I thought, since I haven’t posted anything substantial in a while, I would share some of the ways my family taught me to think creatively to get what you need in a home. This may be less relevant to home buyers in the States, where I hear house prices have fallen and perhaps those trying to get into the market are in a relatively better position. Over here in Oz, house prices are climbing almost out of reach of first-home buyers, and it has made me think of ways to figure out how we will afford our first home.
My parents are not wealthy, though they have always been creative about making ends meet and willing to take a risk where necessary. My parents aren’t together anymore, but they remain good friends. This extends to the point where Dad drives around the car mum owns because she has a much nicer work vehicle. This is pretty amazing when you consider they have been separated since I was about 6. Though they aren’t in love, they are still good friends (which is great for us kids!).
Anyway, even thought they were lower working class, mum and dad managed to buy their own home. They did this initially by buying on the outer suburbs of town (a common way of getting into the market, I guess). They bought land first, and paid off a chunk of it before extending the loan to build their home. This was at a time when my dad was earning very little and interest rates were at 17%. I think the basis for doing this was this: though they had to pay off the land AND pay rent, it was worth it to prove to the bank they were responsible enough to pay off a larger loan. At this time, you had to wear a shirt and tie and plead with the bank manager to give you a loan (not like now!).
After a time, my grandmother moved in with my parents because she had a back injury and needed some short-term support. I guess this helped cover expenses to some degree and I think they must have gotten on pretty well because after about 5 years at that house (and maybe two with Nana living there), mum and dad moved closer into town and built a new home.
Again they involved the family to make things meet. They bought from a kit home company, but managed to individualise the plan so that the home was essentially like two units (with a wall in the centre and identical facilities on each side). Nana lived in one side (two bedrooms) and we lived in the other (three bedrooms). There was also a large granny flat out the back, which was for my mum’s uncle (he paid for its construction). So essentially my parents managed to buy a nice three-bedrooom `house’ with a little help from their extended family.
Needless to say, having a lot of elderly adults in the family would have been stressful for my parents at times. However, there were also huge advantages. Nana cooked our dinner most nights, which obviously allowed mum to work part-time. Also, Nana and my great uncle put in for the food and utilities, which saved them a fair bit in expenses. Also, we kids had easy access to our grandmother (which we loved!) and my parents had built-in childcare. This meant they were able to go out at night whenever they wanted.
Eventually, the family structure started to change, and the house was altered to suit this. My great uncle passed away, and he left his part of the home to my parents (he had no children). Mum and dad had also separated by this time, so mum bought dad out. Also, as my grandmother got older, she realised her needs had changed. Mum bought out Nana for a fair sum and this gave nana some `free cash’ - something she’d never had, as she became a widowed pensioner with two children at the age of 35. This free cash was also going to allow Nana to leave a cash inheritance for both daughters, and pay for her own funeral (don’t ask - she’s focused on these kinds of things!). Mum `opened up’ the home by knocking down the central wall and did a few renovations so that my grandmother could keep her large room and gain an ensuite. This made it easier to care for my grandmother in her old age, and it suited her because she no longer needed or wanted so much space.
Though it took a few extra dollars along the way, Mum now owns a 5-bedroom house with 2 bathrooms and an apartment out the back - this would have been unthinkable when she started all those years ago. Having the equity in this house also allowed her to buy a duplex a few years ago before the boom, and it is now worth triple what she paid for it then. Being able to think laterally - and tolerate her relatives - paid off, so that she is perhaps in a better financial position than many of her friends who made more money along the way.
By the way, though it might sound cheap to buy a `kit home’, my mum has great taste and everyone who enters comments on the house’s high ceilings and open-plan layout (one time my brother was having an epileptic seizure and the paramedics were momentarily focused more on the home than on him!). Mum is about to put her home on the market and it’s likely she will get a higher price than most homes nearby because it is so unique. Apart from the fact it was well designed and constructed, the fact it is a little different to the average house seems to be part of the appeal.
I guess I’m not advocating any particular plan to achieve home ownership. I’m just saying it doesn’t hurt to `think outside the box’ occasionally when trying to figure out how you can achieve it.
Tomorrow I plan to talk a little about how my parents’ attitude to money affected my own choices in money management (for the good and bad elements!).
