Home is not an Investment
I bought a house for all the wrong reasons. Mainly, it was the thing to do. I never considered myself a follower, but friends were buying houses, and I was sick of my commute to work, it seemed the bright thing to do. After all, a house is an investment has been the mantra of the American Dream for the awhile now.
But it’s just not necessarily so. Well before I ever sold my home to start over, I was becoming disenchanted. I feel like owning a home fits a very specific segment who wishes to be settled and to some degree who find joy in nesting. I was no more settled than any apartment dweller. I was not tied to a community, but in a way my house became an anchor around my neck.
Any time I’d consider looking for another job, I had to keep in mind the commute that would accompany it. It didn’t feel like I could easily relocate. And then there were the various projects that come with owning a home. Despite being reasonably handy and too cheap to pay anyone else to do what I could do myself, I came to loath doing anything around the house beyond general cleaning. If the original paint hadn’t been so cave-like dark, I’m not sure if my 8 years of ownership would have even included repainting. I rarely did anything that I didn’t have to. Yes, when you rent, you’re putting money in someone else’s pocket but if you don’t enjoy these sort of tasks, you should ask yourself if owning a house is really for you.
In the end, I was lucky I was too cheap to sink a lot of money into my little piece of real estate. When I finally decided this part of the American dream was not for me and to reboot my life, the housing market was crashing around me. If I had sunk cash into hardwood floors, new bathroom fixtures, etc., I would have come out woefully in the hole. With house prices falling, it’s very doubtful I’d have recouped that investment. I consider myself to have more or less broken even, but honestly that’s only because I didn’t have to pay someone to take it off my hands. I didn’t leave with the buckets of cash I would have a year or two before.
This is what paints more of my opinion of home ownership. It’s for a group of people who want to live somewhere badly enough to ride out the tough times and who enjoy either spending money on home projects or are big Do-it-yourselfers. Otherwise, you’re very much taking a gamble that you’ll be able to get back what you put into it when the time comes to move on for whatever reason. I haven’t done any hard numbers (and am probably afraid to), but I don’t see myself following this path again. For me, I believe it’s either paying a landlord or being able to save up the cash to buy in the future. Mortgages for me are too much about wagering the future.
What do you think? Who is home ownership really for and should we encourage it for everyone as we have in the past?
I would say that home ownership isn't for everyone. I say that after owning three houses and I'm only 30. I feel my trapped now then when I had no mortgage and was putting money in someone else's pocket.
There are several reasons that home ownership doesn't work for me. The biggest thing that I noticed is that it makes taking advantage of opportunities much harder.
By the way, thanks for the mention.
I went through a very brief relapse where I nearly paid cash for a house available closer to what I consider home in the mid-state, but it passed. If I do buy another house, it will be like that one as I definitely don’t want a big mortgage again.
I definitely understand the trapped feeling, Nick, especially from those months after I left my job and was trying to get the house sold. Nothing like paying mortgage payments for an empty house!
No problem on the mention, I have a comment in there on yours. Your post really echoes my own feelings.
Hi Mark, just found your blog via Technomadia (I'm the one who suggested they should swap their RV for my apartment in Buenos Aires!), and I like what you're talking about here. I recently wrote about this dilemma of home ownership, especially for someone who is pretty nomadic. I definitely agree that home ownership isn't for everyone, and there are probably a lot of people who do it just because it's the next thing to do, without really questioning whether it's right for them. I own an apartment in Buenos Aires, where my fiancé and I are currently living, and it has its benefits–we didn't have to sign a lease, so we can come and go as we please, we can travel, rent it out or do home (or RV!) exchange, and still have a home base. But it's definitely true what you say about the other costs and projects involved in home ownership, and I definitely have days I'm not sure it was the best choice.
Hey Amy – thanks for dropping by!
I did think the idea of trading places like that was pretty novel! I'm sure there would be some insurance issues to work out, especially on a mobile abode, but none the less very out of the box – I like!
In my case with my old house, the covenants didn't allow me to rent. When I bought it that sounded like a great thing, living with others who owned their homes, less of the issues you hear about with renters. In the end, I wouldn't want a place with so many restrictions ever again. I wouldn't have relished having to keep it and rent it but given the economy today and how hard a time people have selling homes, it sucks to rob them of one avenue of escape, simply renting it and holding onto it until the economy improves! I'm just glad to have bid that particular American Dream adieu!
Not for me anytime soon again! Even if I plan to stay somewhere awhile, I don't want to be tied and I don't want the home owner projects again.
Hope you'll chime in on future posts – going to check out your site now!