The question of whether to keep on renting or start saving for a down payment is something that has plagued me for the last five years. I bought my first apartment when I was just nineteen years old, and at the time, everyone told me that it was the smartest decision I could have ever made. And at the time, they were right. About three years after I purchased my first place, I decided that I wanted to sell it and move into something that was nicer, something newer, with lower monthly maintenance fees. But something really terrifying happened. About a month before my partner and I were planning on making the firm decision to sell our apartment, the city we live in had a freak rain storm and the ceiling in our apartment started to leak. It rained so heavily for two days that on the third day, the ceiling in our living room actually caved in. We were absolutely devastated because we knew that fixing the roof was going to be incredibly costly and it wasn’t an expense that we were prepared to pay. The repair on the roof took, in fact, over six months, and with the passing of each month, we grew more and more nervous about what effect it would have on the price of our apartment if we decided to sell it. When the repairs were finally finished, we contacted our real estate agent, and had them list our apartment immediately. We thought that we’d have to play the waiting game to sell our apartment, but by the end of the first week, we had six competing offers on the table. Naturally we were elated, and after much negotiation, we managed to snag the exact price we were asking for. The next tricky part was to get out there and try to find an apartment to buy before our closing date so we weren’t left homeless, or throwing our money away on rent. Again, luck was in our favor and we managed to find our dream apartment, and everything worked out in the end.
Six weeks after my partner and I had purchased our apartment, we were on our way back from the tax accountant and decided to drive by our old place just for the heck of it. As we rounded the corner in our little car, we simultaneously gasped in horror. Bright green tenting had been placed all the way around the building and construction workers were on site to conduct the work. We phoned our real estate agent immediately to get the back story on what was going on with our old house and she started to laugh hysterically. Once she had calmed down, she explained that she had been sweating bullets for the last three days because our old building had been officially deemed a leaky condo, and each owner in the building had just been handed an assessment of over $125,000. I remember having to stop the car, pull over and vomit after hearing that. After establishing that my partner and I would not be responsible for any of the assessment because we had signed and closed our deal before the announcement, neither of us could believe that we had come so close to financial ruin. The assessment itself equated to significantly more equity than we had put into the place, as well as significantly more than the profit we had just walked away with. So when you head out there into the real estate market, all gung-ho, filled with optimism and excitement, remember that owning a home isn’t always what it’s cracked up to be, and it could end up bankrupting you.
