Why I’m buying a house — even though I shouldn’t!

As if the title didn’t say enough, here I am, saying to you — all my dear finanshionistas– that I, Miss NewMoney am taking the plunge towards home ownership. Why now, you ask. Well, I’m a sucka for punishment and I just want to own something! Not exactly.

I have been saving for a house for six years now.  SIX YEARS!!! And I’m only twenty-three. It was hard work too — especially because I was living on the ultimate college budget and still paid a pay grade above youthful man servant. Never the less, by the time I started seriously looking for a home –let’s say Summer 2009 — I had saved enough for a down payment, potential closing costs, and a couple of months of living expenses. Suze Orman would be proud!

I was always confident when it came down to the money portion. I either had enough or I didn’t. One of the crucial parts of house buying is determining how much is “enough. And although my credit may have afforded me a larger house, it was the actual costs of living and my savings potential that dictated how much of a house I actually wanted to buy. Though it my have been one of the toughest parts –saving all that money– it was nothing compared to what I was to face in the upcoming months.

I initially wanted to purchase an investment house – one where I could live on one floor and have a tenant (or two) cover my mortgage.  I immediately realized that on the budget I had, around $60,000 to $120,000, I was having little luck finding a home in which I would feel safe living in let alone have a stranger live so close by. Hey, some of the streets of Philly are tough but priced so cheaply.  The budget had to remain the same.

D’Ya think I gave up there? Finanshionistas never give up! I still had my will and just needed to find another way.

SO I dug deep and decided to purchase a home for myself to eventually be rented out one day. I’ve held onto this lavish lifestyle dream of buying a house, living it for a few, and moving on the next one; never really settling until I’m ready for the big Queens Estate. “The Queens Estate” is my ultimate dream home and the home that I will begin a family in (children, husband, picket fence).

That brings me to lucky number three!!! Yes – this is the third house I’ve attempted to buy. The first one I will always view as the one that got away. I was completely content with the home and didn’t listen to my gut on how to approach the situation and ultimately lost the home. The second home was a disaster. The sellers Realtor was completely unprofessional and just stopped communicating for a few days at a time. Definitely someone I couldn’t trust nor move forward with. I also lost about $600 on this failed transaction. And number three seems to be THE one. Completely new everything, within budget, and an all female transaction team. Girl Power in full force with a female buyer and all female Realtors!

House buying seems to be one of the most controversial topics for personal finance bloggers and other experts. Older generations still view real estate as the ultimate investment. Where others view it as a ultimate sink hole, constantly sucking the money out of your Coco Chanel handbag. I took a different approach acknowledging all of the pros and cons of home ownership. I figured out what would work for ME and allowed myself to think BIG and not remain SMALL by comparing my situation as a mirror image of others.

Pause for an inspirational quote ….

Winners compare their achievements with their goals, while losers compare their achievements with those of other people.
– Nido Qubein

My goal was always to buy a house. Period.

Now, with that in mind let’s address some of the reasons “they” say you should rent forever. Most of the comments are indeed true! I can admit that. But because something is true doesn’t mean it should be a deterrent or a hindrance. It just means you need acknowledge it and prepare.

$ Renting Keeps You Flexible – Sure you can just pick up and move on a whim  – IF you are willing to forgo a hefty security deposit or can find someone trustworthy to sublet. I had a friend who sublet her place and the person turned it into a “rooming house” while she was away. But if I own a home in multiple states/cities, then can’t I do the same thing? THINK BIG.

$ Someone Else Does The Repairs – True, the landlord or property management company is responsible for fixing just anything in the home. But let me tell you, having dealt with both and having had to wait a full month for a working stove, if I never have to deal with either again it will be too soon. Plus, I’m going to hire a qualified professional and then well isn’t someone else doing the repairs in that case too? THINK BIG.

$ Owning A Home Is More Expensive Than It Looks – Absolutely!!! Owning a home is more than just covering the mortgage payment. It’s paying for the planned and the unexpected, insurance and taxes, and much more. If you never own a home and continue to rent this is the area that lends to some of the greatest economic differences between the two lifestyles. However, if you like a own a home, like myself, this is one of those inherent factors that comes along with the territory. The best way to manage this is to manage other aspects of your sexy, financial life.

$ Renters Insurance Is Much Cheaper – Renters insurance covers your stuff inside of the apartment whereas homeowners insurance covers your home, certain liabilities and other damages. I’d hope it’s more expensive than renters insurance. And with great package deals (home and auto insurance combined) things just may turn out alright. THINK BIG.

$ Home Prices Can Go Down Short-Term – and the world could end tomorrow. You cannot control how markets move. Do not waste your time on things not within your control. You can control the price at which you buy your house.  Famous investor Robert Kiyosaki of Rich Dad, Poor Dad advocates you should make your money going in. Meaning if a property is appraised for $150K and you purchase at $90K, then you would have made $50K going into the closing session. Additionally, invest for the long term and this will be taken care of!! I have ZERO plans on selling this house. I’m stuck with it for life! THINK BIGGER.

Now, no where in this article did I say that home ownership is THE only way to go nor did I say that EVERYONE must own a home. Renting for some is simply the way to go — mainly for some of the reasons listed above. The point is they made that decision for them and on their own. If you want to buy a house — and have good reason as to ‘why’ you want to buy a house — then go ahead. Read all of the reasons why people say you shouldn’t and make sure you address those reasons from within (are you planning on changing jobs any time soon? Do you have the money to pay for those expenses once covered by a landlord?) If after you perform your evaluation you still feel comfortable dropping $20k on a down payment, then by all means, go out there a shop!

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