As I teased in our July expense report, we have some big news… we bought a house!
When Poopsie and I lived in Newcastle, we were house hunting. We found plenty of homes that we loved, but while technically we could afford it, we definitely could not justify spending $700 000 on a two bedroom townhouse. We were still trying to decide if we would make the plunge when, due to life circumstances, we made the move to Brisbane.
For those who don’t know much about the Australian property market, it is incredibly expensive to purchase a home in our Southern cities, such as Sydney, Melbourne and Canberra. Due to its close proximity to Sydney, Newcastle prices were also starting to get out of control. Brisbane however, had not yet seen a property boom and thus, housing is much, much more affordable.
We started to attend open homes, still not 100% convinced we were going to buy. We regularly ran our numbers, trying to figure out if we really could retire in our desired eight years. Without a paid off house, we just could not make the numbers work, no matter how much we tried.
It was settled then. In order to retire early in eight years time and commence a life of travel, we needed to buy a house and work hard to pay it off quickly.
We visited a lot of open homes. A colleague of mine had recently built a townhouse in the area and we both really liked it. It was the perfect size and layout and, best of all, none of them had Body Corporate fees. We continued to visit homes but we were on the lookout for one of these townhouses to become available.
Finally, one did. We toured it the day it was listed and made an offer a couple of days later. Our first offer was not accepted, but our second one was! It was ours!
We picked a bit of a silly time to purchase a home as less than four weeks from the day our offer was accepted, we were leaving for our trip to America. We had to do a very, very quick settlement and organise a removal for the week before we left.
We had been renting subsidised housing from our employer. As a way to encourage employees to no longer utilise the subsidised housing, our employer pays for removals to purchased own homes. Therefore, we won’t have any removal costs which is great!
Our townhouse is four bedrooms, two bathrooms with a double, tandem garage. There is a lovely front verandah off the living area and a small courtyard at the back. Built in 2009, it is in impeccable condition. We purchased the property for $370 000 and put down a 20% deposit.
We are aiming, conservatively, to have the mortgage paid off in five years. This will mean we will contribute less to Vanguard in the next few years, but if my sums are right, we will still be able to retire in eight years time. We look forward to chronicling our journey.
Oh, and that $550 that I didn’t explain in the July expense report? That was for a building and pest inspection! I also won’t be including our deposit for the house as an expense. Given that the deposit was close to one of our annual salaries, this would obviously seriously impact our savings rate and wouldn’t provide an accurate depiction of how we saved for the year. We have spent our time saving our money so that, when it came time to purchase a home, we were ready to do so!
Have you bought a house recently? What was your experience?