Fifteen years ago, I was offered a job of a lifetime. It required uprooting our newly-started family and moving from Seattle to Cleveland. As hard as it was to make the decision to accept the job, the harder choice came later. My husband and I had saved for years and had designed and built our dream house. We were enjoying an up economy and our home's value skyrocketed. Being good stewards of our personal finances, we sought advice regarding our move. Should we rent or own in our new city? Should we keep our dream house and become long distance landlords or sell and take advantage of the market?
Sell vs. RentWe received overwhelming advice that because the market was in our favor, we should sell our Seattle house and reinvest the profits in a home in Cleveland. We were counseled not to become long-distance landlords, and that equity was equity. We listened to the experts, sold our house for a healthy profit and invested the equity in a pristine home in the Cleveland area.
Know Your CityFast-forward two years later. We discovered Cleveland was not Seattle. We missed the innovative, pioneering spirit we had left behind and my dream job had turned into a nightmare that left me jobless. Facing a large mortgage, we made the best decision of our lives and decided to move back to Seattle to be with friends, family and a culture we understood. We put the Cleveland house on the market, sent out resumes, and before we knew it I had a job offer in hand and our ticket back home. Convinced that our house would sell, we sold off our stock portfolio to make a down payment on a house just a few miles away from our original hand-built Seattle dream home.
Equity is not GoldenLife was good until the dot.com bubble burst. The Cleveland house didn't sell. We found ourselves with multiple mortgage payments and a long-distance house for sale that lost value every month. We liquidated retirement accounts, racked up $25,000 in credit card debt, and wiped out all of our family's financial security. The Cleveland house finally sold over a year later, well below our purchase price. We lost all of our equity. It took five years of debt consolidation and frugal living to dig ourselves out of that financial black hole. Now, at 53-years-old, I can say that outside of our current mortgage, we are debt-free and have just begun to rebuild our retirement reserves.
Regret: You BetWith the power of hindsight, do I regret the decisions of youth? Absolutely. I wish we would have recognized the uncertainty of a long-distance move and opted to become landlords and renters. It would have given us time to determine if our new city was a keeper, and it would have given us a beloved landing place when we decided to return. If we had listened to our hearts and understood the difference of the Seattle vs. Cleveland markets we would have retained our equity, and our retirement accounts.
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