It was bound to happen eventually.
I’ve been wanting to buy a house for several years now. It was partly emotional, partly financial and partly a desire to establish a more permanent residence, thereby helping to fulfill my safety needs (Maslow anyone?). Well that day looks like it’s finally come. My wife and I have been hunting for homes for about a month now in the Phoenix area and about a week ago we found one that we absolutely adore. We placed a bid on it and our bid has been accepted. Now we work out the rest of the stuff: appraisal, inspection, closing and then we will be homeowners!
It’s rather quite exciting. I have some major plans, such as planting a garden to grow my own fruits and vegetables, or decorating the home exactly how I’d like it (I feel limited here in this apartment because I don’t want to paint or put too many holes in the wall).
We found a beautiful house that is offering us just about everything we want. It’s a single story three bedroom, two bathroom house with vaulted ceilings in all the right places and a very large (for the city) lot. It’s in a great location (North Phoenix) that’s not only close to work but also close to everything else: downtown Phoenix, Scottsdale and even the West Valley (where our families live). We couldn’t be happier about the home that we’ve found.
Before I cut off let me tell you what is not motivating me to buy a house. It’s really only one reason, and is often the main reason for certain types of people to purchase a home. I’m not buying this house as an investment. In my eyes a home is not a builder of wealth. It is not an ATM machine. The real return on homes has historically never been as good as other types of investments. Sure you can’t live in other investments, but that still doesn’t mean you should count on all of your wealth building to come solely from the house that you buy. I’m not counting on it, and neither should you.
7 responses to “I’m Buying A House. Here’s Why (and why not).”
Great post. My wife and I just bought our first house, and we’re of the exact same mindset as you.
We’re not buying it to make a big payday. We’re buying it because we need a bigger place to live (a baby will do that to you) and we’d rather put our monthly rent money toward a property we will outright own.
Plus, when the government wants to give you $8000 for free, it’s worth taking them up on the offer.
Jason Ungers last blog post..The Once-in-a-While Fund: How it Works
The $8,000 for free is a nice incentive isn’t it?
Thanks for the comment Jason!
Well congrats to you guys! And I commend you on not buying just to make a quick buck or two. I’ve been reamed for not owning a house for years because people tell me it’s an investment and I’m wasting money. While I agree that renting an apartment is a waste of money, this is where my life is right now. I’m not ready to own a home, investment or not. And, considering the market right now, owning a home isn’t much of an investment vehicle as it once was. So, it’s certainly not the reason I would buy.
At any rate, be sure your big plans don’t put you in big debt! My best friend had big plans when she bought her first house and now she doesn’t go out and eats hamburger helper every night just so she can afford to stay afloat on work on paying off the debt. Her big thing was that she didn’t pace herself. She had to have everything all at once. The house needed paining, she needed all new appliances, she needed to put up a fence, she had to get dogs to go in her new fenced in backyard, she needed a new bedroom outfit, etc. One thing at a time, then save for the next. I tried to tell her that, but she didn’t listen.
Congrats again and best of luck!
Kristy @ Master Your Cards last blog post..IRA Basics – Part 1
Congrats Joe. I’m sure you were able to land an incredible interest rate?
Blakes last blog post..No Private Student Loan Goal- an Update.
Kristy,
Thanks for the comment. Don’t you worry about me – my wife and I are not going in over our heads on this. We’re trying to plan for the worst case scenario… so we should be just fine without going in any unnecessary debt.
Blake,
Thanks man. I actually haven’t locked in a rate yet. Still waiting on the seller to sign the purchase contract before we can lock it in. Hopefully they don’t go up too much… today they were at 5.22%.
You are so right that a house isn’t an ATM. A lot of people made that mistake and have lost their houses.
But, I disagree with you on two other points.
A house can be a great long-term accumulator of wealth, provided you buy it for a reasonable amount, get a good loan and then pay it off.
Another point is that a house can definitely outperform other investments because of leverage, taxes and many other factors. For example, if your house appreciates 5% and you put 10% down, then you are really getting a 50% return on your investment, before factoring in the mortgage.
So, you can’t directly compare real estate to financial investments on a straight-return basis.
Good luck on your new home. The most important factor is being able to call your own shots in your own house.
Bret Frohlichs last blog post..Developing a Wealthy Mindset
ya you are wright… A lot of people made that mistake and have lost their houses.
Good luck on your new home.
Finance Dollar