First Home Buying

The Bad

Most of the negative aspects of owning a home tend to be outweighed by the positives over the long-term, but people with certain lifestyles might be less inclined to purchase a property for some the following reasons:
1. Homes Are Expensive
It’s a simple truth, but it’s worth thinking about. Buying and owning a home can be very costly, but renting can be just as pricey. You might pay less each month in rent than you would on a mortgage, but at least your mortgage is going toward something you know you’ll be thankful for down the road - your equity. Rent, on the other hand, goes to line the pockets of a landlord or investment company. That isn’t to say the property owners won’t put that money to good use, but when it comes to your money, the best way to spend it is lining your own pockets - even if you don’t see the benefits right away.

2. When Something Breaks, I’m The One Who Has To Fix It
If you’re like me, the thought of doing handyman work makes you cringe. I’m terribly clumsy and I have a more artistic mind than a mechanical one, so I’m always paying people to do things for me; professional people who I’m certain can do these things better and faster than I can. With all the things that can go wrong in a house, you can end up spending a lot of time and money trying to get it repaired. When you rent, you don’t have to worry about things like this. You call the landlord and they (hopefully) send someone to do the job.

3. You Have To Pay Taxes On Property
As one of the only two certainties in life, taxes can be a big turnoff for potential homeowners who would rather not fork over thousands of dollars a year in property taxes to the government, when they already feel like they give up so much in income tax. But think about it this way: your landlord pays taxes. So if she needs to set the price of the property you’re renting at a threshold that covers her costs, essentially that means you’re already paying taxes. Except instead of paying your own taxes, you’re paying your landlord’s taxes for them.

4. You Can’t Stay In One Place
A wandering heart can be a legitimate deterrant your first home buying experience. If you aren’t sure you want to stay in the same town or state, or if you’ve lived in lots of different places and are planning to keep up that way of life, you probably aren’t looking for things to tie you down. More often than not, home ownership is only a truly profitable venture down the road, when you’ve had time to build value in your home. You might not know if the town you live in is where you’ll end up, or you might already be planning your next great escape to a new locale. If this is the case, owning a home may not be for you - at least, not yet.

5. The Market Stinks
We’ve had a lot of this kind of situation to worry about over the past few years, and we’ve seen the markets volley from one end of the spectrum to the other. This can be disconcerting, and in fact many people have lost their livelihoods and everything they have when their homes were foreclosed on. We can take a hint from history, but even if it repeats itself you should protect yourself against a bad market by living within your means and maintaining a financial cushion - one or two months’ worth of finances. Still, you may find yourself in the position to buy and the circumstances indicate that it’s simply a bad time to do so. In that case, patience remains a virtue.

The Good

There are a lot of good reasons to own a home, and among the most popular of them are reasons that involve personal freedoms and independence. Take a look:
1. Homes Provide Shelter
Again I’m starting off with the most obvious point on the list here, but a good home really does keep you clean, warm and dry. But you’re also sheltered from the outside world, and everyone, no matter how extroverted, needs their own space sometimes. Owning your first home might be a means to get away from your oppressive landlord, or it could be your big leap out of living with an annoying roommate. Maybe you love your parents, but you find yourself getting old enough to live by your own rules. These examples are some of the big reasons why having your own home means comfort and shelter to so many people.

2. Keeping Up The Place
About a year and a half after I bought my first home, the heat pump stopped working. In order to find out what was wrong I had to call an HVAC specialist to come out and charge me an arm and a leg. He told me it was something that could be repaired, but it was such an extensive fix that I might as well replace the whole system (because it was getting to be that time anyway). Two weeks and several thousand dollars later, I had a newly installed heating and cooling system. My electric bills immediately went down by between 25-30% per month because the newer machine was so much more efficient than the old one was. If I’d kept the older machine and simply had it repaired, it would have been less expensive at the time but could have cost me hundreds or thousands of dollars over the next few years in electric bills anyway.

3. Tax Breaks On Mortgage Interest
As in #3 above, while you do pay property taxes on a home, you also get a pat on the head from Uncle Sam in the form of a tax deduction. Under federal law, you can deduct all the mortgage interest you pay (which is a large chunk of your monthly payment when you first start out) from your tax return each year.

4. Settling Down
Getting married and starting a family have their time and place. The place, before long, becomes somewhere you can be alone with your spouse; somewhere for the little ones to run around and be kids. This is along the same lines as shelter, but it’s unique because in addition to comfort and a roof over their heads, a home promotes togetherness and a sense of community within your family. You always hear people talk about “the house I grew up in.” The value of a home in this case becomes sentimental in nature; it’s the collective memory of every creaking stair, bedtime story and Saturday morning breakfast.

5. Opportunity Knocks
Remember that the way our financial systems function, the economy goes through cycles; it’s the natural progression of things, and in most cases you shouldn’t let it drive you away from achieving your goals without good reason. Often it’s when the market is at its worst that the most lucrative buying opportunities arise from the ashes. If it works out in your favor, more power to you. But don’t be overly focused on trying to ‘time’ the markets. Even if your home loses value, a stock portfolio can never keep the rain off your head and government bonds don’t come with air conditioning.