Rent vs Buy.

As I watch various shows about people looking to buy a house I am struck buy an overwhelming thought of “why“.

Usually these are younger people who have been programmed into believing that buying a home is just “the right thing to do”. If this sounds like you, you needto sit down and really crunch the numbers to see if buying a house is for you at this time in your life.

<h2>What is it about “owning” a house that is so appealing?</h2>

They are sick of paying someone else rent and not “building equity”. I get that, I really do.

Plus some locations just do not offer many decent rental opportunities, especially for a growing family.

I “drank the kool-aid” on home ownership. Twice. Trust me when I say it is not all it is built up to be.

You are stuck in that one place. You really have no mobility. You have property taxes and utilities and upkeep and maintenance issues. It is never ending. The fridge stops working, you pay for a new one. Same for the furnace and the roof and everything else.

And of course all of the stuff that you want(not need) to go in the house.

And then there comes a time when you want to update and renovate, which seems to be inevitable and this will add up to thousads of dollars.

That’s if you can even find a house you like. A lot of people settle for something because they just want something. And then they want to change it. A lot of people end up being “house poor”.

Go ask 10 people who have done it and see what they say. Ask about their expenses. Ask them how much money they have saved. Would they do it again? What would they do differently?

<h2>So Should You Buy A House or Not?</h2>

I would suggest looking at less house than you can afford. Let’s say the bank pre-approves you for $250,000. I would not even come close to that! Look for houses that have been forclosed on for example. You might pick up a place for next to nothing.

Are you handy? Are you able to do some repairs and house maintenance yourself. It will save you a lot of money if you can tacle some of the work without having to hire outside help.

A minimalist lifestyle can include having a house. Buying a home can still be an amazing inverstment. But you better do it right. At least 25% for a down payment. Maybe a house with an apartment in it that you can rent out, or a even buy a duplex or triplex that will provide you with rental income..

Maybe you could consider a tiny house or smaller house.The cost savings would be tremendous if you were to go this route.

minimalist housing
minimalist housing

<h2>How Do You Figure This All Out?</h2>

The formula for how much house you can afford is about 30% of your gross income. When is the last time you were paid in gross dollars? So it seems to me that the formula is flawed.

“But I own it”. No you don’t. The bank owns it. And if you don’t pay your property taxes, it can be forclosed on.

Always remember that the word mortgage means “til death”. Hmmm…

And when the young folks on these real estate shows get ready to sign the papers even the agent says, “Are you ready to sign your life away?” All while smiling of course. Well of course! They are the ones making money.

I am NOT saying that you can never buy a home. I feel that you really needto do your homework and ask yourself some tough questions.

What kind of life do you want to have?

I have Changed The Code. I don’t believe things just because certain people tell me that’s the way it should be done.

For me becoming minimalist is about living life. Experiencing things. It can no longer be about acquiring stuff.

The joy of home ownership might just be a myth. Don’t believe everything you are told about this important life decision.

“Change The Code. Change Your Life.

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6 thoughts on “The Absolute Myth Of Owning A Home

  1. We actually own our own home as of 4 years ago, having paid extra principal each month. We cut our 30 yr mortgage to about 14 years by doing that and have been so thankful during this economic downturn.

    But I understand where you are coming from. When you may not have the ability to put a dent in your mortgage it is not all it’s cracked up to be. With the housing market like it is, so many people are having to short sale their homes or even the governments short term mortgage help is really no help at all. I look at my kids who can’t afford homeownership and really they don’t know how carefree their life is. The air conditioning breaks…call the landlord. The roof leaks…call the landlord. There’s lots of freedom there and freedom is worth a lot!

    Are your ready to sign your life away? That’s exactly the terms used! And you are right, the formula for what you can afford is so skewed. I never did believe it and refused to ever take our home ownership to that level. Exactly, don’t believe the hype…

  2. Yup. I still own a house that I rent out to others. Bought it for less than a used car, fixed it up etc. My ex wife is closer so she looks after it. Carefree. And it is also that today’s younger generation is all about quick and easy credit and not paying off their balances in a timely fashion, let alone monthly.Not all of them but most. And not just the 20 and 30 year olds either! I have friends in their 40’s who can’t make their payments. Good grief! How many of today’s younger, first time home buyers would be able to pay extra on their mortgage??
    Mark

  3. I think an interesting point of this is the fact of people simply buying more than they can afford. More than they actually need. Buying for the wrong reasons. I like buying my own home. I will like owning it even better. I know that it can seem like a noose but to me it is about having stabilty and not having to deal with a land lord. Just because something needs fixing does not mean they will fix it. Once you own your home I understand that you still have maintenence and taxs etc but that is money that would have still been spent on rent anyway. But my main point is that of being realistic and living in something much more affordable. If buying a home is about keeping up with others and having s house that you can “entertain” in then I believe that can be a huge problem. We downsized to a much smaller home. Our mortgage payments are reasonable and we have a chance of owning it fairly quickly and also we have not bitten of more than we can chew if and when things get tough as we can afford it. Because it is a basic home it is very easy to maintain. Thanks for listening to me prattle on, Cheers, Wendy

    1. Prattle away Wendy!

      You are so right with your comments. People just want to be able to brag about what they have. Instead they should concentrate on being realistic and saving for what they want, including a home that the can actually afford. i am single and need very little. I would b nice to have MY own tiny space.

      Thanks for commenting.

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