Carly Hill: If you've been following me for the past four months, you know that we recently chose to sell our home and become renters. This was a confusing choice to many people, and I was told multiple times that we are now throwing our money away. Well, my family isn't the only one who is budgeting well, achieving our financial goals over time, and choosing to rent instead of own. Today's guest shares her story about also choosing to go from owning to renting.
All right, so Haley, having you on is like having a double of myself on in a lot of ways, so I will let you introduce yourself, but I also just want to rattle off how unbelievably similar each of our scenarios are.
That we are both moms, who are financial coaches, who are former teachers, whose husbands recently left their jobs to join our business full time. And on top of that, compared to last time we talked, we now are both renters. We're both renting our homes. So I think the list could probably be even longer if I thought about it. But could you just give us a little intro to yourself and your family and what you guys do and where you're at?
Haley Brown-Woods: Yeah, definitely. My name is Haley Brown-Woods, and I am one half of Price of Avocado Toast. We have a podcast that is where it originally started, our podcast Price of Avocado Toast. And then we also have a financial coaching business that came off of the podcasting brand as well. So we work with like helping millennials get out of debt. Super similar to what you're doing. And I'm a mom. I've got three kids, three and a half and under. I'm a wife. I live in California and yeah, life - we're in a season.
Carly Hill: Yeah. Of, of busy growing so many things, humans and businesses. Exactly. So what we want to focus on today is this idea of choosing to be a renter as a way to actually build wealth, as opposed to what people often think of renting as being something that you have to do if you can't afford to own a home.
So in just like a little snippet, can you give us a synopsis of the last, let's say five years of what's been your living situation, like renting versus owning, moving, all of those kinds of things that led you to where you are today?
Haley Brown-Woods: So in 2017, we bought our primary home, and it is very important to note that we had a lot of money from a wrongful death lawsuit payout that was a $600,000 payout.
So when we bought our house in California in 2017, we put $270,000 down on a $530,000 house. So that's a massive, massive down payment, and we're coming from a way different place of privilege than a lot of people come from. So I do need to note that. We bought our first house, and then while we were paying off a bunch of debt we realized we live in a place that is so expensive, we can barely afford like living let alone child care costs if we were to want to keep having kids and then our mortgage, and we just decided the best thing for us would be to sell our home and relocate somewhere that was a lower cost of living, and then, because we put such a large down payment on our primary home, we would be able to walk with a pretty penny to then finish off paying off the rest of our student loans.
And, it was funny because we actually decided not to do that. We sold our house, we relocated, we decided to rent, and we took the money and instead of putting it towards the rest of our student loans, which were on pause at that time, we decided to put it into real estate investing and see if it could then make us money, which would then end up paying for the student loans down the road.
So we started looking at things from a different perspective, when before it was just like debt payoff, debt payoff, debt payoff, and then all of a sudden it was like, well, maybe. Maybe we could rent and maybe we could buy a house or figure out whatever, whatever that was for us, right? And so we rented for two years and then actually relocated back to the expensive, high cost of living place that we left and we're still renting.
But we now own a rental property in another state. So it's, it's kind of in a up and down and all around scenario. But we've owned a home. We've owned a primary home. We've rented in a couple different places now, and we've also invested in real estate in 2 different states.
Carly Hill: So now that you have been a homeowner of your primary and now you currently rent, what are some of the reasons that led you to choose renting now, even if you like you could have taken the money that you put down on the duplex in Ohio and you could have instead. Bought a primary home like what was as opposed to being forced to rent what actually made you decide like yeah, this is a good option for us. This has more pros than cons or whatever it might be.
Haley Brown-Woods: So one, we live in California. It's really high cost of living. I know people use that as an excuse a lot. But like we're paying $3,800 for our rent, which is a lot of money, right? We are self employed. And if I want to rent that high, and if something happens to my business, I could just downsize and move somewhere in the snap of a fingers.
I could just go somewhere and we could be cozy elsewhere paying way less, right? You can't do that when you own a home. You can't just get up and leave. It costs a lot of money to sell a house. So I didn't want to get locked into a mortgage that was like a $5,000 mortgage that maybe we could pay for right now. But what happens if things don't keep going with the same momentum that they're going right now? Then we would really be stuck and very, very house poor. So we just decided. Well there, there's that, but we also wanna build a house. So I don't wanna just keep buying houses to then sell them to eventually live in the quote unquote like dream home eventually. We just decided we'll rent, we'll figure out where we wanna be, can we afford to continue paying this? And then in hopefully five years or so, we get to build a house or move into something that might even be more expensive, but we're not stuck in something we can't afford now.
Carly Hill: I know for us when we moved over the summer, I've only been like full time self employed coming up on two years now.
