Home Ownership: Is It Right For You?
The American Dream, and the aspiration to achieve it, would say the answer is simply, a resounding “Yes!” I mean, who doesn’t want to have a domain that is all their own? A sanctuary from the outside world where no one can tell you what to do, or how to be. We all need that place that we can make dirty, and then make clean, but is always in a state in between.
The thing is, buying a home isn’t always easy to achieve. Depending on the market you might be living in, a starter home could run you $250,000.00 or more. That’s a quarter of a MILLION Dollars. Personally, I don’t know of too many people with that kind of Cold Hard Cash that can be dished out for a place that happens to have a kitchen sink attached to it.
Still, in this day and age of Banks and Lenders, it is possible to get a loan. And, 30 years later the home you buy could very well be yours, out right.
My personal opinion is that Home Ownership is a great thing (I better believe that, I am a Real Estate Agent after all). That said, there are some things to keep in mind when considering to buy a home. The first thing that I think should always be considered is: “What are the prevailing Rental Rates in your area?” If you’re living in a 2-bedroom apartment and paying a given amount, let’s say $800.00 to a $1,000.00 a month; what would your monthly “Nut” be if you bought a 2-bedroom condo? If the Nut is the same, or potentially less than the prevailing rental rates in your town, it might be a good idea to buy a Condo. One demographic that I think is under served, in this respect, are the Parents of College Aged children.
Nobody, it seems, ever sits down and talks to them and says, “Hey, do you want to have all the money you pay go towards Dorm Fees and tuition? Or, would like to maybe have a tangible asset just in case your kid doesn’t cut it in College?” Growing up in a College Town, there were so many rentals available. It was such a flooded market, the first time I ever heard about what a Condo was, I almost 30 years old. That was 15 years ago.
…Imagine that for a second…, paying $400.00 a month for a two bedroom condo these past 15 years. If nothing else in your life changed, you could honestly say that your monthly Nut, is nothing compared to everyone else’s.
The second thing that I think should be considered is: “How long are you going to be in the town or city that you’re currently in? Do you see yourself being there beyond a year? From my experience, Procrastination makes victims of us all. One minute, your living your life and planning trips that your going to take as you contemplate exploring the world. The next minute, 10 years have gone by and you’ve been living month to month while changing apartments every year to three years (sometimes more than that). Meanwhile, all that money that was made and then paid for rent, went into somebody else’s account.
Still, it is a big decision to make. Buying Property for a home (no matter what form that home may take) is commitment of more than finances. It takes a real desire to create something. It also takes its own toll, emotionally. Our hearts go in to what we would call our homes. That’s not a trifling thing to say, or even acknowledge.
This leads me to the third thing that should be considered: “What is your game plan?” What are you planning to do down the road? Do you have hobbies that require something more than three hots and a cot? It’s a nutty thing but, businesses have literally been started out of the Garages of America: Apple, Amazon, Google, Harley Davidson, and Mattel are just a smattering of the start-ups that Garages have brought into this world.
Sure…, you can rent a house with a garage. But, can you find the COOL Landlord that’ll allow you the freedom to utilize a garage for more than storage? If you can, or have, more power to ya’. Keep doin’ what you’re doin’. For the rest of the world, I would say, think about how cool it would be to have, and own your own garage.
Still, there is the amount of money to contend with. If you don’t have the cash to buy a home outright, then you have to look at financing and the P.I.T.I. of it all. You know what the P and the I are: Principle and Interest. What you might not know about are the T and second I: Taxes and Insurance. Taxes are taxes, and there is not much you’ll be able to do about that, except to pay them. I recommend that you do that, by the way, Pay the Taxes. Otherwise, you won’t be allowed to live in the house your thinking about buying. It’s the Insurance that’s the tricky thing to have to deal with. You see, if you get any kind of financing outside of a conventional loan (pretty much almost every time) you end up having to pay for what’s called PMI, or Private Mortgage Insurance. The thing is, this insurance does nothing for you as the borrower. You pay it so that the bank, or lender that is providing the loan, gets a payout in the event that you default and ultimately get foreclosed on. So, if that scenario were to happen, the bank not only gets your house, but it also gets a payout. It’s pretty crazy, I know. The upside, the bank doesn’t want your house, or anybody’s house for that matter. Why? Because the second that house or any house comes into their possession, guess what the bank has to pay out? Taxes, specifically, Property Taxes.
This leads me to the Fourth Question that should be considered: “What are Property Taxes in your area?” Are they prohibitively high? Are they crazy low? Are the public services matching what is being spent and paid for? How quickly does the city respond when there is a power outage? Are your streets reasonably maintained? For some, the answers to these last couple of questions is always a resounding NO. But, that’s what we got Facebook for folks. We’re no longer bound to the towns and cities we don’t want to live in as much as we have been. And, believe it or not, you’re still paying these taxes if you’re renting. As a Homeowner, you’ll be more aware of what is going on in your town, and why it’s going on. People pulling at the purse strings that you control will tend to wake you up more than you have been if you’ve just been renting.
As I mentioned before, I am a Real Estate Agent. So, of course, I am biased in my view of Home Ownership. Still, if my two cents has helped you make a decision for the betterment of your life, I consider it two cents well spent. Thank you for reading me, and I hope you have a great day.