In this episode of Net Net Podcast, Lizzy and Lissa break down the hidden costs – financial and otherwise – of homebuying. On one hand, it is a major wealth building tool. On the other hand, there’s a high barrier to entry… and many costs beyond maintenance! Is homebuying worth it? Let’s talk about it.
In this episode of Net Net Podcast, Lizzy and Lissa break down the hidden costs – financial and otherwise – of homebuying. On one hand, it is a major wealth building tool. On the other hand, there’s a high barrier to entry… and many costs beyond maintenance! Is homebuying worth it? Let’s talk about it.
Main Topics
00:00 The Homeownership Dilemma
01:10 Runnin’ The Numbers Segment
02:46 The Philosophy of Ownership
04:55 Personal Homeownership Journeys
17:33 Reflecting on the First Property Experience
18:10 The Realities of Short-Term Rentals
20:37 Emotional and Financial Costs of Homeownership
33:26 20 Cents Segment
References for Statistics
https://fred.stlouisfed.org/series/MSPUS
https://fred.stlouisfed.org/series/MEDLISPRI6037
https://www.ally.com/stories/home/cost-of-owning-a-home/
Drop us a line
DM us on Instagram: @netnetpodcast or email us at hi@netnetpodcast.com
Lizzy: [00:00:00] Yo, I bought a house and it was the worst thing I ever did.
Lissa: For baby boomers and Gen Xers back in the 80s, the average home ownership rate for those people under 35 years old was 39.7%. For millennials, there hasn't been a year where there has been 39 percent of ownership.
Lizzy: Yeah, because we're fucked.
Lissa: Pretty much. So, is home buying worth it? Let's talk about it.
Lissa: Welcome to Net Net with Lizzy and Lissa, where we analyze hidden costs and empower you to make your own damn decisions in life.
Lizzy: I'm Lizzy, a strategist and consultant with almost 20 years of experience across finance and investing.
Lissa: And I'm Lissa, [00:01:00] an Accredited Financial Counselor and a personal finance content creator.
Lissa: We're best friends who talk about money and everything else. Everything else.
Lizzy: First up, let's run the numbers on home buying. The median home price in 2024 across the country was $417,000.
Lissa: In Los Angeles County, The median home price is $1,049,000.
Lizzy: That's a big difference. That's a big difference.
Lissa: Yeah,
Lizzy: We're struggling out here. It's real different. And that's just the cost of the house. That doesn't take into account all of the other expenses associated with homeownership, like the actual closing costs, property taxes, HOA if you need it, homeowners Maintenance. Maintenance. Bruh. Maintenance. Uh, insurance, private mortgage insurance, but the maintenance.
Lissa: That is the killer. Like, people don't think about the fact that everything is gonna break.
Lizzy: Yeah. All of those appliances, [00:02:00] gone. Pest control, lawn care, security systems. Leaf snow removal, if you live in one of those places.
Lissa: There are so many things. There are so many things.
Lizzy: It's wild, bro. It's interesting, this conversation between renting and buying always comes up.
Lissa: Like, what's better? Literally, there's no one right answer because it depends. Whatever works for you, right? Yeah, it depends on your situation. What you're ready to tackle, what you don't want to deal with, what you have the finances for.
Lizzy: The finances and the mental energy and the stress. Because calling a landlord and saying like, come through and fix this, that's a welcome relief if you've been fixing it all yourself. But at the same time, then you're at the mercy of someone else. Are they going to come? Are they going to do just like a janky ass job because they're cheap? You know,
Lissa: We've all been there. Yeah. So the big question is, what is the big deal with home ownership? Why do people care? Like, why do we want that so much as a big goal?
Lizzy: I mean, propaganda. We've been socialized, especially in the United [00:03:00] States to want that American dream, right? That is like the pinnacle of having like a single family home, white, white picket fence. Uh, it's ingrained in us from, you know, childhood and it's hard to let go of that, right? It, it is a sense of ownership, right?
Lizzy: I have this land. You can't take this away from me. And I know you have thoughts on that.
Lissa: I just think like ownership. I don't want to go on a tangent, but ownership as a concept is funny. Right?
Lizzy: Like this land is mine now. I just drew a line around it. It's me.
Lissa: Yeah, there's earth. There's earth and then like, at some point everyone decided like, we're gonna carve out these pieces of land and that's mine, that's yours.
