Unless you are rich, don’t buy a new house. Buying a house is considered one of the most significant economic decisions people can undertake on themselves. It is indeed one of the most expensive ones, following by buying a car, getting married, and having a baby.
A typical reason people want to have their own house is that this is a natural progression of life, or so people believe.
Here are Seven reasons why people should not buy a new house unless they are rich:
1 – Paying Mortgage Can Be Very Expensive
People believe that it is better to pay banks for a house and eventually owning the place than renting it from a third party. After 20 to 30 years of this exercise, the house becomes theirs, so they are paying themselves!
This is a good logic, but it ignores a significant risk factor. While paying rent can get you a house in 20 to 30 years, it makes you inflexible if you decide to move to a different location. In a progressively globalized world, getting attached to a single place is becoming a limiting decision.
Moreover, paying rent is more flexible than paying a mortgage. Rent has to be paid for short periods, but not for years. If a person decided to stop renting and live the house, more often than not, he can do so within 2 months. However, people cannot simply stop paying for the mortgage. What if a person suddenly loses his job or anything else happens in their lives, and suddenly they cannot pay for the house? Stopping to pay the mortgage may mean that this person has to sell his house, which is not an easy process either.
2 – It May Be Difficult To Sell A House
Regarding selling a house, some people believe that they can wait for the house to become more valuable and sell it at a profit, as often a sales people tell their clients. At least this was the reality before the 2008 financial crash.
Even before the economic impact, investing in a market with no understanding of these markets is a wrong decision, period. This is to say, never buy anything for promises you don’t fully understand. This is the advice of The Richest Man in Babylon and many other financial gurus.
3 – You Are Paying For Every Extra Rooms
Every single place in the house has to have a purpose. One room is a master bedroom, another one is for children, then there is a kitchen, a living room, a study, a walk-in closet, etc.
Most people don’t realize it, but extra space requires extra possessions to fill this space. A walk-in closet involves a lot of cloth. A child’s room needed toys, beds, special paint, books, and many other things that a child may require. A space for guests in this room has to be furnished and prepared for possible guest arrival.
Moreover, a bigger house will cost more. Every extra room will increase the cost of the house. These costs are often overlooked because people believe they want something and should have it even if it put them in a financially uncomfortable situation.
4 – Mother That Never Comes
Similar to the previous point, people often decide to have a guest room to accommodate friends and relatives they expect to go eventually. Extra space must be designed and decorated as described above to accommodate a mother or friends that will maybe come once a year.
While this is a lovely idea, most people do not want to have these extra people staying in their houses indefinitely. So while a friend came visit you for a da last a day or a mother can stay for a week or two, they are politely suggested to leave eventually.
Of course, this is fine, but considering the time and money invested in a room for occasional stay, it may have been easier to put these friends or relatives into an excellent 4-star hotel and pay for their taxi transportation. It could still have been a better investment.
5 – Penny Smart, Dollar Smart
We have a bias of low prices that can make us overthink small values, while completely overlook big numbers. As such, we can save on pennies in the supermarkets, but when it comes to buy a house, few thousand euro becomes less of a big deal.
More specifically, if something that should cost 100 euro costs 150 euro, we have a problem. But if something that costs 100.000 euro costs 105.000 euro, than it is not problematic.
6 – You Are Always Paying For Clutter
Unknown to most people, extra possessions create extra stress. The more things people have, the bigger the anchor people have to the place of their possession. A significant new TV must be watched even if there is nothing good on it. The more cloth a person has, the more he has to worry about how he looks. There should always be someone inside a big house, otherwise, what is the point? This is a reason people are often almost running back home after work. They have to be reunited with their possession.
Oppositely, suppose we don’t have a lot of things to come back home to. In that case, it becomes so much easier to do alternative activities, such as to take a trip to another town, to go out running in a park, or to visit friend, who will be more than happy to show you their house full of possessions that keep them inside.
7 – Don’t Forget That You Need To Do More Cleaning
Extra space and possessions also mean excess mess. No matter how much people try, things always end up lying where they are not supposed to. Even in an empty room, dust settles eventually.
Solution? First, you don’t buy a new house unless you are rich unless or you are 100% sure you want one. However, if you decide to buy a home or even rent one, choose how many rooms you need. The rule will tend to be – less is more. Extra spaces will cost you more money, and there is no shame in having a smaller apartment. Considering a new age, it may be useful to buy fewer things and spend more time with friends in their big flats.
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