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The high cost of homeownership

Author: J.D. Roth / Source: Get Rich Slowly

This week, Kim and I hired a contractor for what we hope will be the last major project on the “country cottage” we bought last summer. We’re replacing our rotting back deck and installing a hot tub. It’s an expensive (and extensive) project.

The cost hurts all the more because we’ve already poured nearly $100,000 into performing needed repairs on this property.

(In fact, as you may remember, we considered forgoing the deck replacement altogether.)

Budgeting for this job led me to reflect on the costs of owning a home. Like my colleague J.L. Collins (who believes a house is a terrible investment), I refuse to join to the cult of of homeownership. Yes, I own a home — and have for 24 out of the past 25 years — but I’m under no illusion that this is a smart financial move. Kim and I want to own an acre of land in the country, which is why we bought this place. We didn’t buy it because we think it’ll make us wealthy. (It seems to be having the opposite effect!)

Today, both for entertainment and catharsis, I want to spend some time talking about the high costs of homeownership. And lest you believe the stories below simply prove that I’m a fool with money, I want to point out that my experiences seem typical. Everyone I talk to about homeownership has similar tales to tell. I’ll bet you do too!

Note: In an alternate reality — maybe my next life? — I’d be a competent carpenter and handyman, much like my pal Mr. Money Mustache. Pete has the skills and experience necessary to do most major home-improvement jobs himself. This saves him tons of money.
I don’t have these skills. I’ve begun teaching myself how to make minor repairs, and I can even build some simple stuff out of wood. But I don’t know how to replace a roof. I don’t know how to hang siding. I don’t know how to build a carport. I don’t know how to build a deck and install a hot tub.

My First Lesson in the Cost of Homeownership

In June of 1993, when I was 24 years old, my ex-wife (Kris) and I bought our first home. It was a nice ranch-style house in my home-town. The seller had prepped it for market by keeping the lawn a gorgeous emerald green. It was well-trimmed and well-watered even until the day we moved in (June 23rd).

I’d grown up in the country, just outside of town, and our lawn had never been gorgeous. It was a rough patch of brown grass and — mostly — various weeds. I relished the opportunity to have a lush green lawn.

I did everything I could to maintain the green. I watered for an hour in the morning. I watered for an hour in the evening. Sometimes I watered for an hour in the afternoon. Throughout the month of July, I probably watered the lawn an average of twenty hours a week. (Seriously.) I mowed twice a week with a reel mower. I also applied a treatment of fertilizer. To weed the lawn, I got down on my hands and knees and crawled over every inch, pulling noxious plants by hand. No joke — I actually did this!

The days were long and very hot, but my lawn weathered it well. As July drew to a close, our lawn was, by far, the most spectacular lawn in the neighborhood. The most spectacular lawn in the city. For all I know, it was the most spectacular lawn in the state! It was a carpet of deep green, completely weed-free. I was a proud, proud man.

One weekend in early August, we attended a yard party at a friend’s house. The grown-ups sat around and talked about life, talked about gardening. The conversation turned, and people began to complain about their water bills. Water bills? Kris and I exchanged puzzled glances. Water bills? The conversation continued, and people began to compare water bills.

My heart began to sink. The implication was clear. I mustered the courage to ask, in a small voice, “Do you mean you have to pay for water?”

“Well,” said one woman. “Do you live in the city?” I nodded. “Do you have your own well?” I shook my head. I had grown up with a well, but didn’t have one now. “Then you’re on city water, and you have to pay for it.”

I broke into a cold sweat. “How much does water cost?” I asked. I’d always thought water was like air: a fundamental human right. Free! How could somebody charge for water?

Our first water bill came several days later. It was $80, which seemed like a lot to us at the time — especially since we had budgeted a grand total of zero for the expense.

I cut back my watering after that to just a couple of hours a week.

The Ongoing Cost of Owning a Home

Kris and I learned quickly about the costs of homeownership, as all new homeowners do.

Our first Christmas, for instance, we woke to find that the water heater had failed. Water had been spewing from the pressure-relief valve all night long, flooding the back end of the house. Instead of opening gifts, we spent our Christmas day cleaning up the mess and finding a place to buy a new water heater. Ho ho ho!

The next autumn, we had a wind storm. Kris and I were worried that one of the nearby cedar trees would topple into our house. Instead, the back fence blew over. We got a crash course in paying for and constructing a wooden fence. (We didn’t do a good job of repairing things. Before we moved out of the house in 2004, we had to repair the fence once more.)

Fortunately, these sorts of minor catastrophes were few and far between. Our home was relatively new — built in 1976 — so systems seldom failed. When we spent on the place, it was generally elective stuff: putting in Pergo, painting the walls, building raised garden beds.

In June 2004, after eleven years in our little ranch house, Kris and I bought a bigger place close to Portland. This hundred-year-old farm house stood on two-thirds of an acre of land. Unlike our first home, our second home required a lot of ongoing maintenance. The roof leaked. The wiring was downright dangerous. (The electrician we hired was alarmed at the state of the wiring. He documented it to share in an online electricians forum where his colleagues exchanged horror stories.) Tall trees were diseased and rotten.