Lissa: Yeah, I got it. And then airspace. Like, who owns like airspace?
Lizzy: It's like, The audacity. The audacity to be like, “This little plot of land is mine. I own it now.”
Lissa: Yeah. And, and everything above, like everything above it is also mine.
Lizzy: And then like mineral rights, everything below it. And we're going to slice and dice this up.
Lissa: From a philosophical level. I think it's really funny when I think about ownership, but you also have to like, come down to earth and like, that's how things are here, right? Like ownership means. That you have power.
Lizzy: Right. The reality is that real estate is one of the biggest wealth creators. One of the biggest wealth creating tools that we have at our disposal in this country period. I mean, it is a game changer if you can buy land and have it appreciate over time and you know pass that down that's generational wealth for your family. So that is significant. We can't act like it's not meaningful But at the same time it's important to question why? We're having these feelings why we think we need it.
Lizzy: Is it like keeping up with the Joneses? Is it just what is expected of us? Like you go to school you get married you buy a house and you settle down. Is that what you even really want? Does it make sense for you? Do you even need that?
Lissa: Well, I kind of want to get into it. Let's go. We're best friends.
Lissa: [00:05:00] We're both currently homeowners. We have different backgrounds. For a little while. Different, yeah, different stories. We're actually both in the middle of selling right now. In the process of selling. But obviously before we got to this point of selling, I want to know, like, your background, did you always want to own real estate and own property?
Lizzy: Yes. So, I grew up in a single family home, but we lost our home when I was a kid. I was nine years old. And eventually I, you know, ended up in another, you know, normal suburban household, but, um, That kind of solidified in me this desire to have that security, you know?
Lizzy: And then I'm also big on spaces, right? The environment that you're in creates your experience. So I, it's always been aspirational for me to have, what is my home going to be like? I would draw floor plans. I mean, I have a big interest and passion [00:06:00] for design and architecture. So yeah, I've, I've always wanted that.
Lizzy: I've always been, you know, browsing Zillow. I've always been on HGTV. You know, it's been a big part of what I envisioned for my life. But growing up in LA it doesn't mean that's going to be a reality right?
Lissa: Median home price over a million dollars?
Lizzy: Yeah in an area you don't want to live in. Yeah, it's wild
Lissa: I have an interesting, I guess, path towards Homeownership. As you know, I bought my first property, my first condo, in 2013. I was pretty much the only one in my age group and peers that was buying. And so, now in hindsight, I reflect on: why did I even want to buy so badly?
Lissa: It ended up being a great investment. So, so [00:07:00] the quick spiel is For those watching on video, I have this huge binder here. I just found it. These are my documents from the first condo that I owned. I bought it and then three years later I sold it. This thing is thick. It's a lot of papers. It's really annoying.
Lissa: I don't know what to do with it.
Lizzy: Trash it. You don't need any of that.
Lissa: Yeah, I need to trash it or shred it. I need to shred it. Shred it. So, that process, I didn't know what I was doing. I wanted a home because I thought that that's what you were supposed to do.
Lizzy: And you were doing well.
Lissa: I was doing well, especially amongst our peers at the time. I want to say at that time I was already making six figures. So sometime in my mid 20s. So I bought this place I bought it for about half a million, so 520, 000. Yeah. Still pretty pricey, right? I ended up selling it three [00:08:00] years later and it had appreciated to north of 700, 000.
Lissa: And that big jump in capital appreciation is what allowed me to get out of debt, pay off my student loans, pay off my credit card debt. I still had credit card debt back then.
Lizzy: That was a life changer for you, for sure.
Lissa: Very, big life changer. So I didn't actually go into it as an investment.
Lizzy: You also house-hacked from the beginning. Right. If you're not aware, that's when you buy a property and then you have roommates who supplement the rent. And you know, so your, your own personal cost is much lower and it's a form of investment.
Lissa: But just going to show, like, I stumbled into all of these things.
Lissa: I never watched like personal finance videos on the internet. I didn't know what I was doing. I just bought a place. It happened to work out. I rented some rooms out, had some roommates that lived with me. They paid me rent, which was part of my mortgage. But what I realized after selling that first place [00:09:00] was the money that could be made in real estate.
Lissa: And it changed my perspective in seeing real estate. As an investment rather than just this American dream type goal, which is where the goal came from for me. I grew up in a household. Both of my parents were immigrants from the Philippines. They both have these stories where they came to America with $20 in their pockets.
