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> It doesn’t make sense to not buy the best house you can afford. I heard that a lot in the 2006-2007 era. And plenty of people lost that "best home they coul
by Syonyk 4y ago
> It doesn’t make sense to not buy the best house you can afford.
I heard that a lot in the 2006-2007 era. And plenty of people lost that "best home they could afford" back then. Fortunately, I couldn't afford a four-figure car, much less a house - though some other grad students seemed able to convince someone to offer them loans. No idea how all those worked out, I do hope some of them were able to keep the houses.
I know quite a few people who are able to afford their houses, but wish they'd purchased smaller. A larger house, all other things being equal, will cost more to heat and cool, take more time to clean and maintain, and will generally have far higher carrying costs. You can mitigate some of them, but they're quite a bit more expensive than something smaller, simpler, and cheaper to maintain.
I don't own a house as an investment. I own it as a place to live, with some land to do things outside. And at this point, our "minimum monthly spend" to keep the house climate controlled and lit is pretty darn low. Again, I recognize it's not a particularly popular point of view, especially in the tech circles, but I find "buying a big house as an investment when you don't need it" to be entirely absurd.
- auspex 4y agoBuying a bigger house just allows you to park more of your net worth in real estate. As a diversification it makes sense. But also as you make more money the payment becomes less and less of your monthly income. It’s not absurd. It’s just a different reason for buying a house.
- mejutoco 4y ago> It doesn’t make sense to not buy the best house you can afford. I don’t understand how buying more of one thing is diversification. Some idea that makes more sense to me is to buy 2 smaller houses, live in one and rent the other one. This diversifies more and is an example that it can make sense not to buy the biggest house you can afford.
- Spooky23 4y agoI wasn’t saying “you do you” sarcastically. You ultimately decide what you can afford. Being conservative debt is a valid strategy, but has risks. Buying the house you need at 25 may not be the optimal strategy if you’re going to be there when you’re 35. Bedrooms and school districts may matter more. In my own case, my wife and I decided that we would send our kids to private schools and wanted to maximize our family time. So we bought a house in an urban area that was perfect for our goals, had a 10 minute commute and much less expensive than a suburban house of similar nature. We borrowed, but not excessively. Financially, it’s not a high rate of return (probably about 3% annually). My same house in a town with a good school district would have generated a 10% return. But for me, liberating 150 hours of commuting time and not having a big mortgage was valued higher.
- Izkata 4y agoThose all sound like examples of people who didn't realize what went into a house and bought one they couldn't afford.