When we bought our first homestead – one acre of land with a 50 year old farm house in Mission, BC — about a 45 minute commute from Mr. Joybilee’s work, we thought we had arrived. We were in our mid 20s with our first baby and making decisions about housing and employment that are typical of young couples. We’d been looking for our first home for about 6 months. We went out with Realtors to view both country homes and city homes. We picked Mission because home prices there were about 20% less than across the river in Abbotsford, and it was still within an hour of my husband’s work, on a good day.
We got a loan from Mr. Joybilee’s parents and made the offer for cash — no subjects. We didn’t need to qualify for a mortgage. We were so excited. Our first home purchase and our first homestead were within our reach. Our first son was about to turn 1 and we’d been renting for 2 years and saving up our down payment. We had made an offer on this particular house earlier in the summer but our offer was rejected. Now we tried again, with a higher offer and no subjects. What could possibly go wrong?
First, before I tell you about the mistakes that we made, I’d like to say that we lived in that house and raised our kids there for 20 years, selling it for more than 5 times the value that we paid. We loved that old house and when we made the decision to sell, it was because we had decided that we wanted more land, not because of any initial mistake that we made in the purchase. It was everything that a young couple with a growing family could want — 5 bedrooms, full basement, wood flooring, high ceilings, and unique heritage. The land was full acre in a zone 7b — coastal rain forest — that allowed for a winter garden. There was ample water, at times too much, and enough open space and sunshine to grow all but the most heat loving crops. The farm was initially a rhubarb farm, and there were still rhubarb plants growing in the manure piles around the acreage. It was a 10 acre farm, but the previous owner had subdivided it and our 1 acre piece with the original farm house was sitting in the middle of the open fields, with one house in the building stage right next door, was what we saw when we first looked at the property. Over the years 3 more houses were built for a total of 4 on the adjacent properties. It was a good place to raise a family, with lots of open space to play and trees to climb, and an open field to grow your own food. But I believe had we done our initial purchase a little differently we would have made a smoother transition into homesteading. So even if you already have your own homestead and have made some of these mistakes in your purchase, its not the end of the world. But avoiding these common mistakes will make the early years of homesteading more peaceful.
If you can avoid the mistakes that we made, you might have a smoother transition. At the very least you’ll know what to watch out for.
1. We were in a hurry and didn’t make a realistic budget.
We had rented for 2 years and saw our rent money going into a black hole rather than making an investment into our future and we were in a hurry to see it build equity for us. What we didn’t realize was that home ownership has its own black hole that renters have no idea about. Property taxes, utility bills, home heating oil, and house maintenance and repairs cost even more than what we were paying at the rental place. We didn’t have a mortgage on our home but rather owed the money to my husband’s parents, as an interest free loan, so we didn’t have that over our heads. However, the monthly bills that we did have were much higher than what we paid for both rent and utilities at our rentals.
The old farm house had no insulation in the walls. The windows were single pane. And the house was drafty and cold, and heated with an old oil burning furnace. The oil tank fill up lasted 6 weeks and cost over $800 to fill — that was in 1983 dollars, or 2 full weeks’ wages.
Our first winter there saw our meager savings dwindle, with increase in expenses. When we were renting, someone else was taking care of maintenance and we didn’t realize how much of a strain that would be on the budget when we had the responsibilities ourselves.
2. We didn’t ask for wise counsel before we made our offer to buy
Although Mr. Joybilee’s parents loaned us the money for our homestead, they didn’t tour the house before we made the offer to purchase. My FIL was a skilled builder and a certified mason and brick layer. He had built additions on to his own home. But we never asked him to have a look at the house and give us his opinion before we bought. It didn’t even occur to us, in our youthful excitement to value his advice. I wish now that we had been in less of a hurry and had asked him to walk through the house with us and sit down with us and talk about it.
As a young family in our mid 20s we didn’t even know what questions we should be asking to make a wise decision.