Lissa: It was come to America, work really hard, save up, buy a home, own it, and then have enough money to give to their kids to go to college. So that we could pursue the American dream. So I went into real estate because I thought that's what you're supposed to do, not because it was an investment.
Lissa: Then after that first success story that I stumbled into by luck.
Lizzy: It was kind of a struggle. And you were in a situation where. [00:10:00] I don't know that you had to sell, but maybe you had to sell.
Lissa: I had to sell, because I had a layoff scare back in 2016. Thought I was going to lose my job, started freaking out, didn't know what I was going to do, because I was cash poor.
Lizzy: Yeah, sure, you had assets, but they were illiquid.
Lissa: I was spending like crazy, I thought, oh, I have a house, I got it all. And I ended up having to sell. I don't know if you remember this, but when I was selling my place in 2016, I also didn't know about the selling process. I was just like, oh cool. I'm gonna sell it for like a $200,000 profit, but during that escrow, they found mold in my place.
Lissa: I had to do some renovations. The buyer wanted me to do them before they finished the deal. So I had to pay like $7,000 to get mold remediated. and refixed this whole wall, and I didn't have it. I borrowed, I asked, Liz, let me borrow a couple thousand dollars.
Lizzy: I got you, girl.
Lissa: And like, to think that to [00:11:00] even have friends that have a couple thousand dollars laying around is like, I feel blessed and privileged to have that.
Lissa: But, you and Kevin, you guys saved my life. I had to borrow from two friends.
Lizzy: But also, we've always been friends who talked about money, which I'm learning is not normal. Since the beginning, we've always been really transparent about this. So we've benefited from each other's experiences and it was not a thing. Cause you know, I, you knew I had it and if I didn't, you know, we would figure it out.
Lizzy: But that's the, another one of those costs. Like you don't take into consideration, even when you are trying to dispose of a somewhat illiquid asset, you incur costs, right? To clean it, to get it all fixed up–like you're going through right now.
Lizzy: And then you may have a new mortgage or rent on your new place or deposits. It's a lot that you have to front load while you're transitioning, so it was a potentially challenging situation that became like [00:12:00] transformational in your life. That gave you so much financial freedom.
Lissa: Yeah, it was a game changing move.
Lizzy: And it was very inspirational for me. I was like, “Damn. All right. Look what that girl did.”
Lissa: Okay, full transparency. I'm a millennial. So I'm late 30s now and I have a lot of friends who still strive for that dream of owning a home and I don't think there's anything wrong with that. But looking at these costs. Yeah, like what what? Should we be considering?
Lizzy: So that's kind of the situation I found myself in. I was cohabitating with my partner at the time. We had rent control. So both of us had these big aspirations of owning a home. I explained why for me, for him, he had never lived in a single family home ever. So it was really important or felt really important at the time.
Lizzy: And so we started looking at buying, but girl, our rent was so cheap. Any LA mortgage was going to be three, four, five, six times our rent for what? [00:13:00] Yes, you have an asset, but at the same time, you become cash poor. It creates a different level of stress. I was building my own business at the time.
Lizzy: So then it comes back on me like, “I have to make more.” You're kind of a slave to your debt at that point. So we ended up looking instead at investment properties, which got us in the situation we're in now. So I want to put forth a disclaimer that this is not a common experience for anyone with an investment property. This is a unique situation.
Lizzy: So, we bought a house out in the desert outside of Joshua Tree,California. It's a vacation destination. It became especially popular during COVID because it was a getaway outside of LA. It's like two and a half hours outside of LA.
Lissa: How far from like Palm Springs?
Lizzy: I think it's like an hour from Palm Springs. So we bought a one bedroom. [00:14:00] Like small, cute house on two and a half acres. and remodeled it, renovated the shit out of it. I mean, girl, we did. We are out there 120 degrees in the middle of July laying turf. We're on the roof. We painted every surface… like the sweat equity that went in.
Lissa: Liz is a DIY person. I'm an outsourcer. I pay people to do it.
Lizzy: I'm a master. I am handy. We did it all, but we were also like lowkey cheap, like, you know, it was a big outlay for both of us. Our first foray into investing, again, we were doing this together, which is a whole other topic: property ownership or investments with a partner.