And so I knew that moving out of our home that we owned, it's a lot easier to get approved to rent than it is to get approved to buy. And so I think that's another thing that people don't realize is, sure, when you have a W 2 salary, and it's like, I've worked here for seven years and I can prove my income over the past almost decade, then it's like mortgage companies love you. Like they want to find you and they want to bring you in. If you come in and you're like, I've been self-employed for 20 months, they're like, no, thank you. So I knew for us, very similar to what you were describing, we will have more options and it'll be an easier transition for us if we opt into renting, even if it is for one or two years or whatever to be able to have that flexibility and have those options. There's just more, there's a lower bar for being. to rent than there is to be approved to own. And sometimes that is an advantage, right? Like that actually works into your advantage instead of being something that is a disadvantage.
It's like we had the opportunity to jump really quickly from one home to another primarily because we were choosing to rent instead of trying to buy. Like you can't find a house and move into it 14 days later if you want to buy it, but you can if you want to rent it.
Haley Brown-Woods: Yeah. Travis Shelton from the Meaning Over Money podcast once said to us that renting is the ceiling. This is the most I'm gonna pay in this house, and when you own a home, your mortgage is the floor. So that's like, when we were owning our primary residence, the mortgage was $2,200. $2,200 was the baseline of what we were going to pay. What happens when your property taxes come back and they're valued way higher, and then all of a sudden your escrow count shoots through the roof and then your $2,200 is $2,800? You don't have any control over that. So there's that. And then there's also things going wrong in the house, having to fix things. We had to replace a fence when we owned our home. And this is just regular homeowner's maintenance. But we had to replace the fence that was like $3,000.
We had a giant firestorm that knocked over a tree. We had to remove a tree that was like $2,500, I think, to do. So these are things that really, really add up. You're looking at like the base, the floor, and the ceiling. My rent , I will not pay more than $3,800. Now that is a lot of money. However, if I were to own a home right now, the mortgage would be more than that. And that means I'm really tapped out with options when something happens with my HVAC, or the roof, or there's a dead rat underneath the house or something like that, because the reality is, it's not if these things happen, they will, it's when they happen and then you have to scramble. And for us, we just didn't want to be stuck in a situation where we were neglecting our home because we couldn't afford to do the things when they came up.
Carly Hill: So often I hear that, I think it's the idea of the American dream of like, at some point in order to get that freedom, that financial freedom, in order to like, retire and do what you want, you have to own a home.
Like, it's like the primary way to get from A to B. And I think what happens is then we believe that so deeply that we're willing to, in the short term, put all of our extra money towards our home because we're like, well, this is how you build wealth and this is how you establish yourself and this is how you get freedom.
But then if we look back, we're like, all of that extra money went to, like you said, like a fence and then a fridge and then whatever. And it's like, if we actually asked the question, what else could that money have done? Like, what would it have looked like to take that same amount of money and put it into the stock market, put it into a real estate investment instead of a real estate primary home?
Then it's like we start to realize, okay, some of the things that we were told about what it means to be a homeowner just simply aren't true. Maybe they were never true, but maybe they just aren't true anymore. And I think that's something that I really, I believe personally for ourselves, and I want other people to hear like your guys's story and other people's stories of like, there actually are real ways to build financial freedom that don't include living in a home that you own, you know, like you can be a financially free renter.
So I would love to hear from you, then, like, tangent off of that, how do you guys then say, okay, if we don't own our primary home, what are the other mechanisms that we can do to build our financial wealth, build our freedom, you know, things like your, your purchase somewhere else. What kind of things do you do to build wealth that don't include owning your primary home?
Haley Brown-Woods: Well, basically, we've dabbled into real estate investment just a little bit, you know, we honestly have an issue with the housing market, the housing crisis, the renting, slumlord. There's a whole thing out there. We don't want to be homeowners that are owning all the houses in a neighborhood, taking houses from other people like there there can be a big moral dilemma there. And so we've had to figure out like how can we, how can we do this in a way that feels good? And my grandma owned a couple duplexes. My great grandma, that was her retirement. She got, collected her rent. And... That's, that's literally was her money. And I've seen it done well, but I wasn't sure how we could do that ourselves, you know, so we originally invested in, like I said, in the beginning, instead of paying off our student loans, we invested in Michigan, we bought a house for $92,000 and we put, I think, $50,000 down on it.
Again, we had the money from when we sold our primary. And Michigan ended up not working out for us, so we ended up selling that house and moving over to the Ohio market. And we were able to buy a house for $29,000 in cash. Like we just paid for it because we had the money from when we sold our original house and then when we sold the Michigan house. And that house brings us $1,000 a month because we don't have a mortgage on it. Now we will still have to pay the insurance and the property taxes and stuff, but it's so minuscule compared to what we're paying in California that we can just plan for it accordingly and it will work out perfectly.
So for us, now we, now we see, okay, we have $1,000 monthly that we're making from this house. Now we can choose to either put it in a brokerage or work on other stuff. Up until this point, we've just done wealth building to, like, to the extent of maxing out our Roth IRAs every year for the last three years or so.
