The Anti Doctor House

Categories Personal Finance

This is a fun post for me. I will document how I bought my personal home. I have been reading blog posts dealing with issues of the Doctor House. This was my journey.

The Homes

  1. House 1- The old house my husband bought before we married.
  2. House 2- A duplex purchased with my parents.
  3. House 3- Our current multiplex.

Shortly before we married, my dear husband had the grand idea of buying an old house on a large plot of land. It was only liveable on one level with one bathroom. It was not till much later that I learned his real plan was to build a large new house on the lot. Unfortunately for him, he could barely afford the land with just the old house on it. I recall vividly thinking to myself “no biggie, he’s a doctor for Pete’s sake, he can take care of it.”

Note to dum dum younger self. If you marry someone, you marry their debt. Don’t delude yourself.

I always had plans to help my parents buy closer into the city. They lived about an hour away at the time. They only had half the payment for a good home in town. I had planned to foot the other half.

Well things did not go well for my husband with that house. It was a money pit and we had to hold it for about 7 years. Thankfully we rented it out and let the renters carry the costs.

This delayed my ability to buy into my half of a house with my parents. But ten years after med school graduation, I paid cash for my half of the duplex. You heard it correctly, I paid cash for my first home.

When I finally helped my husband sell the old house, I found the lovely multiplex we currently live in. It was in a much nicer neighbourhood. We could not really afford to live there at the time. But I told him to put the down payment and we rented out the multiplex for about a decade.

Our living expenses were very low while living in the duplex and it was effortless to save. That is what happens when one of the largest expenses is nixed. We were able to save enough to pay off the urban multiplex after about a decade.

Certain things stand out for me. Renting the multiplex out for ten years allowed the use of OPM and OPT. That is OPM other people’s money (the bank) and OPT other people’s time.(the renters). I have NEVER bought too big a house. It had to do with buying in high cost of living areas but also due to the fact I dislike the hassle of more room than I needed.

I like being efficient and I realized that the most expensive part of real estate was the cost of the land. Thus I focused on real estate in great locations and the house was more an afterthought. I rarely got distracted by a fancy house. I always saw new homes for their depreciating aspect. I steer clear away from fancy condominiums since I valued the land and the optionality I would have with owning my own piece.

There is an explosion of tiny house living and laneway/ coach houses. I see a prosperous future of multigenerational living in a good location. My sharing values run deep. I will gladly share the land with my aging parents and my growing children. If I was ever to rebuild my older home, it would be guided by the needs of my evolving family rather than the dictums of “house porn”.

I view my home mainly as a consumptive item versus an investment in the truest sense of the definition. Investments pay me cash, not the other way around. Canadian real estate has enjoyed a bull market the past decade. But a home is something that one keeps paying money into even when it is paid off.

However, there is more to life than cash flow and thus I try to use my assets to do more than improve my bottom line.

I primarily use my home for consumption smoothing. It helps everyone live within their means a little easier. And I don’t have an issue with debt. But I use debt as a tool. Just don’t use the tool AGAINST yourself.

We still have the original half duplex with my parents. We use it mainly for friends and family to stay in when they visit for longer periods. My kids have expressed plans that one of them will move back to live in that unit when my parents become too old to live independently. Their thinking is that their grandparents were always around helping when they were younger. So why would they not do the same for them when they need it?

Think long and hard when it comes to real estate. Like think really long term. Real estate has ginormous closing costs. The realtor fees, transfer taxes, lawyer fees to name just a few. Real estate transactions have a litany of middle men involved. My multiplex will make up my Personal residence exemption and will be passed on tax free to one of my children. And they already know the plan.

And what would I recommend to a young professional? Do NOT buy a house too early. When you are young, your human capital is the highest. Who wants an albatross around the neck tying you to a specific area?

That was how I saved us with that house my husband bought which was too expensive. I rented it out to tenants once I saw the numbers. Then we rented a much smaller and cheaper place closer to our work. We also did not have yard work or house maintenance to deal with. Score! Instead, we worked lots, played lots and saved lots. And I would never have wanted to do it any other way.

6 thoughts on “The Anti Doctor House

  1. Your real estate journey is a great one and even though there may have been a hiccup along the way you dealt with it in the best possible way.

    I did not follow the right path with real estate and bought not one but new homes during my residency but got lucky that my final home gave me the opportunity to use geoarbitrage fully and jumpstart my financial wealth path because of it.

    Although when I bought this forever home it was the most expensive thing I ever purchased (still is) it really was well within my means to get it and a reason I was able to fully pay it off in under a decade

    1. Hey XRV!

      The fact that you could pay off your house in under a decade shows that you bought within your means. We know so many who have a hard time affording their home even with a 25 year mortgage!!

  2. Lovely story!! I am curious what you think about the proposed/ potential inheritance tax.

    Hmm mention of laneway house, are you in the metro Vancouver area? 🙂

    That was my dream, I wanted to buy a multiplex and live in one portion of it and rent out the rest. I also considered buying a duplex but I got my apartment instead. With the duplex I would have been stretched thin, but if I had gotten it my net worth would be much higher now haha!

    We are doing multigenerational living too- it has always been the plan that my MIL would live in the basement but she didn’t like anything we saw when we were looking at real estate (we went to many many different homes to look). She wanted to stay in her area/neighbourhood so we ended up deciding to build on her land.

    1. Hey GYM!

      I’ve wanted to live multigenerational since I was 15 years old living on the East Coast. I always used to think “who needs all that space?” I was probably an odd kid but since it was my job to clean the house maybe I was wisely onto something.

      I do not worry about inheritance taxes. We plan on giving almost all of it away while we are alive. We make plans so that our kids and extended family will be taken care of. We are certainly people who enjoy seeing our monies used to make life easier for those we care about.

      You are fortunate that your MIL will allow you guys to build on her land. It is a smart way to get into the land market in HCOL areas like Vancouver. She is smart since the largest issue with most seniors is isolation and wishing family would visit. My kids care deeply about their grandparents and that is worth more than any amount of monetary wealth in my opinion.

      That’s sort of the problem with families that have too much money. They start to rely on money rather than one another. I think it’s a bad trade. No matter how much wealth we have, it’s family works together first and we only purchase the solution after exhausting all DIY/ sharing ones.

  3. Sounds like your multiplex has been working out really well for you and your family. That’s great!

    Renting out your multiplex for a decade was a smart strategy. Giving tenants a good place to live while making money is a win-win situation for both parties. That’s why I like real estate investing!

    From what I have gathered from your blogging, I’m guessing that your tenants loved having you and your husband as landlords?

    1. Hey DN!!

      Welcome back! We always rented to tenants who took better care of the place than we did. Seriously.

      We look at our tenants almost as employees and thus respected them enough to leave them alone. Most of them were very solid and trustworthy people anyhow.

      With one tenant we rarely raised the rent but he did almost all the maintenance himself. He was a university prof and a wonderful guy. We missed seeing him leave after 7 years when he got married.

Leave a Reply