Lizzy: So, you know, it was a big thing. And then it just became a comedy of errors. Everywhere we turned there was an issue, Legal issues– first it wasn't legally zoned as a house, even though we had bought it, we had a clean title, like we had everything. So [00:15:00] we had started renting it. We had to stop, go through asix to eight month process just for someone to come look at it and be like, “Oh yeah, that's a house.” So that put everything on hold. We started up again.
Lizzy: And if you're operating an Airbnb or short term rental, it takes a lot of time to get your rental history going, your reviews, your traffic and traction on your site. It's called your ramp period. Airbnb will kind of prioritize you in the beginning, so that ramp period is really important. If you don't do it successfully, your whole listing is messed up. So we had to restart that like four or five times. We had an electrical issue, three or four electricians couldn't figure it out. We ended up having to redo everything.
Lizzy: Just fits and starts to where over the past three years, we've only been able to operate it like a fraction of the year. And these are not typical issues. It was unique to this house, unique to these circumstances. But it's like one thing after another. So last fall we [00:16:00] finally got it up and running with a new manager that's actually like killing the game. Like we are making money. We're like, yes, this is wonderful. Come through. “Oh, you, you put in a new hot tub. It's not permitted.” Put that on pause. All right. Small setback. We'll go get this permitted. Then our manager says that they're leaving the market. They're shutting everything down.
Lissa: And why is that bad for you? Because can't you get another manager?
Lizzy: There's like no managers out there except the one that we had already left that was really underperforming. And, you know, just personally, my partner at the time, we're no longer together. So our original timeline for investment, which was “We're going to own this for 10-20 years”-- that changed. So now it's like, what are we doing? Why are we doing this? And we made the decision recently to just dispose of the asset. The problem is the real estate market has changed a lot in the past few years. So we bought it for 225. We put, all in, including, you know, closing costs, down payment, [00:17:00] mortgage renovations, additional CapEx maintenance, everything. We're in for like $130k. That's a lot of cash to put into this house. And a year out, we got an offer for $330k, which would have been a wild come up.
Lissa: A wild come up in one year, but you weren't ready.
Lizzy: We weren't ready. We weren't emotionally ready. We had prepared for this journey of renting it and, um, and gotten excited about that and we had a lot of attachment since we did so much of the work ourselves and it was kind of symbolic of this dream and our relationship so we didn't take it. Man, now we know.
Lissa: In hindsight.
Lizzy: In hindsight. Hindsight is 2020. Yeah. Now the market is so slow out there. So, you know, we're targeting $285k, which would be a break even for us, if you factor in the tax benefits, which are significant.
Lizzy: So, I don't regret it. I wouldn't change having had the experience.
Lissa: This is your first property.
Lizzy: This is [00:18:00] my first property, yeah. I wouldn't change having the experience because of everything I've learned and it was fun and it was a roller coaster.
Lizzy: But man, fuck that house.
Lissa: I'm glad you talked through that experience because, you know, I'm a personal finance creator. There's good ones out there like me, but there are also bad ones. And a lot of times you hear about these glorious side hustles of like, do Airbnb, buy a place for cheap or whatever, and like Airbnb it.
Lissa: And I'm sure there are a ton of success stories. I'm sure a lot of people make some great money from short term rentals. But I don't feel like we hear enough about the not-so-great stories. Of all these struggles. And like, you said it was one thing after another and that there were a lot of unique things about that particular house you bought.
Lissa: But I guarantee there's unique, particular things about any house. Like, I just told you I've dealt with mold multiple times in my properties. [00:19:00] Even broken appliances within the first two years of living in my place. I had to replace the water heater, the refrigerator, the washer, dryer.
Lizzy: We replaced everything but the water heater within the first three months. Everything. All of them. And, one of the things we replaced it with, we might have to replace.
Lissa: You have to replace the replacement.
Lizzy: But I think you're right, and so, through that experience, I actually ended up working in the short term rental industry for a few years. I learned a tremendous amount to the point of being considered an expert in the data and doing consulting on that. And you're right. It’s not that it's a crapshoot, but you can have a lot of expertise, you can go into it with a lot of knowledge, you can underwrite your risk all that you want.
Lizzy: I'm not risk averse, but I am risk conscious. I'm gonna be well aware of every single risk that I can make myself aware of before I make a [00:20:00] decision. And that doesn't mean that it's going to pan out the way you thought it would or that it should. That's something that you need to take into consideration because that's the nature of business and investing.