We've done the math and that's, if we do that forever, we're, we're golden. That's really all we need to do. So if we add this extra layer of diversifying our income streams with real estate and we can bring in an extra thousand dollars a month, that will only go up with time. If we sit on this house for the next 50 years, we will still have at least a thousand dollars coming in monthly while we're in retirement, right? Or we could take that money and then put it into investment. So we're still in the beginning stages of figuring out like, okay. Now how, now we have a $1,000 more monthly, let's not inflate our lives and figure out how to be smart here with this. So yeah, I think we're gonna go the path of like taking that and putting it in brokerages for us and for our kids.
Carly Hill: Yeah, and definitely having a variable income like we do as self employed like it is always a level of comfort to be like, okay, like my business can kind of be on a roller coaster, but this thousand a month is going to be pretty steady to offset some of that. Because it's like some months can be better than you ever saw as a teacher, and then some months can be worse than you saw as a teacher.
And it's like needing to branch out to kind of ride those out is, is really helpful in planning. Like you said, yeah, planning for your future. And then also, I think that too is, that's one reason that I was drawn to the rent side, like you explained with the ceiling versus the floor, is like, at least I can plan around what I know my housing is going to cost. So even if it is a little bit more than a mortgage, our rent that we just started a house compared to what the house that we are closing on this Thursday is $500 more a month.
But when I build my budget out for that, I don't need to do mortgage plus Oh, I wonder what else is going to be going on or what else is going to break or if we're going to have something else that we need to do. As I map out my budget when we're self employed and we have that variable income, I know like this is my rent and that's what I have to pay.
And so for planning purposes, it really does free you up to then lean into trying to grow your business and trying to grow your other things because you're don't feel this need to, like, hold back, like, oh, well, I might need to take care of the yard or I might need to replace the hot water heater. Like I know for us, the same amount of an emergency fund suddenly felt like a lot more money.
We didn't add any to our emergency fund, but being like having that exact same amount and being becoming a renter instead of a homeowner, I was like, wow, like that now feels even more of a cushion than it felt before, because that same exact emergency fund is not responsible for a stove. It's not responsible for an air conditioner. And so it was just like, now this feels like it's even more protection than it was before. Do you, did you feel a little bit of that?
Haley Brown-Woods: Yeah. I was going to say the exact same thing. Like if you have $20,000 in your emergency fund or $10,000 or $5,000, whatever that number is all of a sudden, like when you're running this scenarios, what could be an emergency?
Okay. I might need to fix something on a car, a dental emergency maybe something with my dog. Okay. Do any of those really equal that number? Maybe if they all happen at the same time. But like, it really starts to be less heavy. Because a roof, like all of a sudden if you need to replace a roof, that could be $40,000 in California.
Like, that is a lot of money. And if you're looking at how to manage emergencies without financing things, then you're really going to have to have more money in your emergency fund. But when that is taken off the table, it's like, oh. Maybe you don't need to hoard as much money, exactly what you just said so I definitely resonated with that.
Carly Hill: Yeah, because like you said, out of the list of all the things that everybody could expect at some point, some sort of medical car, pet, you know, all those kind of things, the house is the largest one, right? Like, none of, I could replace a car in cash for cheaper than a roof.
And so it's like none of those other things are anywhere close to as big as the financial liability of owning a home. And so just removing that one thing off of the list suddenly felt like there was just so much. Yeah. Like I said, we didn't add anything to our emergency fund, but the same exact amount just felt like it was even more secure than it was before.
And I think, I don't know, maybe you felt this too. Going from owning a home to renting, I just felt like I was working through so much disillusionment of what I expected it to be like to be a homeowner. I mean, I really expected like, I'm going to feel so wealthy and I'm going to feel so like solid, you know, like this is the pinnacle of this is what you're supposed to do, right?
Like you're supposed to graduate from college and then you're supposed to get a car and get married and have a house and whatever. And we did that. Like we checked that box and then like we lived there for four and a half years. And it was kind of just like it, you know, like the, the value went up a little bit, but we also had to put money into it.
That was, you know, like they kind of took it away. So I feel so much more freedom, like stepping out of that little, I don't, maybe that's not maybe rat race. Isn't the right word, but still stepping out of that expected path and then being like, Oh, actually I'm going to jump over here to being a renter.
Not as like a consolation prize. It's not taking second place and letting all the people who own a home run ahead of me. It's actually like a different race that feels a lot better for us. So did you, I felt like it was because it's such a visible thing, right? Like where you live is something that people know and they can see where you live.
So I felt like having to actually be like to the world, like we are renting this instead of buying. It was like cathartic almost to step out of that and be like, I'm not trying to buy the next biggest house. I just want to live somewhere that works for our family and allows us to do other stuff.
