The Secret To Owning TWO Houses Before You're 35

Illustrated by Tania Lili.
I have a secret. A secret that I keep from most of my colleagues and even some of my friends: I own two homes.

I rarely tell anyone this, because when people find out that my husband and I own a three-bedroom house in East Hampton and a two-bedroom apartment in New York City, they immediately assume that we are rich. We are not — not even close. We do fairly well in our fields, but neither one of us has cracked six figures yet, and we come from regular, middle-class families. However, I have been exceptionally lucky with real estate.

My scheming began when I was a year out of college, living on an editorial assistant’s salary in Morningside Heights. A relative died, leaving me a very small amount of money, which my mother promptly suggested I ought to use to buy an apartment. I balked. I was making less than $30,000 a year; I couldn’t buy an apartment.

“Think about it,” she said, “How much have you spent on rent in the last four years?”

My immediate thought was that I hadn’t spent much at all. I prided myself on always finding a nice but affordable place to live. It was 2002, and I was paying about $750/month, which was far less than many of my friends. But still, my mother had a point: After four-plus years, I had spent somewhere in the neighborhood of $50,000. Fifty. Thousand. Dollars.

“That’s money you’ll never get back,” my mom quipped.

She was right. It was a big enough number to get me looking, even though I had my doubts.

My mother's property-buying advice was based on her own good fortune with New York City real estate. In the 1970s, when she was in graduate school, she got the idea that she and my father should buy an apartment. So they purchased a co-op on the yet-to-be-gentrified Upper West Side. A few years later, my parents flipped their co-op and headed to the suburbs with five times their original purchase price in hand: New York City real estate had treated them well. A family of hawks was born, and my mother would forever believe that “no one ever loses money on New York City real estate," (which is mostly accurate).

Illustrated by Tania Lili.

As enthusiastic property buyers, my parents offered to help me with the rest of the down payment, with the understanding that I would pay them back when I sold my apartment at a future date; my grandma agreed to chip in, as well. I set my budget at $100,000 and looked at the very few listings downtown that were in my price range. (Readers, I apologize, but it is true: There were apartments to be had for $100,000 in Manhattan — downtown, no less — just one dozen years ago.) My budget, however, quickly expanded to $120,000, and my location parameters extended to "anywhere below 125th Street." I found a studio within my budget in the far West Village, near the West Side Highway. After persuading my mother to come into the city to approve my choice, I made an offer, which was accepted. After not too much time, I found myself the owner of the world’s tiniest studio apartment. My monthly expenses were more than my rental had been, but I was prepared to economize for the sake of home ownership.

After a few years and some minor renovations, I sold the studio for double what I had paid for it; the tidy profit allowed me to repay my parents and still have a chunk of money left over for a down payment on a new apartment. Instead of expanding my budget for my next place, I chose to put a significant down payment on a one-bedroom in Brooklyn that was listed for less than the sale price of the West Village pad. In short, I was able to keep my monthly costs about the same while doubling my space.

The one-bedroom began to feel a little small when my then-boyfriend moved in a few years later. We were both freelancers at the time, and the space that had seemed enormous when I was single suddenly seemed quite small. However, having someone to split the monthly costs meant we could both start saving more each month. I began looking casually at real estate listings for a larger space — just to see what was out there. I also rented a string of office spaces, which bought us some time. However, by the end of 2011, we were eager to find a larger place to live, and we began looking for a two-bedroom in earnest.

My now-husband and I were shocked by how quickly the Brooklyn market had changed. When we went to open houses, there were always huge crowds of people — dozens of couples about our age, often with a pregnant woman as part of the pair. We started looking farther out into Brooklyn and expanded our budget, yet we still weren’t finding any bargains. Everything we saw received multiple offers, many above the asking price. Worse still, most of the places we could afford weren’t anything we were excited by. We began debating just how far out into Brooklyn we’d be willing to live. I explored the merits of trying to buy a house and renting out the other apartments to offset the cost.

While all this meant it was a terrible time to buy, it also meant it was a great time to sell. We decided to go ahead and list our one-bedroom. We figured we could have a temporary rental between apartments, if need be. With the help of a great broker, we staged our apartment (half of our belongings went into a storage locker to make the apartment feel more spacious) and settled on a sale price comparable to similar listings nearby. We put it on the market and received three offers after the first open house — all of them at or above the asking price.

Illustrated by Tania Lili.

Once again, I’d managed to flip my apartment and make a considerable profit. We now had a sizable sum of money to put down on our next home, but the astronomical asking prices in our preferred Brooklyn neighborhoods meant we’d be looking at a high monthly nut between mortgage and maintenance. Every time I crunched the numbers, it seemed like it didn’t make sense to make a purchase. We fretted about what to do, and my gut said we shouldn't buy. So, we didn’t. Instead, we found a good deal on a two-year rental. We decided to watch the market and bide our time.