Lizzy: You have to expect the unexpected and be willing to ride those waves. But again, I think if you have that mindset of taking those risks. It's still worthwhile. You still gain something from it, even if it wasn't a financially successful investment and you're helping me get to that point.
Lissa: So I love talking about this on my YouTube, but sometimes the financial cost is not the only cost. So what I'm curious of your take for people who are interested in becoming homebuyers. They want to own a home, whether that's to live in themselves, whether that's to rent out. What else should they be thinking of?
Lissa: What are the costs besides just this, you know, we already know, down payment is going to be a [00:21:00] big chunk of money. But besides that, what do they need to be thinking about?
Lizzy: I think the mental, emotional cost is twofold. One, this is a stressor. Right? Or, or it can be. At any given moment, something could go wrong. Which, of course, has a financial component tied to it, but it just brings stress. It's one more thing to think about. Not that that can't happen if you're renting, but it's not your responsibility ultimately. So for example, when we had purchased this house, the biggest purchase of our entire lives, and they came back and said it's not zoned to be a house, a few months of that process was trying to figure out if all of the work that had been done had ever been permitted.
Lizzy: Which meant our house that had been converted essentially from like a shack to a full functioning house.. If it hadn't been permitted, we would have had to go back and permit all of it or tear it all down and start over. And we own this house now. We [00:22:00] can't give it back. You don't return it.
Lissa: So stuff like that isn't disclosed during the sale?
Lizzy: No, it was, it was kind of grimy, but no.We didn't even get all our title information until the day we closed. It was a little bit wild.
Lissa: That's how escrow goes. That's how it goes, right?
Lizzy: Yeah. You're at the mercy of the seller, the lender, you know, It's tough, right? And we didn't know.
Lizzy: Now I will never not look for that again because I've learned. Yeah. So the mental/emotional cost. But a unique one that comes up for me now is the mental cost or just factor of being committed to one place and financially committed to it. Because it is an illiquid asset. The market could go down and if you're not in a place to sell if you want to, or you may have to sell at a loss, you may be upside down. It's just a big obligation and an anchor to a specific place.
Lissa: Because the whole time those things were happening, that you had to [00:23:00] fix the zoning, you couldn't rent it out? You guys were paying the mortgage.
Lizzy: Of course. It's our obligation. I can't be like, “Well, I can't rent it, so I don't have to pay this now.”
Lissa: So that's something I think about. Yes, we're talking about the financial cost here, right? You're paying a mortgage on top of your rent, but the cost of that stress. Because now you're thinking about this expense on your budget. That's a pretty big, chunky expense that was meant to be recouped on. You were meant to make money back on that. Maybe not the first couple of months. But ultimately you were going to.
Lizzy: It’s supposed to get a return, not have a cost. I mean, we had a three year expense essentially. But also, for me, knowing that I was pursuing it as an investor, the mental cost of that, which is my own issue, is like feeling embarrassed or feeling like, “Damn, like it's not doing what it's supposed to do.”
Lissa: Because the best success [00:24:00] has come out of the learnings you have. Sure.
Lizzy: But you still experience those things, right? You still feel the feelings.
Lissa: It's valid. It's valid.
Lizzy: What about you? What do you think are some of the other costs, the non-financial costs?
Lissa: I think you hit on it right there. The emotional cost.
Lissa: For me, the first place that I bought, I loved it. It was my first place. I thought I was gonna pay off the mortgage at some point sooner than 30 years and just have it. But as I mentioned earlier, I felt like I was gonna lose my job. I felt like I needed to sell this place and take advantage of the appreciation. It was emotional for me to let go of it because I lived in it. It was my first property. It gave me a sense of success and fulfillment that I did what I was supposed to do. I've succeeded. I've [00:25:00] since then changed my perspective on what success means. I don't feel like I'm successful just because I own a home, right?
Lizzy: So how does that translate to your current situation?
Lissa: Oh, so my current situation: I bought a condo in 2013, I ended up selling in 2016. Next couple of years I saved really hard because I was like “next property I buy, it's gonna be an investment in some way shape or form.” So in 2019, I buy a place. Already going into it I knew I wanted to have roommates to live with me, so I could house hack again so that they could pay me rent and they'd pay part of my mortgage. And they didn't mind because they were going to rent somewhere anyway. And at that point, I was cool with having roommates. I didn't want to live alone.