Haley Brown-Woods: A hundred percent. And for us, like, I, I already did it. Like you said, I already checked the boxes. I've already owned a primary home. I don't have that burning desire to go do that because I've already done it. And once you graduate college, you're like, okay. That's done. Once you own a home and you sell it, it's done.
Like, some people are going to be way more drawn to wanting to buy another primary home. But I, it just kind of felt like, whatever. Like, I didn't really have a problem with renting. And I do want to say, like, we moved and rented from my mom. And we rented for whatever she, it was like the market rate at the time.
But she was our landlord. And we walked into the house and I was like, this is just not what I wanted. It doesn't feel cute. I want, like, I want to be able to customize everything. And it honestly took me, like, a couple months when we were first renting after owning our primary to really get comfortable with the fact that like, okay, this, this house is not perfect.
It's not perfect. It might not be how I choose to paint things and everything isn't brand new or whatever, but that's okay. I don't have to pay for anything when it goes wrong. I don't, I also don't need to pour money into something, aka a rental, that's not mine. I, I can just learn to be kind of content with it.
But those feelings of like, when you own your own home, there are a lot of... Feelings of like pride and joy with like, this is mine. I get to customize it to be mine. And then when you go to renting, you might not have that same feeling initially, but it does come back.
Carly Hill: Yeah. And there are ways like, I know that there are accounts to follow on like, how to like do home decor in a rental, you know, like apartment living kind of thing.
And so it's like, you can definitely make like, I know, I remember when we moved into our rental and I was dialoguing about this on Instagram story, somebody made the comment like, well, some people buy because they want their home to be their own or something. And I was like, actually, like, you can make it your own, like, you can make it look the way that you would like it to look.
And there are, you know, just because I'm not, like, knocking down cabinets and replacing flooring and stuff doesn't mean that I can't put our own spin on it. It feels like our own place. It's just, it's just a little different.
Haley Brown-Woods: You can totally, like, I bought a bunch of magnet tiles, but wait, that's not the right word. Oh, mixed tiles. I bought a bunch of mixed tiles to put on the wall because our landlords didn't really want us poking a bunch of holes in the walls. But I do like a bunch of photographs everywhere.
So I bought mixed tiles. I got some photos printed. And they're just like a little adhesive on the wall with a magnet and you put them all up and it's good to go. But that really made it feel homey, that made it feel like it was mine and I got to decorate without damaging the walls.
Carly Hill: So there are people who like, really want to do those kind of projects, like that kind of thing brings them joy. And that's great. I think the bigger thing is just to ask yourself, what are your priorities in life outside of your house? You know, like in the big picture, what are the priorities for our family and what do we want to accomplish? And does owning a home fit into that or not. And if it doesn't, it's okay.
Like it's, it's okay. You know? So for us, I feel like at the stage of life that we're at, as we're trying to like, continue becoming like the business is supporting our family. But I would say like getting to a place where it's like, you can actually take a breath, you know, that is a high priority for us.
And then also just like being able to be flexible with like travel and flexible with our schedule. Renting actually increases our ability to do those things because I'm not worried about the house. I'm not like, you know, i'm not stressed about well If I book a trip for us and then the next week something breaks then what am I supposed to do? So for our personal priorities of building our own business and then being able to be flexible with our time and our schedule, renting actually checks those boxes perfectly, and so we're happy to rent in order to accomplish those things. And it's obviously if people want to own a home like that's great, but just make sure that it fits into the picture of your own family's priorities, not what you just think is expected of you from someone else.
Haley Brown-Woods: A hundred percent, and my mother in law passed away about almost a year ago unexpectedly, and we had moved, we were far away, we're like three hours away from my husband's family. And we realized during that tragedy period of time like we need to be near our people because we were very isolated where we were living. We need to be near our family and our young friends with families and we didn't have that. So we decided to relocate for our hearts and souls and happiness and overall well being, which meant we were gonna go back to somewhere that was extremely expensive. Now, I mentioned our rent is $3,800. We live in a million dollar home because of the just the prices of everything. If they were to sell this they could sell it easily for like the high nines or over a million dollars, and I don't want to buy a million dollar home. That doesn't feel like a good investment for us right now.
I, well, we can't afford a million dollar home, but right now that doesn't feel in alignment with our goals. Our main goals are to live near friends and family and also be able to provide for our kids and be comfortable. And we wouldn't be comfortable if we were owning a home here because our main priority is to be here, we have to really figure out, like, how can we make this work where we can have everything we desire, just not at the exact same time.
Maybe, maybe we do buy a million dollar home down the road, or maybe we choose to rent forever and decide to just buy 10 rental properties in another state because that makes more financial sense long term than dumping a million dollars into our primary. I don't know what that will be for us down the road, but I know that right now it makes so much more sense for us to rent.