While renting the first year, we drove out to East Hampton over the holidays for a night in a hotel as a pre-Christmas treat. Driving around in the cold that weekend, my husband wondered how much a waterfront listing might cost. So I opened my Trulia app and looked. We laughed at the high price tag, and as we drove, I watched the app's map and called out the asking prices for the homes we passed with "For Sale" signs. As we made our way west, I saw a listing pop up for $310,000 just north of the highway. Surprised and curious, I asked my husband to hook a right and drive towards the bargain listing. A half a mile later, we pulled into the driveway of a very small, but very real house. With my phone in hand, we looked at the interior photos while parked outside. It seemed unbelievable that here was an honest-to-goodness house that cost less than a studio apartment in our neighborhood. And that house was situated in one of the most luxurious resort towns in America!

As we drove back to Brooklyn that night, we did a lot of “what if” talk. What if we bought a house in the Hamptons? Still freelancers, we imagined living there half the week and spending the other half in the city. We knew the rental market out there was strong enough that we could surely rent the house to offset the cost of a mortgage. We imagined fixing something up and flipping it. We imagined not feeling so bad about cramped quarters back in the city if we had a weekend escape.

Reader, I dreamed of days at the beach.

At my computer that night, I ran a multiple-listings service search and was surprised once again to see that there were several houses for $300,000 in the area. I ran numbers through an online mortgage calculator and was cautiously optimistic that we could actually make this scheme work.

Over the next two months, we saw every house in the $300,000 range in the area — most of them were too dilapidated for us to consider. We expanded our budget and looked at everything under $400,000. I researched rental rates to guesstimate how much we could anticipate in rental income. I even made a complex spreadsheet that helped me figure out what we could really afford. Finally, with a bit of trepidation, we made an offer on a house for $399,000, which was accepted.

The house needed work, but I was hopeful we could be renting it within a year. I figured, with our profits from the last sale, we had enough for the down payment, renovations, and a little more left over for a future purchase back in the city. For the first time in my real-estate-buying history, my parents were not convinced I’d made the right choice. They believed that I’d underestimated how much the work would cost and overestimated how much I could rent the house for. Fortunately, they were right on only the first count. Bids for painting were so high that we did it ourselves (it took 10 months of painting nearly every weekend). We contracted out the bathroom renovations, which were a significant investment but unavoidable. By the second year, we had the house rented for the majority of the summer — my plan had worked.
Illustrated by Tania Lili.
We made it just a year and a half before the New York City real estate bug hit again. We were coming up on the end of our lease, and we needed to find a place to live. Once again, we looked at two-bedrooms for sale in Brooklyn, and things were even worse than they had been before. In fact, they were so bad that we began looking in Manhattan. We figured if we were going to pay that much, we might as well live in the heart of the city. But a tour of every apartment under a half million dollars in lower Manhattan convinced us that we couldn't afford anything in either borough, so I set my sights on Queens. We were venturing into unfamiliar territory.

I had a few friends who'd moved to Astoria, Jackson Heights, and Sunnyside, so we decided to have a look one cold afternoon last winter. Walking through our future neighborhood, my husband and I immediately felt like we could call Queens home. We loved the mix of the residential streets and the busy commercial ones, the close proximity to midtown, and most of all the low (for New York City) prices. That first day, we saw seven apartments, and we looked at several more in the next week before finally making an offer on a large one-bedroom. It was listed for less than I had sold my studio for back in 2006 and half of what a comparable apartment cost in the parts of Brooklyn we'd been hoping to move to. We were ecstatic when our offer was accepted.

My parents came to visit shortly after we moved, and quite quickly they, too, fell in love with Queens. My grandmother had just died, leaving my mother a bit of money, and this prompted her to take her own advice: She bought a studio very near to our apartment — so she’d have a place to stay when she visited, and because, as she likes to say, “no one ever loses money on New York City real estate.” It may seem hasty, but my mom had extra motivation to be near us: We were expecting a baby.

Today, we live in Queens and head out to Long Island most weekends. We rent the weekend house for the prime summer months to offset the cost of the mortgage, taxes, and insurance. Combined, the cost of the two homes is less than what some of my friends pay in rent in New York City. Our apartment isn’t our "forever" apartment, but it’ll hold our family of three for the next few years. Plus, my mother and I are already scheming our next move: We imagine that, in a few years, we’ll sell our apartments and buy a small house with a separate apartment that my parents can live in when they visit — and that I can rent out when they are in California. Now, when I'm walking the baby in the stroller, I find myself stopping to look up houses with "For Sale" signs, just to keep myself in the loop. I swear, I’m not really looking.

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