As an investor who has an ownership stake in 8 properties, you could say that real estate is on my mind quite frequently. I’ve been blessed to not only earn high income, but I also got started with investing (and frugality) at a pretty early age. With that said, I’m also somewhat unfortunate in the regard that I also happen to live in one of the most expensive cities in the country (Silicon Valley).
So, naturally, a question I get asked quite often is whether or not I own my own personal residence? I’ve answered this before, but in case you missed it, the answer is no.
If circumstances were different, like say I lived in the Midwest, then I’m almost certain that I would own and occupy my own single family home right now. But living in the Bay Area (as many are aware), the barrier to entry is very high, so if you are going to put down some roots, you had better be sure you know what you’re doing!
I’ve lived with family or rented my entire life. Right now, I’m currently living with family again, as I live with my brother Living Proof (a contributor to this blog). We split all the bills, and life is pretty good, as we get along well for the most part. However, being the planner that I am, I can’t help but look down the road and realize that our situation is only temporary, and sooner or later things will change for the both of us…
The reality for me right now is that when I think about owning a personal residence, I’m left with uncertainty and question marks.
- Do I want to stay rooted here in the Bay Area long-term?
- What location will I settle in?
- Do I care for good school districts?
- How many bedrooms?
- How many bathrooms?
- Condo, townhouse, or single family?
- Do I need a backyard?
At this stage of my life, I really can’t answer any of those questions. All I know is that I have a serious case of wanderlust and want to start traveling around the world… I’m not sure if buying a primary residence right now would be in my best interest.
As investors, we all know that your own home isn’t really an investment anyway (unless you plan on speculating on massive appreciation down the line)… On the day-to-day, it’s a money pit. True, I could scale back down and get something more affordable so that the cash flow numbers work better so that someday in the future I could conceivably turn the property into a rental…
But I already own two such units in the Bay Area… Do I really need another minimal (or negative) cash flow property?
For me, it also doesn’t make much sense to throw down a $100,000+ downpayment to try and secure a nicer $800,000 single family home in a wonderful location. For starters, I would be out of pocket for more each month than what it cost to rent a 1 bedroom…
What it comes down to, most importantly, is that I’m still single and have no idea who my future partner is… How can I predict in advance what she might want? Who knows, maybe she’ll have more wanderlust than me and never want to stay rooted in any one location for too long? I can’t say for certain, but I think I could be down for that… Or, we might relocate to a cheaper location so that we could stretch our dollar further? Perhaps she’s also a Bay Area native and never wants to leave, and in turn wants to buy that aforementioned $800,000 home and start a family?
I just don’t know… So, that’s why I’ve done nothing up to this point, but instead continued focusing on my investment game. These days, my health is the number one priority.
But regardless of where my future takes me, I’m almost certain that I’m going to be grateful for making the decision to start investing when I did (sooner rather than later)… even though I didn’t have many things figured out.
Such is life…
Yes, it does kind of suck that I’ve gone about life in kind of a backwards fashion! Isn’t the proper sequence supposed to be: get married, buy a house, and then really start figuring out all this finance stuff?!?
You would have had me fooled if you told me beforehand that my life would turn out this way!
Anyway, so I invested like crazy, and am now about ready to retire… Soon, I will need to indulge in wanderlust and then find my wife so that I can finally figure out where I want to live long-term…
Right now, I don’t have the answers, unfortunately… So, I’m just gonna keep swimming until I do.