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Carly Hill: Now so we want to eventually do the same thing of purchasing a rental. That was, we're not going to do it in the short term, but that was one of the things when we were moving out of the home that we owned, we first considered renting that out. We decided it was better to go ahead and sell it, but then we were like, well, we could use the proceeds from that sale to buy a rental property in general which is on our one to two year horizon.
I would love to hear about your experience becoming a new landlord while renting out your own house. What are the differences or does it impact the way that you feel as a renter now that you've also been on the other side of it?
Haley Brown-Woods: Well, my husband primarily handles all of the real estate investing, like the communication and stuff. But when we first got this house in Ohio, we did get communicated with the renters quite frequently would message us at very strange hours. And that made us feel like, okay, this is, this, this is really hard being out of state already, and then the time zones and all of that. So we actually decided to outsource with a out-of-state property management company because I mean, you can call us at 6 a. m. all you want, but we're not gonna be awake.
So, so, one of the things that I've noticed is like, I'm way more aware of like, when we communicate with our landlords of something, if we need to talk to them about something or bring something up because that was kind of weird, getting 6 a. m. messages and emails and phone calls and just, it felt like overwhelming, but I also want them to be supported, right? That's part of being a good ethical landlord. We want them to be supported, but we can't give them that being in California. That's why we decided to outsource because I, I just can't be answering the phone at 6 am.
Carly Hill: And cleaning up something, you know, something that is 900 miles away from where you are.
Haley Brown-Woods: Yeah. Yeah. That just doesn't work out very well. So I think the biggest thing for us is being aware of our landlord time and, people don't really have business hours when you just have their cell phone number, so we try to keep things at an appropriate hour when we're gonna, like I'm, I'm not gonna message them at 9 p. m.
Carly Hill: Yeah, they're sleeping. Yeah, for sure. I feel like now, like this is our first time renting after having owned a home. And I do feel more conscious of like, Oh, if when I was the homeowner, I would have wanted to know about this, you know, versus like, when I, when we first rented, I did communicate with the landlord, but I also was like, Oh, I don't want to bother them or, or, you know, I don't want to bring this up because it's so small or, you know, whatever it was.
And now I do feel like not that I'm, like, calling him more often, but I just, I feel like I do have the eyes of a homeowner where I'd be like, Oh, but if he took care of this now, it would be so much less of a problem than if it broke later or whatever. So I do, and he knows, our landlord knows that we were recently homeowners too.
So I almost feel like I have this, like, camaraderie of, like, Hey, like, this is what's going on in the house. And, you know, if this was my house, I would want this fixed in this way. So I wanted to let you know. So that's kind of been a cool experience for us of where before when I was only a renter and hadn't owned a home, I just felt this dynamic of like, Oh, I don't want them to be mad at me.
You know, I don't want to, I don't want to make them upset by telling them that I think something isn't working right or whatever. And now I do feel a little more, a little more emboldened to just be like, Hey, I'm not trying to complain about the house, but I also know that you value the house staying in working order and stuff. So I think that is that's been a cool experience for us too.
This is something people ask me often as I talk about renters. Do you ever see yourself choosing to buy a primary home again? Or are you kind of like, Hey, we like we're going to rent indefinitely?
Haley Brown-Woods: I think we will definitely buy again. I want to build though, and I keep getting people who are like, "Yeah, right. You can't build. That's gonna cost so much money." And I'm like, but but you wouldn't bat an eye if I dropped a million dollars on a house tomorrow. If I, if I want to build it the way that I want to build it, like it doesn't have to be a McMansion. So I do think that we will own a primary house eventually, and I think that we'll end up building it. I think it will just be some time, though. And, it's really cool, because we can stay here for 5 years, 10 years, whatever, as long as they will allow us, and then decide to do that down the road if we want.
Like, it doesn't have to be tomorrow, and we have no rush, and it's just kind of cool being in a place renting. That is comfortable, comfortable. I see us in this place for like at least five years. Which, I don't know that I actually saw myself five years in my own primary, which is funny.
Carly Hill: Because I on an episode I talked to Tyler Moore, who's Tidy Dad who lives in New York, and he talked about the idea of a starter home that like he was like, "What does that even mean?"
Like when we say that someone buys a home and we call it a starter home, basically telling them like, Oh, well, You can only live there for two or three years because even though like you've accomplished this very large task of buying a home now we're expecting you to already be planning on what the next bigger home is that you're going to buy. And so being able to like not have that expectation and just be like, Oh, what if I rented for seven years?
Like, it's actually not going to take away from our overall goals. And I think that is the big thing. And you know, like you, your family has these longterm goals that are more than just about the house that you live in. So then those help drive the decisions you make about where you're going to live, because you can actually ask, does it fit into my big goals or not?
I feel like when people don't have those big, long term goals to be able to really evaluate the things that they're doing, then you can more easily lean into what people expect you to do of just because I don't have that specific longterm vision, I'm just expected to buy a house.
