Reflections on Home Ownership: 2 Years In

Woo! I have lived in my condo for over two years now. In some ways, it feels like it has been far longer (my mom was convinced I’ve been here three years). And you know what that means? The next time I request one of my credit reports, I only have to list this address :)

If I sold my condo today for the exact same amount I bought it for 2 years ago, I would have spent about $9,019.23 more than I would have renting over the same time period. If the market has truly gone up by as much as it looks like it has by the sale prices around me, buying would be cheaper than renting today by $76,284.27. Buying should be cheaper than renting at my purchase price by the end of 2014.

The mortgage balance at the end of June sat at $152,167.66. It was at $187,552.40 at the end of December, so I have paid down $35,384.74 in the last six months, for a total of $133,832.34 in the 24 months that I have owned my condo, while still maxing out my 401(k), Roth IRA, maintaining my $20,000 emergency fund, and occasionally adding to my taxable investments. I now have 57.5% in equity (assuming purchase price) and have paid off 46.8% of the original mortgage balance. If I didn’t make any more pre-payments, I would have just under 15 years left on the mortgage, which is pretty good considering that it was a 30 year mortgage 1.5 years ago.

What interesting things have I bought for my condo in the last six months?

  • ~$2,500 on the closet organizer install and painting. These have been absolutely wonderful and my only regret is that I didn’t do it right away after moving in! Spending $2,500 on it then seemed a lot harder to fathom than it did this year.
  • ~$110 on replacing the two programmable thermostats in the condo. We will see in December whether this reduced the electricity from heating at all, but the new thermostats are definitely far nicer to use and they do seem to detect the room temperature better. I’ve also been considering installing another heating vent in the master bedroom as it gets chilly on the end of the room without one in the winter. That would probably cost $500.
  • ~$140 on a new container, a second perennial and then some annuals.
  • ~$100 on replacing all of the lights in the kitchen, hallway, second bedroom, and some of the lights in the master bathroom with LEDs. If all of my light bulb electricity is in the second tier and each of these lights is on for an average of 3 hours per day, it would take 382 day to break even or slightly over a year, shaving $7-26 off each bimonthly electricity bill.

I got a bit frustrated with how much my property taxes and HOA dues went up this year ($700 from last year), but then I realized that if I was still renting, my rent would be up probably $300/month from last year, so I’m quite happy with where things are sitting at the moment.

Things haven’t been super exciting on the mortgage front these last six months. The mortgage is almost half gone though, which is pretty exciting! Some days, the chart below astonishes me at just how much of the mortgage I’ve paid off in two years. $133,832.34 is $66,916.17 per 12 months or $5,576.35 per month on average, which is a lot of money!

June 2014 Mortgage Balance

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8 thoughts on “Reflections on Home Ownership: 2 Years In

  1. Wow, great work with paying off half of your mortgage balance in just two years! The market appreciation in most cities is just icing on the cake too. It is certainly crazy times for a home owner right now. I don’t think anyone knew that prices would slingshot upwards as much as they did in the past year. If you were in the market to buy today instead of two years ago and considering just how much prices have increased, do you think you would still buy today?

    • Probably not. The New York rent vs buy calculator with my numbers from two years ago shows it is cheaper to buy within two years. If I input today’s numbers, it says it would take nine years, so I would probably just have kept renting.

  2. I’m still jealous of the closet remodel =) Redoing the floors and closets in our bedrooms will have to wait probably 4 or 5 years, but in the meantime I’ll definitely enjoy the changes we’re planning on making to our kitchen next year.

    With the rent vs buy comparisons, one of the big things that always got me is would we have paid to rent a house comparable to ours… and the answer is probably no. We always lived in functional, but very affordable apartments, and focused more on staying flexible than settling in permanently. The house is different. So while we’re paying less in market rent on this place, we’re paying more than we would have if we had stayed in the neighborhood where our rental duplex is, though I guess if you net out principle decrease every month it’s comparable, but that feels like cheating.

    • We have been so happy with the closet remodel! It has certainly made the closets much nicer to use, especially with my boyfriend moving in for real at some point in the near future.

      My rent vs buy calculations compare the one bedroom apartment I had to this condo. I do net out the principle decrease every month, but I add in the loss of the extra amount I’ve paid towards the principle and any repair costs. My outgoing monthly cost including the mortgage is currently just under $1,700/month for this place and it would be just under $2,200/month in my old apartment. I wouldn’t have rented a two bedroom apartment by myself though, which is why I’m calculating the renting costs for a one bedroom apartment.

  3. I love the idea of a closet remodel. Sometimes I don’t get why closets are the way they are, especially in new(er) builds. It just seems silly to me to only have a rod and a shelf considering it isn’t functional in a lot of the empty space.

    Great job at paying down your mortgage at such a fast rate. It must be pretty awesome to be maxing out your investments, keeping your EF, enjoying life, and paying down your mortgage so much in 2 years!

    • My place isn’t particularly new, but most of the condo had been remodeled nicely, except for the closets. They were pretty nonfunctional and this upgrade has been pretty useful. It’s amazing to have shelving in the closets!

      Thanks! I’m trying to not pay down my mortgage too much and then end up with not enough cash on hand, lost tax-advantaged space, or a lost opportunity for a nice vacation, while still paying it down fairly aggressively.

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