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Christopher Elliott – Question Conventional Wisdom When Buying a House
19th February 2021 • My Worst Investment Ever Podcast • Andrew Stotz
00:00:00 00:30:54

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Christopher Elliott is an award-winning consumer advocate, multimedia journalist, and customer service expert. He is known for his practical advice and creative solutions to customer-service problems.

He’s the author of Scammed: How to Save Your Money and Find Better Service in a World of Schemes, Swindles, and Shady Deals and How to Be the World’s Smartest Traveler (and Save Time, Money, and Hassle).

Christopher is a nationally syndicated columnist through King Features Syndicate, which distributes his work to publications from the Seattle Times to the Miami Herald.

He writes a weekly column for The Washington Post and USA Today and is the founder of Elliott Advocacy, a consumer advocacy organization.

 

“If you are not going to be in one place for more than five years, do not buy a house, just rent.”

Christopher Elliott

 

Worst investment ever

Christopher bought his first house in 2001 after resisting the homeowner bug for so long. But he found a great place in the Florida Keys, and he loved being there. And at $175,000, the price was just right. This was before the big housing boom.

A few weeks after moving into the new house, Christopher’s partner got pregnant as luck would have it. Now the two-bedroom home was not going to cut it for long.

Selling in a booming market

By the time Christopher’s son was a year and a half, they started getting very serious about selling. At the time, the housing market had exploded. He did a couple of renovations on the house and ended up selling it for $350,000.

Buying another home when he really should have rented

Christopher took all the money he made from selling his house and moved to Central Florida. Here he paid $235,000 cash for his new home. The house needed a little tender loving care, but Christopher did not mind; he still had some money left. So he renovated the house.

Being a nomad, he started getting restless and thought maybe they should sell the house and move into something a little bit bigger in a different area. And just as they were having that discussion, the bottom fell out of the housing market. They ended up staying in the house for about 12 years because they could not get a reasonable price for it.

Finally selling the house

Eventually, Christopher could no longer stay in the house, so he decided to sell it for the best price possible. Selling the home was a massive undertaking for Christopher. He got several buyers that came in and fell through. Others kept renegotiating the price down.

They finally settled for $285,000. Once the real estate agent took her cut and adding the money he had put into the house for renovations, he ended up losing a significant amount of money on that house. Christopher made a resolve never to buy a home as an investment again.

Lessons learned

Do not listen to conventional wisdom when buying a house

Stop assuming that what everyone says about owning a home is the best investment you can make, to be true. It is never a guarantee that you won’t lose money from buying a home. The American dream of being a homeowner is overrated.

Andrew’s takeaways

A house is not always an investment

It is never a guarantee that you will always be able to buy low and sell high when dealing with real estate.

Be careful when listening to marketing messages

Marketing messages are intended to hook you in. It is not always that you will gain from what is being sold. Remember that whoever is putting out that marketing message is looking to gain and not necessarily help you.

You do not have to get into debt just because loans are available

Seriously contemplate your options before you get sucked into a mortgage just because there are facilities that can offer you the loan. Be sure that this is a debt that you can comfortably bear.

Actionable advice

Think carefully before you buy that house. If you are not going to be in one place for more than five years, do not buy a house just rent, because you’ll have more flexibility.

No. 1 goal for the next 12 months

Christopher’s number one goal for the next 12 months is not to get infected with the Corona Virus.

 

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