Loads of folks hate home ownership lately. I’m not one of them. Under certain circumstances, a home can be both a place to live and an investment. And I should know; I built the core of my nest egg with live-in flips.
My houses
I buy houses that only a remodeler could love. I think the following are awesome:
- blue toilets
- brown appliances
- peeling yellow vinyl floors
- nasty smells
I like this ugly bathroom:
And I like these ugly cabinets:
I even bought this ugly house:
I like ugly ducks because I can make them beautiful:
And when you make them beautiful, you make lots of money.
Rehabbing ugly spaces isn’t the only way to make money though. If you have the mindset of a dividend investor, house hacking is for you.
Read about my home ownership strategies over at InvestmentZen.
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I am definitely in the home-ownership-rocks camp. I feel like we’re a dying breed. I have 1 rental that I turned from an ugly duckling into the prom queen. When we have a vacancy, the applications roll in. I mean, who doesn’t love a cool powder blue sink. I like to call it vintage. That word makes anything worth more money 😉
Mrs. Mad Money Monster
Owning can make sense for another reason: You want to customize a home that is perfect for your lifestyle.
We bought a dirty-cheap home and spent time and sweat building a fancy kitchen, a yard that is a blast to entertain in (including a huge concrete table that doubles as a regulation ping pong table), a massive and relaxing home office, and great little amenities like heated floors.
When we bought, it was much cheaper than renting in our area. Renovating our home taught us new skills, brought us closer (when we weren’t about to kill each other) and gave us a perfect-fit home we can die in.
Plus, we’ve been able to take the money we save and plow it into rental properties and other investments.
Yeah, great point!
I wish I was as good at carpentry and general home repair as you Mr. 1500! My Dad does all that stuff and you’d think some of it would have rubbed off on me, but nope. Apparently when I was younger I cared more about dumb cars, girls, and music. Never too late to learn I guess…
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I am in the Air Force and my husband and I are in the midst of closing on our first ever home. Some people think we’re crazy, but nearly everyone in the military encourages is because of the advantages of the VA loan.
Most of them also turn their properties into rental homes, even if only for a little while. That is our plan as well. If we have to move, we will rent the home to a military family. I think it’s a smart move, though many in the PF world say otherwise.
I like the strategy a lot! The Mrs. and I have also considered buying rentals targeted towards military families.
Our rental needs a ton of update. It is 110 years old and the last time it was remodeled was the 80s. We’ll move in at some point and I’ll try to do some of the work myself. I’m not the most handy guy in the world, but I’ll have a lot of time. It’ll be a learning process, that’s for sure. It’ll be good for my kid too. He can learn how to do some DIY and see the house hacking process for himself.
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Hey Joe, I love your neck of the woods! Maybe when the time comes, I could do some carpentourism?
I’m 100% with you.
“Ugly” usually means “low price” which generally translates to “great return.”
Same strategy I used to buy my 14 units and it’s worked out very well…
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Yeah, I love 80s homes. They are new enough to not have crazy stuff like know and tube wiring, but old enough to look totally dated. My favorite homes have strong mechanicals and structure; they’re just superficially ugly.
Love the chalk drawings on the final picture. Hi to all. Great job.
I’m also in the home ownership camp. I own 6 rentals plus my primary residence, all are cheaper to own then to rent, and once you have some equity in the property a HELOC can free up your cash. For anyone with a stable job, I would always recommend to own. I love your philosophy on buying ugly, I’ve just never been able to make any of mine end up looking that good!
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I’ve been reading a lot about live-in flips, like MadFientist’s podcast with Coach Carson.
It’s a very interesting idea and I’d like to do it someday. But because I’m traveling for work most of the time, it might not be in my best interests to purchase a home far away and only be able to fix it up slowly every few weeks. I would also have to develop some construction skills too, which I am interested in learning.
I wish I lived close to you so I could volunteer and learn from your skills.
Now we are considering buying a second home. Our first home is rented. we became accidental landlords when we picked up and moved for my job in July. Now, trying to figure out whether we buy or not. I know a lot of PF bloggers are against buying. But if you can work the numbers and buy a house that in monthly terms costs a little bit more or comparable to renting, and you can afford it, why is it so bad?
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I love beaten up houses, and stuff in general, unfortunately I’m much better at demo than I am at rebuilds so I think it’s a skill that the kid who can’t color in the lines are challenged with. Fantastic job with your rebuild, the home looks fantastic!
Mr. 1500, you sure turned that ugly duck into a castle.
I like home ownership as well. I completely understand the logic of those that choose not to own. For sure, it often works in your favor financially to rent. I get a lot of satisfaction from home improvement and repair projects. We still own a home in the US, but have been living in apartments in Asia for the last 7 years. I really, really miss those weekend projects or even the satisfaction of a freshly mowed lawn. When we move back to the US, we plan to continue to own a home, but there may come a time when we are older and aren’t physically able to care for the home that we decide to become renters.
You really did a beautiful job on that house Mr. 1500. Nice job.
The 1000 hours you put into it is probably worth just for the feeling of satisfaction, that you took a piece of crap and made it beautiful.
I like that feeling myself.
Well done Sir.
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Hahahaha, oh the blue toilets! We saw plenty of ugly ducklings during our home search. Unfortunately you have to pick the *right* ugly duckling; many of them also have issues with the bones of the house and can get pretty pricey. We lucked out with the Picky Palace, though! It was a fugly house and we renovated it to suit our needs, and the bones of the house were overall in good shape.
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Fixing up houses is something that I’m not really good at. I’ve gotten much better at repairs than I used to be, but it’s still something I dread.
Unfortunately, that means when I buy rental property, I have to take that into consideration. Whereas, you might opt for the fixer-upper, I have to look at either buying something that’s already in pretty good shape or the cost of hiring someone else to do the work. That hurts the potential for profit – I need to gain a better love for this stuff like you have!! 🙂
— Jim
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We buy ugly houses like you do, but my wife says we just leave them ugly. Lol.
You know I am in the home ownership camp if you use it as like an investment. This is especially great early in your wealth building stages when that compounding has the most time to work it’s magic. And I can also see consciously deciding to buy a home and make it your own later in your wealth building once you reach FIRE as long as you do it with open eyes and recognize the real cost.
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This sounds super cool! I really love turning something that most of the people take advantage into something fancy. kudos!
You really have a great eye for spotting potential beauties and then transforming them. The final result in the picture was awesome!