Financial Freedom Sloth

achieving financial freedom one lazy step at a time

Our house (not following the FIRE rules)

Everybody seems to be writing about their housing past and present and it is something I had planned to write about as well. Mainly because our situation is 180 degrees opposed to what most people aiming for early retirement would do. Where most talk about future downsizing and living small we went big! Really big!

But first a little bit of history.

Up until we bought this house (now 8 years ago) I have always rented. The girlfriend however bought a small house in Ghent about twenty years ago. Total purchasing price after renovating the roof: 57.000 euro. That gave a mortgage of a grand total of 350 euro a month. So when we got together I moved in with here. I started paying rent with a little twist. We agreed on a rent of 200 euro a month (far cheaper than my previous place!) but since her house still needed some renovations I paid it in lump sums. One year of rent gave her 2.400 euro which she then used to make some improvements to the place (often executed by me and my dad). Up until this point we were following the FIRE rules: living small and cheap.

After a few years we wanted to move, the neighborhood we lived in was not improving (actually getting worse, a clear sign being when our Turkish neighbors starting moving out due to the rising number of East-European Roma moving in). The girlfriend had always wanted a big garden with room for animals. So we started looking. I had one iron rule: I would not sell any of my investments to fund the purchase or the renovations. in practice this meant our budget was limited to what we could borrow from the bank and even there we were conservative: we wanted to be sure we could pay our mortgage even if one of us lost his job. This limited our purchase price even more. So we had a self imposed limited budget but wanted lots of land. To reconcile these two facts we had to resort to geographic arbitrage.

Moving to the countryside

We first looked around Ghent but property price had really skyrocketed. We then looked closer to my parents but there too it was more land = more money. We finally ended near Tienen (it has the same time commuting to Brussels than Ghent) where land is/was still affordable. We landed on an old farm sitting on 2 800 m² of land. In all honesty, we bought it for the garden because even back then we knew the house was too big for just the two of us.

How big? Around 350 m² for the house alone. Not counting a 25 m² utility room (still needs to be renovated) and not counting the numerous outbuildings we have no idea what to do with (the cat does seem to like them, so there is that). We have the barn (there are parts of the barn attic the girlfriend has not been, ever), the stable, the garage, the work shed and then, because we ran out of names, something we call the green gate because the door is green and ‘the shed next to the work shed’ is just too damn long. Hell, ‘the shed with the green gate’ was too long so it just became ‘the green gate’. It is not uncommon for us to have the following conversation:

Do you know where item X is, I cannot find it in the utility room?

I probably put it in the barn with the garden equipment or the work shed.

*going outside, checking it, coming back inside*

Nope, I probably put it in the green gate.

*takes the key, goes back outside*

5 minutes later: damn it is not there either, where the hell is it?

No idea, it will turn up eventually

2 months later: hey I found item X!!

You did! Where was it?

In the green house!

The green house when it was nice and tidy

We have 4 bedrooms for just the two of us. And that is not counting the 100 m² attic (still needs to be renovated) which I will probably convert into a home fitness/cinema room eventually because well, more bedrooms would be futile and what else should we do with it?

We might, might, try Airbnb in the future but at the moment neither us is big on having strangers in the house (we have done workaway in the past).

So while it certainly did add some years to our early retirement date (had we stayed in Ghent i would probably be done about now) we were pretty smart how we went about it.

Being stupid, the smart way

Even though buying a way too big house that needed extensive renovation derailled our retirement date with several years we did do it a pretty smart way.

First off: we sticked to our budget. Purchasing prize was 185.000 euro. Or as one bank office manager said: you got the garden for free (we saw it the other way around: we paid for the garden and got the house for free).

We borrowed at a low rate: 3,6% and then refinanced it down to 2,6%. And I am currently looking to go even lower than that.

The girlfriend made a very, very nice profit on the sale of her house in Ghent. About half of that was invested (GBL for those curious), jump starting her stash. The other half was used for renovating the house.

We renovated while already living in the house (the three months our kitchen and bathroom got renovated were no fun). Hell we are still renovating! We have got about 5 years and another 50.000 euro to go.

pretty happy with our living room since it looked like this at a certain stage

We will probably end up putting 350.000 euro into the house (purchasing price + all renovations). A sum we did not want to borrow. By spreading the renovations over 10+ years we limited our borrowing costs. And can actually afford the house!

We both like watching house shows and honestly, I have seen a lot of properties being sold for 350.000 or more where the house is so, so uninspiring average. And I don’t do average very well. This house is many things but average it is not.

For our quality of living it has been a big change. Even with all the renovations being done.

We are both people who need space to be alone. We got that in spades.

It is also a lot nicer where we live now. One year we drove to Croatia to go on holiday. Two weeks later we drove back home. The holiday feeling persisted right up to the moment we drove into our neighborhood. This drop in holiday joy, just by driving into our street really reaffirmed we needed to move.

