There’s nothing special about our home in Provo, UT. Built in 1943 amid many blocks of similar-looking World War II cottages, the floor plan spans a mere 814 square feet, with two bedrooms, one bathroom, a cramped kitchen, and a small porch out front.
When we looked at this property with our real estate agent in 2004, we saw nearly every problem imaginable. It had an outdated electrical panel, galvanized plumbing, cracked walls, and water damage. Plus, it was awfully small, even for two people.
Yet somehow we knew: This was the one.
We devised a plan to live in this tiny house for just a few years. After that, we assumed we’d outgrow it, sell it, and move to a bigger house.
Yet three kids and 14 years later, we still found ourselves squeezed in these cramped quarters.
Although living in a too small house was a struggle and certainly not our original plan, it turned out to have some surprising advantages. In fact, I’d almost say that staying put turned out to be one of the smartest things we’ve ever done. Here’s why.
Small home = small house payments
First, let me state the obvious: This house was incredibly cheap. It was a foreclosure with a base price of $89,500, sold through the Officer Next Door Program. This was a Department of Housing and Urban Development program that would forgive 50% of the loan if we stayed in the home for three years. We put our names in the lottery for the house, and somehow, we were picked.
After adding escrow and closing costs, our mortgage was right around $450 a month. (I know how unrelatable this sounds right now. All I can say for people looking for a deal is to find a first-time homebuyer assistance program in your area—you might be shocked by how much you can save.)
Over the years, we worked on transforming the cold, musty foreclosure into a beautiful home full of warmth. So much love went into this home, as well as a lot of cursing as we tried our hand at DIY projects and repairs (sometimes successfully, other times not so much).
The plan was to stay in this house for the three years required for the loan forgiveness. After that, we would sell it and roll our profits into a newer, bigger house. But life had different plans for us.
Our small house gave us the financial freedom to travel—and start a family
After owning the home for four years, we left the country to teach English in South Korea. We rented out our house to a great couple attending law school at the nearby university.
When we returned in 2009 and moved back into our home, the economy was exceptionally tough to reenter, and we spent months struggling to find work. My husband was a fully certified peace officer, but could only find a job at Walmart for $12 an hour. After being turned down by The Gap, I eventually got hired as a research assistant.
During this time, we were so grateful our tiny house provided a cheap roof over our heads. Living in a 200-square-foot studio in Korea also taught us how to make any living situation work. Plans to buy a bigger house were put on hold.
Within a few years of moving back, we also learned that we would need in vitro fertilization to start a family. The cost for IVF was about $20,000 upfront to create the frozen embryos, followed by $4,000 each round to implant. There were no guarantees that IVF would succeed.
Thanks to appreciating home prices, we were able to do a cash-out refinance, which gave us the money to pay for the treatment.
After our second round of IVF, we brought home the most beautiful baby I had ever seen. We all fit just right in our cozy little cottage.
A few years later, we brought home IVF baby No. 2. While the little home worked for one baby, it was much tighter with the second. This baby was also a rough sleeper—which, in a tiny home, meant that none of us was getting much sleep.
After our third child came—miraculously without IVF—we were truly squished.
A small starter home can become a great rental
We finally moved out of our tiny starter home when my husband’s job transferred him to a rural area four hours away. This time, we purchased a 1973 ranch-style home with 2,800 square feet on 11 acres in the country. It was another major fixer-upper we’d bought for its potential—along with the small mortgage and incredible views.
Yet even this home, which seemed expansive to us, was nowhere near as large or luxurious as the ones our friends were getting. But there was a reason for our modest purchase: It meant we would not have to sell our first home to fund our second, and we would rent out our first home.
Keeping this little home with the little mortgage has been a delight. Every month, I see the mortgage balance go down, and the value of the home rise. We’ve had incredible price appreciation in Utah, and this small home that was once worth only $90,000 is now worth more than $300,000. It’s also close to being paid off.
By holding on to our first home, we have an income-producing asset that will benefit us for years. When our children are grown, they will have the option of staying in the house if they’re attending a university or trade school nearby. I’m hopeful it will keep them out of massive amounts of student debt and poverty.
Another reason we’ve decided to keep this little house? I think I’m too attached to ever sell it.
After all, it helped us get through some tough times when we couldn’t find work. It helped us pay for IVF and grow our family. Had we lived in a bigger house with a bigger mortgage, our life might be very different from what it is today. For that, I will always be grateful.
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