I’ve been getting asked more and more frequently if I am going to purchase a home.
I personally never saw the big hype in owning a home.
Disclaimer: This is not to discourage anyone from getting a home or bashing anyone, it’s just my thoughts.
I understand that it’s a big and significant purchase. For some people it’s the better option, but it seems like it has become the ‘gold standard’ in life just like getting married and having children. Having these things doesn’t necessarily measure success or happiness.
If I’m debt free, have significant savings and some investments I’m jumping up and down for joy, but people seem to think it’s strange. It would be nice to own a home, but what’s the big deal if you don’t?
In my head, owning my own home would mean that I would have saved up enough money over the years to build or buy a place. Then it’s mine.
Yes it might take me until I’m 50 or 60 depending on when I start saving to officially own it, but that’s how long it takes a lot of people to pay off a mortgage-with interest added.
So when I think of purchasing a home for $400,000 for example. I’m thinking that I’m $400,000 in debt. I’ve had the argument offered to me that the monthly payments would be just the same amount as rent. Then I start to get distraught. Low monthly payments! Then that’s a longer time to pay off your house, with interest don’t forget. Here are some of the things I consider.
- You’re left with a large dept that you will be paying off for years with interest. Even though you may sell the house and make a profit how does that compare to what you could have saved- oh and don’t forget about inflation.
- Renovations. Things get broken. Things get outdated. That is an added expense and headache that has to be dealt with.
- The money that you worked hard to save will be gone. Although it’s technically not wasted, the amount that was put towards a down payment could have remained in savings or investment.
- You don’t actually own it yet. You put a down payment on it, you’re paying for it, but don’t get it twisted it’s not yours. Daddy Bank still has power over you.
- Your flexibility is limited. If you never plan to move and have stability then this might be a great option. If not then you can just sell it, or rent it; but have you ever heard of any tenant-landlord horror stories? I rest my case.
- Finances. I think that some people buy a home because they just feel like it’s something they should do. Marriages are broken apart from financial strain. If both partners could be happy and content with each other and what they have then they can reevaluate their true needs.
- The times. We live in a time where the world is full of chaos. Floods, fires, and natural disasters are rampant. This is not going to get better over time. We should not live in fear because of this, but we should be aware of the losses that we may face and our ability to cope with them. People have taken their lives over money and stock market crashes. Are you able to cope?
I know that wanting to own a home also has to do with decorating the space as well. We want to paint our walls, we want to tear down our walls- but really is it that deep? If you find a place you really like then it might not be so bad.
Here’s when I would buy a home…
- Buying somewhere you can afford. For example I want to build in the Caribbean. Your money will be worth more if you research the currency in different places, along with safety affordability ect. Then you can always airbnb it.
- Buying someTHING you can afford. There are homes for under 100k and many other small house options. If you are able to save and purchase one of these you can live there, or rent a larger house and then rent out the one you own. If you get a similar rental income from tenants then you can be virtually living in your bigger home for ‘free’ or at a minimal cost.
- As an investment. If you can afford to and have an understanding of the process-go for it. If you’re preparing for your child to go to university then that’s a personal investment.
- If you want to, and don’t care either way!
At the end of the day we all have to make our own choices. I’m not a housing expert. I’m just musing. I just wanted to bring some awareness to light that there are other options when it comes to home owning. We don’t need to conform to the ‘gold standard’ of society.
Here are some other articles that discuss the topic
How do you feel about buying a home?