A long time ago, in a galaxy far away, I was a senior medical student looking to buy a house. There were no blogs back then–let alone the doctor financial blogs we have now–detailing why this is a bad idea. Or maybe a silly idea. To be fair, my Dad wasn’t so keen on it, but at that stage of life I wasn’t listening.
HGTV was in its heyday, and it was really the beginning of the housing bubble (you know, the one that went kaboom in 2008). Everything pointed to buying a house: moving to a low cost of living (LCOL) city, feeling ready to own a house now I was in my 30s. The whole zeitgeist was that if you weren’t buying a house, you were missing out. The clincher was the family who moved into the (previously vacant) apartment below me in my last 6 months of medical school. Their toddler had night terrors, and I’d be woken up at midnight to terrified screams (looking back…I sure hope that kid was having night terrors).
I had a wonderful real estate agent, who spent hours showing me multiple properties–which, given my budget, wasn’t going to get her much in the way of a commission. In the end, I bought a single family home, which had been a rental for several years. It was in a good (not fancy) neighborhood, not too far from the hospitals I would work at. In retrospect, I overpaid significantly, because I was pressed for time and not ready to bargain. But it was still affordable on my resident salary.
What issues could a resident have with owning a home? Especially if the mortgage wasn’t too high? Let me count the ways:
- Delayed closing. The house was a rental and wouldn’t be vacated until August 1, well after the start of internship. That meant I needed to find short-term housing, and would have to close on the house and move in while already working those long intern hours (rather than getting all done before the job started).
- Renovations. In the grand scheme of things, I didn’t have much done. Carpeting in this former rental was replaced and the grimy, smoky walls were painted. Remember that I couldn’t move in until August 1? This meant either working for hours with paint after a full day at the hospital (or worse, post-call!) in the days before limits on resident work-hours, or hiring out the work. In the end, I hired out: the work got done much more quickly, but at a price.
- Equipment failure. The water heater broke over Christmas, my intern year. I had a home warranty, so the money wasn’t an issue. But working Q2 (every other day) in the ICU with no way to shower at home was…not ideal.
- Home-owner chores. I don’t mean vacuuming or cooking dinner, which were sometimes challenging enough. I mean getting up early to shovel the sidewalk before going in to rotate in the ICU (again), and hoping not to be fined if it snowed again before I came home the next day.
- Pests. As a renter, I never had to worry about scrabbling in the walls or call Pest Control. Nor feel bad once I was told they’d killed the mama, but the baby squirrel kits in the chimney nest might make a little noise before they died.
- Home maintenance. I would afford my mortgage and taxes, and a few repairs, but not everything. I moved into a house with an old roof, and moved out of a house with a 3-year older roof. I think eventually the next (or second next) owner showed the roof some love. Had I had a significant leak while I was a resident, I would have been hard-pressed to pay for fixing the roof.
Overall, I did reasonably well as a home owner. I was able to sell my house in the rising market before the 2008 crash, and got out with my down payment intact. [No comment on the return of all the money I put into the house with repairs and mortgage payments.] I learned some lessons about home ownership that you just can’t learn from renting, and in the grand scheme of things, the stakes were pretty low compared to lessons one can learn with an attending house.
Some people, but not everyone, will be able to get out of their residency house financially intact. They say all real estate is local for a reason. I think the bigger problem–being a single homeowner whose time is consumed by work hour duties, with little time to DIY and no one help manage hired workers–are bigger reasons to avoid home ownership until later. Even the most handy resident may not have the resources–financial or time–to maintain their home properly.