Lissa: And I went into it thinking this is going to be an investment property. I'm going to rent it. I'm going to house [00:26:00] hack until I'm ready to move out, then I'm going to rent it out. Well, I'm selling now, and the reason for that is it, I had to weigh between two things. Do I want to take this appreciation now, because it has appreciated, and have some liquid cash flow that I could use towards other competing financial goals that I have in my life–significant goals, planning a wedding, doing IVF–
Lizzy: Building your business.
Lissa: So there's a couple of things going on and I actually thought that I wanted to hold on to it and, and rent it out. But the more I thought about it, it just made more sense to sell. I don't have the emotional ties to this place like I did that first place. I love the place. Don't get me wrong.
Lissa: It's in a prime neighborhood in the Westside of Los Angeles, very close to the 10 and the 405 freeways. It's a great location. But I also don't have that emotional tie. So to me, I look at it from a financial perspective, and I feel okay about the decisions I am making with it.
Lizzy: So do you think you would have made that same choice if you hadn't redefined your own vision of what, or version of what success is?
Lissa: No, I think I might have felt, I think I might have made more of an emotional decision on what to do with it. Maybe I would have stayed and held on to it, but like, what am I going to, like, struggle with finances because I had all of my stuff, all of my equity is sitting in this house.
Lizzy: I think a lot of people feel that pressure of like, “oh, this is what you're supposed to do.” Or the textbook, situational approach. But the reality is you have unique circumstances. Everyone's circumstances are unique. So you have to evaluate, based on where I'm at and where I'm trying to go, “Is this the right move for me?” [00:28:00]
Lissa: It's a very personal decision. I really really get annoyed when I see people like. “Oh, I’m Team Rent versus I'm Team Buy.” Look, it's not that simple, right?
Lizzy: I'm evaluating that exact situation right now. Okay, if I want to go into a new place, do I want to buy? Do I want to rent? And financially even, in certain markets, you may be better off renting.
Lissa: Yeah, it's just the reality or at least on a short-term basis.
Lizzy: But then you have to consider all the other things like the social aspects, privacy, your time, upkeep and all of that. Do you want to have this commitment because owning a home is a commitment?
Lissa: I kind of want to go back to, at the very beginning of the episode, we mentioned that statistic that for baby boomers and Gen Xers, there was a higher rate [00:29:00] of home ownership when they were young, in their 20s, 30s. A lot of them owned. That's just not the case for millennials and future generations.
Lissa: And I think it's tough because we internalize a lot of our goals and values from what we get from our parents and our surroundings. And they mean well. Our parents mean well. I think that narrative that we're supposed to buy a home and that success, I know where it comes from. I understand why that was it for them and older generations, but I think we should normalize it being just different nowadays.
Lizzy: Well, time, time has changed. And one, the financial difference, right? My parents, the house I later grew up in, my dad bought for $185k, and he thought that was too much. $185k, he put 20 percent down, and their mortgage was like [00:30:00] $900 for a 2,500 square foot house that's now worth like seven, eight hundred grand.
Lissa: Yeah.
Lizzy: Um, where they do that at? Like, where are you going to find that today? Where is that at? That doesn't exist. Where is that at? But, wages haven't caught up to that. The other side of the equation, the income side has not caught up to the rate of appreciation for real estate, which is why it's such a powerful wealth compounding tool. But the cost of entrance into that game is very, very high. And if you get in like you did… you've made some strategic moves. And even me, it hasn't set me back, but you gotta pay to play.
Lissa: Yeah, but let me tell you– Actually both times I've purchased property, but the very first time especially, I bought too much house. I am risk aggressive, risk oriented.
Lizzy: Tolerant. Risk tolerant.
Lissa: Risk tolerant. So I'm willing to take risks with my money. Which can be a good thing and a bad thing, but I'm willing to take risks.
Lissa: I stretched my dollar out. I did things that [00:31:00] I don't suggest to people. You know, I'm a financial counselor. I've done things that I don't advise. I don't advise other people to do. I really don't. But if you understand the risks, the pros and cons, what the risks are... Like sometimes you have to make those big moves.
Lizzy: Gotta make moves. You have to make moves.
Lissa: So I've never put 20 percent down on a property. I've put 10 percent down and 15 percent down. When you put less than 20 percent down, typically you have to pay mortgage insurance, which is an additional expense. The first time I purchased, I was really, really pissed that I had to pay this because I didn't know what it was until after the fact, when they were like, “oh, this is an extra $300 you have to pay.”
