HOW DID MY husband and I get where we are today—early retirement in Spain? One of the most critical decisions concerned our biggest expense: housing. As the one in charge of the family’s financial planning, I wish I could say I planned this outcome all along, but I didn’t. We were just lucky—though I like to think it was “lucky” in the sense that luck is when preparation meets opportunity.
When Jim and I got married in 2003—a second marriage for both of us—we needed a new place for our combined family of four, plus cats. I was happy to move into his rented 1,700-square-foot townhouse, but Jim wanted to buy a home that had more room for our two boys.
I was concerned about committing to a house purchase. Before I met Jim, I had been a single mom for five years. Like most divorcees, I’d experienced a huge financial setback, compounded by receiving no financial or child support from my ex. When I remarried, I felt I had barely gotten back on my feet financially and was wary of taking on debt. Additionally, at the time of our marriage in 2003, my salary was $47,000. My new husband had a teacher’s salary that wasn’t much more. To afford a home, our total mortgage payment would likely be right at the maximum recommended 28% of income.
In the end, we did what most couples do: We compromised. Our nonnegotiable common ground was our sons’ education. We agreed to buy a house in a good school district. It wasn’t necessarily “the best,” but it provided ample opportunity and had a diverse student body.
We didn’t fall for the realtor pitch to “buy the biggest house you can afford.” We ended up buying the most modest home that we could all be comfortable in. It came with a lower price than most homes in the neighborhood, because the house hadn’t been upgraded for 10-plus years, with old-fashioned but solid kitchen cabinets, wallpaper and older bathroom fixtures—and just enough room for a family of four.
We avoided renovations that merely beautified the house, such as cosmetic kitchen and bathroom upgrades. We loved the old-fashioned cabinets, the big Spanish floor tiled entrance that we were told was out of style, and the simple white bathroom tiles. They were functional, good quality and built to last—and, indeed, had done so since the house was constructed 40 years earlier.
We also didn’t spend a lot of money on home decor. In fact, when we moved in, all our furniture was already secondhand, either passed on to us from relatives or found at garage sales, thrift stores and even on the sidewalk on bulk trash pickup days.
Our one big mistake was buying a house that came with an old, unkept swimming pool that required year-round maintenance and incurred high electricity and water costs. We did the unthinkable: We had the pool filled in and replaced with a deck and yard. It cost us $7,000, but the $200 monthly savings in electricity and water meant we broke even after three years.
We did invest to make our home more energy efficient by adding $3,000 worth of insulation. That allowed us to claim a tax deduction, while ultimately saving on utilities. We took advantage of the home warranty program that came with the home to replace the dishwasher, hot water heater and double ovens, all at very little cost to us. Over the years, we also did some projects ourselves, like painting, installing new hardwood floors and putting up shelving. What we lost in professional installation was more than made up for by the family bonding time and the memories, which we all still cherish to this day. In addition to keeping our housing expenses low, we took advantage of rock-bottom rates during the Great Recession to refinance our mortgage from 5.5% to 3.5%.
This was the preparation. Opportunity came in 2016, when Dallas became one of the top places in the nation for population growth. That growth drove housing prices to record levels three years in a row, with the median price of a single-family house in the Dallas area shooting up more than 50% from 2012’s level. It was a seller’s market, especially in our area, with its good school district. Since both our boys had graduated high school, we no longer needed to stay in the district. We seized the opportunity and sold.
The upshot: The house we bought in 2003 for $200,000 was sold for $340,000 in 2016. After paying off the $100,000 owed on the mortgage, we netted about $240,000, which enabled us to buy a smaller townhouse with cash. We had become mortgage-free in just 13 years. In 2018, we rented out our home. That provides us with rental income, which helps support our retirement here in Spain.
Jiab Wasserman recently left from her job as a financial analyst at a large bank at age 53. She’s now semi-retired. Her previous articles for HumbleDollar include The Gift of Life, Odds Against and Mind the Gap. Jiab and her husband currently live in Granada, Spain, and blog about downshifting, personal finance and other aspects of retirement—as well as about their experience relocating to another country—at YourThirdLife.com.