We also didn’t insist on a certified home inspection before we closed the deal. This was foolish and we definitely should have had the house inspected. We made our offer in the dry August season, and everything looked good to our untrained eye. Our realtor didn’t point out any problems either or even suggest that we should probably have the house inspected as a subject to the sale. The day we took possession of the house, it was pouring rain. It had been raining for a week already and the roof was leaking badly. There were puddles on the floor of the upstairs bedrooms. And the water had pooled on the floor and gone through the ceiling beneath, staining the gyproc of the bedrooms on the main floor of the house.
Our first job, when we arrived to take possession, on September 5th 1984, was to rip out every carpet from the second story — wall to wall carpets. And toss them, dripping wet, out the second story window and onto the grass outside. Then we mopped the solid wood floors and put down buckets to catch the leaks. Within a month we had a friend, who was a roofer, come out and patch the roof. 5 years later, we had to completely redo the roof — not a job for the terrified — right down to its plywood foundation. A house inspector would have foreseen this repair need and advised us on a course of action. The cost of the roof repair was almost 25% of the price we paid for the house and the land initially.
3. We didn’t save some cash beyond the house/land price
The cost of the initial repairs and modifications to the house went on our credit cards. Paint, wall paper, floor finishing, the installation of a woodstove, and its double walled chimney, the new natural gas furnace and natural gas water tank, washing machine, dryer, oven, fridge, freezer, dishwasher — it all added up, and strained our budget. While we lived without some of these appliances for years before we made the purchase, washing dirty diapers in the kitchen sink, by hand, with the January winds blowing through the walls, got old fast. It seemed like every month there was another major repair bill that we weren’t expecting either on the house or on the car. The house was so old — built in 1920 — that almost everything was ready to break when we took possession. And with the extra long commute our vehicles were taxed to the max, too. So for a period of 5 years it seemed like the house and the car took turns breaking down and needing repairs.
If we had put aside an extra $10,000 for major repairs and remodelling, before we moved into house ownership, our budget would have been less strained. We would have been less stressed. And we would have paid less interest to the bank for credit card debt and had more room to make the right choices about our bills and where our money should go. Mr. Joybilee worked a lot of overtime at work and started a part time accounting practice from home in order to meet these exceptional expenses. It was especially stressful not knowing where the money to pay the bills was coming from and if we’d have enough cash with the next pay cheque to pay all our bills. We did. But not knowing from pay cheque to pay cheque was stressful.
4. We didn’t start with a homestead plan
When we bought the land and the acreage we didn’t know what we wanted to do with it. We only knew that we wanted to have a big garden, put in fruit trees and raise our own food. There were a few mature apple, pear, cherry, and hazelnut trees already established on the land. We broke ground for a big garden and collected the fruit in season, and canned and jammed it. We didn’t really have a plan though. We didn’t fence the acreage. Bear, deer, and raccoons came through regularly harvesting our fruit for us. It wasn’t until we’d been there 15 years and got completely out of debt that we started to look at the land as an asset to raise our own food. If we had begun with a comprehensive 5 year, step by step plan to utilize the fruit well, and plant a vegetable garden, we could have saved money from our food budget and put that toward our home maintenance. We also would have eaten healthier and had less health challenges. Ill health was a major reason for moving away from there to our current acreage.
As it was, for 15 years we paid premium taxes on our little piece of land, a homestead within the city limits, but didn’t utilize it as we had intended when we initially made the homestead purchase.
So to recap. Don’t be us.
To be successful when you purchase your first homestead:
1. Go slowly and make a realistic budget that takes into account remodelling and repairs for the initial year or two after you purchase.
2. Get wise counsel and a home inspection before you sign the papers.
3. Save up some cash before you make your purchase to cover repairs and remodelling so that you don’t have to go into debt because of surprises.
4. Go in with a homestead plan — even if you end up revising it a few times, start with some goals so that you know where you are going.