My first house – Buying in a Boomtown
By summer 2013 I was working in the construction industry for two and a half years. I also worked exclusively in northern Alberta in the most booming town in all of Canada, Fort McMurray. There’s a lot criticism about Fort McMurray both good and bad, but it has been nothing but good to me up to this point.
I was in the region for a university work-term during the economic meltdown in 2008. I saw billions of dollars’ worth of projects shutdown almost instantly. But that was 5 years earlier and the town’s housing situation was still recovering. Surely, it couldn’t drop more right?
Since I was not placed in a work camp, I was receiving a subsistence called a Living-out Allowance, at the time this was an extremely generous sum. The town was full of overpriced rentals (1 bedroom apartments at $1500-2000/month was not uncommon) so a lot of people took advantage of this and rented out the extra rooms in their homes almost like boarding houses, just no locks on the bedroom doors. This is how I lived for the 2 years previous to build up a good down payment for my first house.
Seeing as how I was on a major project and anchored into a site close to town, where they were starting to eliminate expensive camp rooms for the workers, I decided to start looking at 2 bedroom condos and town homes thinking I could rent the extra room or two (rooms in that area of town were renting for ~$1000/month).
My budget for this purchase was $350,000. The intention was to be paying about $1000/month once I rented the other bedroom to keep my payments close to what they were before ownership. I wasn’t going into this thinking I would make a quick buck on a booming housing market(although that was still something I hoped for). I just wanted to keep some of the money in the form of equity as opposed to paying another person’s mortgage.
I have always been interested in real estate and usually check out the MLS.ca website at least once a week to look at all of the cities I’ve lived in. It gives me an idea on how the markets are going in those cities but mostly because I’m a curious person and want to see what the inside of a lot of homes look like. So I had a pretty good idea on what I was interested in purchasing before I went looking for a realtor.
After about a month of working with a realtor I settled on the ugliest 2 bed/2 bath townhouse I could find. It was a great deal in my opinion; the price was almost the same as when it was originally built in 2006. The previous owners bought it in Aug 2008, right before the crash, for over $400,000. They painted the kitchen walls lime green, one bedroom had a hot pink wall and disgusting wallpaper throughout. With the recovering housing market and the less than favorable décor the house was on the market for almost two years. I managed to get it for $20,000 cheaper than neighboring comparables and the owners ended up with a $90,000 loss (ouch).
I took possession just after my birthday in October 2013 so really I bought myself a house for my 29th birthday. I’m some nice to me! 😀 (or am I?) It needed a lot of paint and the wall paper stripped, so I picked up supplies and did the work myself for an hour or two each night after work. Within a few weeks, I had it painted, furnished and looking good. For less than a grand and a few dozen hours of work, I almost instantly increased the value $10,000(based on neighboring sales) just making a good first impression.