I am not sure what made me decide to buy a property. One day, I just decided that it was time. I loved my city, Denver, and I didn’t think that I would move anytime soon.
Besides, I was done paying down someone else's mortgage. I asked myself the big question: do I want the responsibility? Then, I decided that yes, I did, and so I made the leap.
I looked at many condos, from the average to the stunning – with new wood floors and nice paneling, new appliances, and indoor pools. For some strange reason, I found myself drawn towards the properties that were a little “awkward,” and that most buyers would avoid. When you live in a hot property market, all properties are wanted, but some properties are more desirable than others.
It was also the end of 2006, and the U.S. housing market was so hot it was bubbling.
Banks were throwing cash at future homeowners like it was Monopoly money, and that made me nervous.
I decided to purchase a much smaller property than the amount of loan that I was being offered (based on my job, yearly earnings, and credit report). My friends would joke and say that we didn’t live in NYC and that I could buy a place with more space. Yes, I could – but why? How much space does a single person really need? I continued my search until I hit upon one that my friends affectionately called “the bomb shelter.”
The “bomb shelter” is a ground-level unit (think almost a basement, but not really) in a triplex located in an amazing neighborhood.
It was super cute, and pretty freaking cheap. I decided to go for it.
I did make one big mistake when I made the purchase: I put zero down. Fortunately, I've paid extra on this property throughout the years and now owe around $58,000.
Even though I put zero down, I was pretty conservative with my loan and got a 30-year no pre-pay penalty on it. I made a point of putting extra money down on the principal balance of my loan each month. And each year even after the housing market crashed, my property value went up. There are some lessons that I’ve learned from purchasing an awkward property.
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People Will Question Your Decision
I had a lot of people tease me about my property until the housing market in Denver got so hot that now they envy my “bomb shelter.” You have to get your math right before purchasing an awkward property.
In my case, the mortgage and other home-related expenses were cheaper than renting – and still are, by a substantial amount. I was able to buy in a fantastic neighborhood that I grew up in – one that is walkable and is close to public transit.
Always Make a Down Payment
I was very lucky that my property appreciated during the time that I’ve owned it. If it hadn’t, I would have been upside-down in what I owed, and I would be writing a very different blog post.
You’re Your Own Landlord
You have to fix everything that goes wrong. Some years, it’s not that bad, but other years – like the time when my refrigerator and hot water heater broke the same week before I had overseas guests arriving – it’s expensive.
Today, thanks to an unpopular decision that I made, my net worth is up by almost $200,000 — not bad!
Why did my property appreciate so much? Well, it’s that old adage – location, location, location. I live in Denver, Colorado, which currently has one of the hottest housing and job markets in the United States. It has also experienced one of the highest rates of population growth in the U.S., according to the
It has also experienced one of the highest rates of population growth in the U.S., according to the Denver Post. I bought my home for $72,500, and it is currently valued at $219,000 once you add the equity that I built. I’m just fortunate that I didn’t overbuy at that time, and that I trusted my gut.
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