Our current place is the complete opposite: this summer I went to our local bakery to get some bread. The sun was shining, I was driving my Vespa down some nice country road and I actually felt like I was on holiday! In Ghent we were probably the richest people in the street. Now I doubt we make it into the top half. And it may not be politically correct in these times to say but wealthier neighborhoods in general means nicer neighborhoods.

It all comes down to happiness. Although Ghent is a great town we were not happy living where we lived then and we are pretty happy living where we live now. Yes, this means working some extra years but in this case it is a sacrifice we are both more than willing to make.

13 Comments

  1. Nice to see you chiming in on the whole housing history trend 😉 But 350m2, I mean really?! (I do get the big yard!). When we were living in the 280m2, we quite literally did not use the living room and 3 other rooms in the house, for 98% of the time. But you still have to pay for it in terms taxes, maintenance & heating (which adds up in Canada). But with a kid and dog, the cleaning was the final straw……

    I think you might be seriously underestimating the financial liability you are having with the place. Not even mentioning the relatively low costs for renovations you have budgeted (but you have no kids and doing a lot of the work yourself, that helps a lot). The maintenance of this place must be humungous! You will literally never be done with it (speaking from experience with several old properties!).

    That being said, I’m not thinking you are making a mistake persé. If you do a job well done on the renovations, you could create a lot of value in the house. At the end of the day, when you are old and tired of taking care of the place + garden, you could make a killing when selling it. Providing you with tons of extra cash during “retirement”, which is useful when you would start renting again.

    • Taxes: property taxes have not been update since the 70’s so if you buy an old building you get taxes on the old value of the house and farms back then got an even lower rate. All of this means we pay 380 euro in taxes on the property (which is less than our car insurance ..)
      Maintenance: when FIRE the entire house will be re-done so maintenance will be low for the next 30 years. The outbuildings, well current plan is to slowly let hem deteriorate since we do not need them anyway … But yes, in a nutshell, we will never be done with this place, good thing i’ll have plenty of time when fired …
      Cleaning the place: meh, people clean to often so it is manageable at our level of cleaning.
      The garden: I am more of a hands-off gardener, keeping the weeds in check (more or less) and that’s it. We call it a ‘wild garden’
      About creating value: I already know the spot were they can bury me in the garden so the value will be for whomever godchild of ours is decent with money. i am an only child so when I am old and tired I will inherited lock, stock and barrel from my parents as well (and I am already managing their investments so i know the returns are decent there, give me another 20 years with their portfolio and …)

    • Forgot to put it in the post but all of the 2800m can actually be build on. Doesn’t matter for now, but 50 years from now it could be a good thing (a very good thing) for whoever inherits it …

  2. I did not realize you did that many renovation works. The picture of the living room says it all.

    With the space you have, you might consider a separate entrance to unlock the upper floor and rent it out on airbnb. That way, they are in your house and you do not see them. Or convert a barn or shed… Link this to a cleaning service and a box to deliver the key…

    Or have a FIRE BBQ in the garden… Just an idea… 😌😎

    • When we are done we will have kept the walls and on ceiling, that is it. Actually up until this point (living here 8 years now) we have never had the entire house available (always one part being renovated …) So only when we are completely done we will start to realize how big it really is.
      Converting the barn would be so expensive the return would be low, too low to my liking. + it is spending cash now to recoup it over the next 20 years. I do not feel like spending even more cash than we already are on the place.
      But a small FIRE BBQ isn’t a bad idea ..

  3. Buying a house because of the garden. I totally understand it :-)! We did more or less the same. Accept that we have to build the house ourselves (it will be small and well isolated). But it was because of the affordable big plot that we like it so much.
    And with so much space and barns etc, you must be able to make a private B&B out of it?!
    Have fun with it!

  4. Small and well isolated is definitely the way to go! Trust me on that one 😉
    But zero ambition to make it into a B&B, too much work, too low of a ROE ..

  5. With 140 square meter I already have room ‘left over’ in the house, let alone with the size of yours! Buying for the land is something I can get. And based on how you based your decisions, not that non-fire at all 😉

  6. I think too many people focus on buying a house from a financial perspective. Your house isn’t your biggest asset. You can’t just sell your house any day for capital gains.

    If the housing market goes up and you sell your house, you will have to buy another house that also got more expensive (because the entire housing market is going up).

    Focus on the house as a place to live – as your home, and don’t worry too much about the costs.

    • finan112_wp

      March 22, 2018 at 6:54 pm

      You are right. It is also why I never take the house into consideration when I look at my net worth. I have to live somewhere.

  7. And me that I complain for cleaning 86mp2 … 😀 😀 – I am the sloth here :))

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