This is the second of two (fictitious) tales of home ownership. If you haven't read Part 1, jump back to yesterday's post.
Tomorrow we'll wrap up our two tales up with some thoughts. And a spreadsheet.
Let call our second character Shelley. As with Jamie in our first story, we meet Shelley just as she is about to buy her first home.
Story 2: Shoebox
Shelley is keen to buy a home. She's worked since she was 15 to save for a house and her savings, together with a small inheritance, means she has over $100k to put towards a house.
Shelley regularly escapes the city to go climbing in the mountains, and when she's at home she enjoys painting. She also really wants to have a garden larger than her three pots of herbs. So, she looks around for house that ticks all the boxes. A step onto the property ladder, a place she can enjoy being creative in, has space for a garden and isn't too much work so she can head away often.
She finds a newly-built house for $400,000. The marketing brochures claim it has been designed in a way that makes it cheap to run and better for her health. This sounds great to Shelley, who is looking at changing jobs and is concerned about how she will be able to pay the mortgage if she reduces her pay. She also suffers from asthma and hayfever, which can been particular bad in previous cold, damp houses she's lived in.
There's a catch of course: The new house is small (only two bedrooms) and there isn't a garage. It's also one of three units on a standard quarter-acre section*, which is how she manages to afford the house, and still have a back yard big enough for a garden.
Shelley decides the price and low running costs are worth the compromises and jumps in.
Over the next five years she enjoys living in her new house. The minimal living style imposed by her house changes her attitude to many things, including changing her wardrobe to a 333 capsule wardrobe. She gets to know an urban farm collective based nearby and, together with her neighbours living in the other two houses, establishes a shared garden on the property which includes a greenhouse. They experiment with different types of chilli peppers, and the strawberries in the summer are amazing!
At the end of five years, she gets a new job in another city so puts her house on the market. She has been able to keep the house in essentially 'as-new' condition and the shared garden attracts an older couple looking to downsize. After some back-and-forth, she sells for the same price she paid for it: $400,000.
There are many similarities and differences between the two stories. I've tried to make them believable, and you might be able to see yourself in both characters. Tomorrow we'll dig into some comparison of the two stories from a financial point of view, and look at some of the numbers in more detail.
* The 'quarter-acre dream' is often referred to in New Zealand and Australia. Many typical residential suburban sections are this size, which is around 1000 square meters, or 11000 square feet.