Our New Mortgage Free Home


Mortgage Free Home
This is the “before” photo of our new home.

Thanks to geoarbitrage, our financial independence plan gets a huge boost.  Today I’ll describe how we plan to achieve the mortgage free part of our FI plan.  Geoarbitrage is a simple concept of taking advantage of much lower costs of living in different geographic locations.

As much as we love living in the city we are currently in, the real estate prices are much higher than some of the opportunities available to us.  There are many cities that have houses for sale for a fraction of the price as the big metropolitans and still have all the same amenities.

This week we finalized an offer for our new home where we plan to settle in the next 12 months. We had been following this house for many months and it had just dropped again to $80,000. This is a bank foreclosure that will require significant work however it is located on a nice lot and has so much potential. It has 3 bedrooms and 1.5 baths. We had an inspection done and the foundation, plumbing, electrical are all very solid. The kitchen is also very modern (old owners started renovations).

So we essentially need to update the rest of the house but without any structural work required. We will be able to do it on a reasonable budget. We are hiring my dad to do most of the renovations and we will come help as much as we can on weekends.

This house is closer to our hometown (approx. 4 hours drive from here). Many factors led us to choose this town as our FI home.

  1. With the equity we built in our Ottawa home, we can purchase this house and do the renovations mortgage free. This is due to the very low real estate prices in this region.
  2. We have lots of family and friends in this town.
  3. This town has all the amenities required. Plenty of schools and 2 grocery stores within walking distance. Other shopping (Walmart, Costco, Home Depot) is about 30 minutes away. We will also be walking distance to the hospital and our kids new school.

We also own two rental properties in this town which are also walking/biking distance from our new home so we will be able to look after these and maintain them ourselves.

  • Purchase Price: $80,000
  • Closing Costs (legal, inspections, land transfer tax etc).: $2,500
  • Renovation Budget: $20,000-$40,000
  • Total Price: $102,500 – $124,500
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