So I'm going to go ahead and do that without ever asking if it does or doesn't fit into. So there's so much freedom in renting that I think is the opposite of what people think of like renting is you know, throwing your money away. Have you heard that renting is throwing your money away?
Haley Brown-Woods: Yeah, why would you want to pay someone else's mortgage? Why would you sell your house to rent? I've heard it all it's not throwing money away at all. Like, we live in a really nice house that we wouldn't be able to live in if we were owning a home. So I feel like we get to have more of what we want in that vision for like what's best for us right now and our family.
You know, I've got three young kids. This is a great location, great school district. Everything checks the boxes, and that wouldn't necessarily be the case if we owned a home right now. I don't think we'd be living in this area if we owned a home right now. And... Not to say that we won't own a home in this area in the future, but just right now, just, I'm okay paying the mortgage. That's cool.
Carly Hill: What do you, I'm sure you have this in your, with your coaching clients. What do you say to people who are so adamant about like, they need to buy a home? Like it's like their top priority and they're like, we have to buy a home. We're trying to save a down payment. What are some of the things that you're like, Hey, maybe you should get these ducks in a row first because jumping into buying a home is not the end all be all.
What do you walk someone through when they just are locked in on the idea of becoming a homeowner?
Haley Brown-Woods: You need to have savings, like a beefy emergency fund before you buy a home, in my opinion. I don't think draining your savings and your emergency fund for a down payment on a home is a wise choice at all.
I think that's absolutely terrifying. And when you do that, you're playing with fire, because it's only a matter of time until something happens. And then you're in a situation where you have to acquire debt to manage something that you already went into debt to get. So it starts to spiral. That's the biggest thing, but also like when people want to buy a home and that's the biggest thing they want.
I really pull the numbers with them. Like, what makes sense? What happens when one of you loses a job? What happens if one of you dies at a young age? I don't mean to be so morbid, but like, we have to look like at the whole picture. Can you afford to live in this house right now? Maybe right now, but what about five years from now?
What would you do if you had to sell? How would you pay for it? Like there's That's a lot of factors that people don't consider and selling a home is very expensive. Very expensive. We, we paid real estate agents over 30, 000 to sell our primary home and that's, that's They deserve to be paid, for sure, but that was really sad.
At the end of the day, I was like, oh, okay, that's, that is why I'm not going to go buy another house and live in it for five years and then move out. Because I don't want to just spend money to sell my house. And people don't consider that. Like, you have to look at the long term picture. How long do you see yourself here?
Are you buying this home just to check a box? Or are you buying this home because you plan to be here for the next ten years or so? Because that's going to really weigh heavily when you go to sell the house and you have to pay out the real estate agents. Because I don't know if this is common knowledge because I definitely did not know this, but the people who are selling the home are the ones that pay the real estate agents.
Carly Hill: Both people's agents, yeah.
Haley Brown-Woods: When you buy a home, you don't pay the agent. It's the seller that pays both agents, the seller and the buyer. And that can be a lot of money pending how much you're selling that house for.
Carly Hill: I 100 percent agree with the emergency fund thing. I think the thing that I've said before is there is no rule that something is not allowed to break in the first week that you live there. So it's like you could put your down payment in. And I think in our minds, we're like, Oh, well, since we just moved in, everything's in working order, and it's going to be like at least a month before something is wrong or whatever. It's like day one, something could break and it's like, your name is on the deed. This is your responsibility now. So I think I, I completely agree with not draining savings in order to put a down payment on. Because I do see that a lot where people are so desperate to buy a home that they do things that they otherwise wouldn't do. Like you wouldn't drain your savings to buy something else, but I think we're so convinced that it is one of the best investment vehicles, which like it's not that we're willing to do risky things that we wouldn't otherwise do in the name of becoming a homeowner.
Haley Brown-Woods: Yeah, you're not making money on your primary. Therefore, I don't really think it's much of an investment personally. Like, I mean, yes, long term, if you stay in that house into retirement, yeah, you don't have a home payment. So that, that is an investment if you could look at it that way, but it's not something worth pouring every penny you have into.
Carly Hill: Yeah, I would call it like a marginal investment. Like it's like you can earn a little bit of money, but if that marginal investment takes away your ability to actually invest in larger things like if you had to choose between owning a home and being able to contribute to your 401k and Roth IRA. Like, please choose the Roth IRA and the, and the 401k. But I, I think we just have it up on a pedestal so much that not only is it the right thing to do, but that it's also going to be such a good investment that it's like, if owning your home prevents you from contributing to your Roth IRA, it's okay because the home is an investment. And it's like not in the same way, not at all in the same category. And I think that happens a lot, that house poor idea of like, we put all of our eggs into this basket of this house and now we're not able to do X, Y, and Z, whether it is an investment or even just having fun. And it's like that, that takes away from those other priorities a lot, which, which just makes it challenging.