Lissa: I'm like, for what? What am I paying for? Oh, just, you know, because you don't have enough of a down payment.
Lizzy: Right. Insurance against you. To securitize your investment.
Lissa: And I was pissed. I've had a weird rollercoaster relationship with private [00:32:00] mortgage insurance– PMI–because then after that I was like, I'm never getting PMI again.
Lissa: I hate it. And we even had this conversation. I advised Liz against getting PMI and I was like, do not ever do that. It's like the most annoying thing. I don't believe that anymore. I think when you run the numbers, it's a tool that might allow you to purchase before you can put 20 percent down. On my second place, I ended up putting 15 percent down, but it was a loan that didn't have PMI. So it just depends on the bank that you're getting your mortgage from. I remember
Lizzy: I remember having this conversation. So we got a second home loan, even though it was for my partner and I, it was actually our first home, because it wasn't going to be our primary residence. And so it was 10 percent down. So we still had to pay PMI. I remember having this conversation and being like, okay, the additional cost for a mortgage that low was like [00:33:00] $60 a month. To pay $60 a month to be able to make this investment versus not being able to make it at all because I don't have 20 percent… It was a no brainer to me. It’s kind of like a fee or a cost to play right. But you have to consider it that way. It is a tool.
Lissa: Yeah
Lizzy: That you can use appropriately or not, you know, but you gotta make those decisions for yourself.
Lissa: So we're moving on to the 20 cents segment. 20 cents: This is the segment of this show where both Lizzy and myself, Lissa, we each get 60 seconds to give our two cents on today's topic, whether we think it's a net positive or a net negative. Where does 20 cents come from?
Lizzy: Because you get the opinion of two dimes.
Lissa: I know, we thought we were doing something when we made that up. So Liz, you're up. Is home buying worth [00:34:00] it? I'm going to give you 60 seconds starting now.
Lizzy: For me, in my life right now, home buying is not worth it. Because, I don't know where I'm going to be in the next year, two years, three years, five years. So, the commitment, and the cost associated with that just does not make sense, right?
Lizzy: I don't have the stability and the direction to make those choices. And in addition, I've got trauma from my first experience. That's not to say that I won't do it again, man. Like five days ago, I told you, I probably will never own a home again. And guess what? I've been on Zillow like the past three days.
Lizzy: So I'm looking, I'm aware in the future. But for me at this point in my life, specifically, it is a net negative. Not worth it.
Lissa: Net negative!
Lizzy: I got time left?
Lissa: Yeah, you got 15 seconds to spare. You got anything else to share?
Lizzy: In the meantime, uh, that's all I got. I'm just quick with it. [00:35:00]
Lizzy: All right. Miss Lissa. Is home buying worth it?
Lissa: Alright. This is going to be a tricky answer because, as I mentioned, I sold a property. That is what allowed me to get out of debt. I'm super grateful for that experience, but it was stressful as hell. I'm currently selling my second property, so, you know, in a couple weeks, couple months, I'm not going to be technically a homeowner anymore.
Lissa: I had a great experience this time because I house-hacked and I also am going to make a profit from the appreciation. A lot of profit.
Lizzy: You got 15 seconds.
Lissa: You see, I be talking too much. Is it worth it? Is home buying [00:36:00] worth it? For me right now, even though I'm selling at this point in time, it's a net positive for me. It's a net positive. It's going to be on my list of things to do after this sale goes down.
Lizzy: Alright, that's fair. That's fair.
Lissa: Alright, remember, this is what we think at this moment in time. Because these decisions, whether you think it's net positive or net negative, it's dynamic. It changes. Can't nobody make the right decision but you. So, what do you think? Is home buying worth it for you?
Lizzy: Better decide for yourself. So hit us up, let us know what you think. DM us on Instagram at @netnetpodcast or email us at hi@netnetpodcast.com. And if you want to follow us individually, you can find us at…
Lissa: I'm at @wealthforwomenofcolor on TikTok, YouTube, and Instagram, no spaces.
Lizzy: And I am on socials [00:37:00] at @live_well_lizzy. That's where you can find me. Hit us up. Let us know. Is home buying worth it?
Lissa: All references, statistics, and resources mentioned can be found in our show notes. This podcast is for educational, informational, and entertainment purposes only, and should not be constituted as financial advice. Remember to always do your own research, consult a professional as needed, and feel empowered to make your own damn decisions.