
Joy has been a homeowner for over a year now. Although the pandemic was part of the push for the timing of the purchase, she used her mental health week off and her husband’s schedule to start her search in their desired locale and was happy that they bought just before the housing rush.
Although Joy doesn’t inevitably default to recommend the purchase of a home to everyone, she feels that homeownership is still a good move for the right people in the right situation. Later in the conversation, Shannon reiterated this point.
Melanie rents and doesn’t have an interest in homeownership. She’s lived in high cost of living areas and grew up with her parents also renting. She appreciates the flexibility of renting and feels the stock market, etc. can offer better options for investing.
Shannon has been both a renter and a homeowner. Her first experience with homeownership was when she got married and from there, had sold and bought a few times as their jobs had moved and the family had grown. By the time she moved back to the New York area, she just wanted to rent.
In an effort to enroll their son in a good school system, they purchased another home. This proved to be a considerable financial burden so they ended up selling; Shannon has been renting ever since.
Shannon feels the mantra of “you have to be a homeowner to build wealth” is a myth. While it can be a path, both her and Joy feel it’s more of an old school philosophy and there are many other paths to build wealth that don’t require homeownership.
Melanie affirms the myth and feels that renting is not “throwing money away”, you are paying for a place to live. Owning a home does not always make the most sense depending on the area and situation. Being a minimalist, she feels homeownership opens up a lot of potential issues and stress. As a renter, she enjoys falling back on the phrase “not my problem”.
Shannon confirms that if you’re paying rent and still able to save, you are not “throwing your money away”. Due to the amortization of a home mortgage, most of your money is going to interest in the first 5-7 years on average. This could actually be construed as throwing your money away, especially if there’s not enough equity building to offset this.
Shannon also feels that deciding what to do with the equity in your home down the road is important. While your home may have built wealth, you’re probably still living there and not have access to the equity. This is where some have gotten into trouble with reverse mortgages due to not fully understanding how they work.
Joy feels it can be more of a lifestyle over financial choice to own a home. Spending your spare time and money on home projects and repairs may be something you enjoy in making your house your home, but it may not benefit you the most financially.
Shannon stresses that while you need to be aware of the challenges, don’t let the finances get in the way of your dream of homeownership. Go after it with intention. A homeownership goal is always possible.
Shannon feels that to offset the costs of buying and selling a home, you should intend to be there 5-7 years (generally speaking); this way it doesn’t end up costing you money to get out of your home.
Takeaway: My biggest takeaway is that homeownership does not have to be a goal for everyone, but if it is a goal of yours, never let finances get in the way of accomplishing your goal. Over the last 8 years, we’ve seen so many clients who never thought homeownership would ever be in their reach achieve this amazing goal. So keep manifesting!
If you have any topics you would like for me to cover on this podcast, I encourage you to email me to shannon@fingyms.com or join the private Martinis and Your Money Facebook group and let me know what you want to hear. If you’re thinking about becoming a homeowner, I highly recommend Financial Gym’s First Time Home Buyer Course that you can find on our website. If you’d like some accountability to help you achieve this goal faster than you imagined, then you should head to financialgym.com and start working with one of our trainers today. And remember that Martinis and Your Money listeners get 15% off of your Financial Gym membership. We’d love to help you accomplish your dream of property ownership sooner than later.