Cause then it's like, once people realize that they're often locked into the home, right? Like they realize it, but it's like, well, you. You're in the home, so we gotta possibly make some bigger decisions about it which is a tough, tough place to be.
Haley Brown-Woods: I think the generations before us also, like, they all had homes. It's just a thing that you do. And unfortunately, due to stagnant wages and skyrocketing house prices, It's not the same as it was for our parents and grandparents, and that's okay. But when you have these people, aka your family, parents and grandparents, telling you that the next thing you need to do after you graduate college, you get married, is to buy a house, it's, it's hard to shy away from that sometimes when it's such a loud pressure.
But there are a lot of factors that need to be considered when you go to buy a home. That's a massive, that's the most expensive thing you will ever buy. Yeah. In your life, no matter what state you live in.
Carly Hill: Yeah, you were mentioning the, the real estate, like how much you pay an agent to do those things. I think what happens is that people get stars in their eyes when they see, Oh, so and so bought a house for $120,000 and sold it for $200,000. They made $80,000.
That, that's the math that we do. It's like, that is not the math of buying a home. That $80,000 is assuming that, you never fixed anything, you don't pay a single real estate agent, you didn't pay anything to mortgage interest. Like all those things.
It's like that person absolutely did not profit $80,000. Like once they take that. You know, bought it for 120, sold it for 200, right away the real estate agent is probably between the two of them is probably $15,000. So that goes from an $80,000 profit to a 65. And then you have to think about while you lived there on top of the mortgage and interest in taxes, did you have to do a major repair or replacement?
Well, we need to subtract that cost off of it because that eats into what you would consider to be your true profit. And as soon as we start subtracting some of those things, then it's like. Oh, I didn't make $80,000 in five years. I made $19,000. If I, you know, it becomes so small.
Haley Brown-Woods: Okay. So I'm, I'm doing this mental math right now.
We bought our house, our primary for $530,000. Four years later, we sold it for $588,000. That's a $58,000 profit, but not really at all, because we paid the real estate agent $30,000. So then that's $28,000 that we actually made on the house, but that doesn't include anything that we put into the house. Which was, we did a $20,000 bathroom renovation. There you go. There you go. So immediately it's like, yeah. You don't really make much money.
Carly Hill: Right, when you do the full math of it, at best, like we hope to break even, is really what it ends up being. Which is totally different than a real estate investment property is completely different.
It actually can give you some of those returns that are more along the lines of like the stock market kind of thing. But that's just not going to happen in the primary home. You are, you yourself are paying the mortgage and you're paying all the repairs and stuff. It's just a completely different, completely different math equation.
Not only have you done these things for yourself, but you also coach people through these all the time. So for people listening, what are some of the misconceptions about buying a home versus renting that you would hope that you can break through?
And maybe not, like you and I are not here to convince everyone to rent. We're just here to convince everyone to really ask the good questions first. So what are some of those misconceptions about the difference between homeowner and renter that you would hope people out there listening would take some time to ask themselves?
Haley Brown-Woods: I think the biggest misconception is that you can't afford to buy a home, because though you may not be able to afford a home where you live, aka in California, you could probably buy a house somewhere else. And that's where your wheels can start spinning with different opportunities and options. Maybe you buy a home that you don't live in.
Maybe that's how you become a homeowner. And it's done as a real estate investment. Maybe it just looks a little different than you originally thought. But if you want to buy a home, you can make it happen. People can do these things. I think that's the biggest misconception.
And then also kind of what we already talked about. Paying someone else's mortgage, like you're just wasting money, you're throwing it away. You're not, you're not wasting money at all. This is, it's okay to rent. A lot of people rent and there's nothing wrong with that. I don't think you're throwing money. I personally don't think we're throwing our money away. I think that this provides more options for us.
Carly Hill: Yeah, same, same, same, same. I, I feel like doors open and I felt so much less stressed as we moved from homeowner to renter and, and I hope other people feel the same way. Haley, where can people find you and also what are you up to? What can they see you doing if they jump into your podcast, Instagram, coaching, whatever?
Haley Brown-Woods: Definitely. You can find us on social media at Price of Avocado Toast and our podcast Price of Avocado Toast is available wherever you're listening to the Debt Free Mom podcast today. And you can just find us talking about debt payoff, budgeting, marriage, having kids, we're, we're just at this such, it's like a big transitional stage of life.
I feel like we're kind of doing a whole bunch of things right now, but my husband joined us and we both are financial coaches full time, which is super cool. And we, we help people primarily with their debt payoff. Those, that's like the biggest thing that we do. We've helped people pay off over a million dollars.
Carly Hill: If you didn't bring it up, I was going to ask you, what's the big thing you just did?
Haley Brown-Woods: Which is so cool. That's phenomenal.
Carly Hill: Yeah. Thank you. That is amazing. A million dollars of debt paid off among your clients, and I love that you're tracking that too so that they can be like, wow, I'm really a part of something so big.
Yeah. Yeah. Because that's a lot. That is. Oh my gosh. That's huge. That's as much as the house you're living in right now.
Haley Brown-Woods: Exactly.
Carly Hill: All right. Well, thanks Haley for taking time to come and share about this. Selfishly, one of my main reasons for having you on was to just show other people that there are lots of people choosing renting over homeowner, not just crazy me and my family. Like there are actually people making financial strides, just like your family is choosing a life that is created around the goals that they have. And for so many of us, it includes renting.
Haley Brown-Woods: I don't want people carrying guilt or shame or feeling less than because they are choosing to rent or because they have never owned a home before and they feel like that's not an option for them. There's nothing wrong with renting. Yeah. And you're just as... Just as awesome.
Today, we're adding a new segment to the podcast and I have a cohost. My husband, Kyle is here with me. He edits and produces the episodes each week. And today he's going to join me for our very first edition of Not Worth Your Money.
I'm going to write a theme song for this, but...
We don't have a jingle for this yet, but we will. So that was, that was edition one.
In this short segment, we're each going to share a purchase that we believe is not worth your money and see how the other person reacts.
I've got one.
I'm ready. I'm going to go first. Okay. All right. Not worth your money: dryer sheets.
Yeah, definitely not worth your money. Um, well, have we ever?
So here's the story. Here's why I thought of this. I used them because I thought that was what you had to do for laundry. And my mom used them, like all of those things. And then I ran out one time and I just didn't buy any more and literally nothing bad happened. So I just stopped buying them. I don't even understand what they do when I thought about it. And so I just don't think they're worth your money.
Also, we haven't ever once separated colors from white
Yeah, that's not related to your money, but we have never once sorted whites and colors, and again, nothing bad has happened. I'm sure I've lost like a random t-shirt along the way to a pink sock or something, but that's worth the trade-off of never going through sorting. Yeah. Yeah, definitely not, not. Okay. Alright. That's pure marketing. We're in agreement.
So first, I want you to guess. The next available tickets for a Taylor Swift concert in the United States. I found
the date or the price?
So the next available tickets that we could go to. We live in Central Illinois. The closest one that is coming back to the United States is in November of next year. Okay. She's playing in Indianapolis at Lucas Oil Stadium.
Okay.
I found the absolute cheapest ticket, which is actually like, it's like upper bowl behind the stage. Yeah. I have the price of the ticket. Before I even tell you the price, would you buy that ticket? Would you go see her in concert?
If it was behind the stage? No.
Where would you have to sit? I could look this up too. Where would you have to sit in order for it to be worth the experience of going?
I would be fine with nosebleeds if I was actually facing the stage.
Okay. Alright. So the cheapest ticket that I found is $993 before fees. Let's say that that's a good seat that you would actually like be able to see her. Is that, is that worth it to you? Would you go?
I am intrigued. Um, but. But no, I almost think I wouldn't on principle because it frustrates me how much people are spending when they could be doing other things with their money with that. So like on principle, I would probably choose not to, but like in my secret heart of hearts, I would be interested.
Yeah. So for me, I mean, I'm, that's not my kind of music, so that's but even like a similar artist. For all of the other millennials out there listening to this, Blink 182 is doing a stadium tour right now.
Okay. Here's the thing. I'm not, I, I like listening to Taylor Swift's music. I am not a Swiftie. I would not call myself that. I can't like explain what all the albums are, what the eras are or whatever. What is intriguing to me is that I have seen people who I would not expect to be interested at all attend one of these Eras Tours and say that it was hands down the best form of entertainment that they've ever seen, not just a concert. So that is, that's the intriguing part to me is like, it's like the FOMO of like, is it the best thing? And am I going to miss it? More so than, than viewing it as just strictly a concert.
In contrast, there's a standup comedian who I saw did a bit that said hardcore music has ruined all other forms of music to me, because for $12 I can go to a concert. I can get up on stage. I can sing part of the song. I can jump off the highest point in the venue and I can karate kick everyone there consequence free. And that's that that is $12 well spent I believe.
I would spend 12 times $12 to avoid that situation.
And, uh, that's the key to a successful marriage right there. It's just similar tastes in music.
Watching your spouse do something that looks so terrifying to you.
Yeah. And that's the first segment of Not Worth Your Money. So let us know Instagram stories, comments if, if dryer sheets and Taylor Swift are worth your money or not.
Thanks for listening to the Debt Free Mom Podcast. If you want to join me as a guest on the show, go to dfmpodcast.com. The Debt Free Mom Podcast is hosted by me, Carly Hill, and is produced, edited, and mixed by Kyle Hill. Music for this episode was written by Kyle Hill. Hit subscribe wherever you're listening to join in with every new episode as we grow our confidence and contentment in our personal finances. I'll edit this podcast to the best of my ability. But this is what I work with.
