We just recently bought a beautiful single family home. Before this, we lived in a townhouse. And before townhouse, I have lived in apartments. Buying a townhouse was a big step but buying single family home is a whole new beast.
First, buying a house is probably a sound financial decision. There are plenty of articles and research that shows people who own homes are financially better off.
But very few people talk about negatives of homeownership. And I think because lack of that information, a lot of people make incorrect decisions and end up regretting their home purchase. I did. I had huge buyer’s remorse the day we moved into our new home. I am still getting over it.
Here are some of the reason to not buy a house.
Some people love their “Forever Home.” Perhaps that works if you buy your dream home in your favorite city. The home we bought while great is not our dream home, especially mine. So when I hear forever home or 30 years of payments, I feel really trapped. I don’t even have words to describe the feeling.
Yes you can sell the it, perhaps even make profit. But transaction costs are high and if you bought the home right now, it seems prices are going down. So selling may end up costing you more than usual.
People like to fill up empty spaces even when they try to not. We lived in our townhouse for 9 years. We accumulated so much stuff. We realized that only during the move. Things that we will never use and have almost zero sentimental value.
When I lived in smaller space, I could not own so many things. So I regularly donated or sold stuff. That not only was financially better choice but also good for environment.
Now we have even bigger space and I can only imagine how much more stuff will end up keeping for no reason whatsoever.
People talk about how they want their kids to go play in backyard. But here is the truth, among my friends, only time they use their backyard is when they have a party. Maybe occasionally on weekends they will hit up their backyard with their family. But 6 days out of 7, backyard is just a chore.
Our townhouse had no backyard, but I took my son to parks after school quite often, more than, I say, my friends’ kids went to their backyards. Going to parks is also more social.
There are people who truly enjoy yard work, I see it in my new neighborhood. But most of them are old and retired. Yard work is great if you are bored and have plenty of free time. If you got kids and a job, then you don’t have time for yard work.
So you end up hiring someone else to maintain the yard that you will not really use.
What about a pool? Unless you are an avid swimmer, pool is another expense and a chore. Its only value is entertaining your friends.
I love water and spent countless days in our old community pool, made new friends there, exercised or just relaxed in there. Pool was so close to our townhouse that I used to say that it was our private pool.
Now we have our own real private pool. It was my idea to get a house with a pool. It was a huge mistake.
This private pool is not big enough for swimming. It is boring to chill in there by myself.
Only thing is that this pool would be great for parties. Very expensive parties.
My wife wanted a bigger house because she wanted to entertain bigger parties. Be more social. We just moved in here, so maybe we will have more parties.
But when I lived in smaller spaces, I was forced to go out. We met our friends outside, discovered new places, enjoyed “outdoors” life a lot more. Many times it felt like we were on vacation.
In this bigger space, our mortgage payment has increased significantly. We cannot afford to go out to restaurants regularly now.
Not only that but also there are more chores to do, so on Sunday instead of meeting up with friends, we are doing chores. So we are not even going to free places as much.
One of the argument for single family home is that it is good for kids. They have more space to run around. But there are millions of kids who grow up in apartments or smaller spaces and they seems to be just fine.
Maybe it is better for kids to go to parks and variety of different places regularly instead of staying in the confines of their property boundaries.
Maybe parents are so busy doing additional chores in a bigger space that they have no time to take their kids to anywhere. So they appreciate bigger space for their kids because it allows them to do all the additional chores.
That’s what common wisdom and data says. But still wondering if it really is with additional expenses. What if you just invested all that extra expenses & interest portion of your payments in your 401K.
Just to give you an idea for how much extra monthly expenses are:
| Expense | Townhouse | Single Family Home |
|---|---|---|
| HOA | $278 | $55 |
| Insurance | $100 | $350 |
| Water | $60 | $350 |
| Power | $50(Winter) - $150 (Summer) | $300 (during summer) |
| Mowing service | $0 | $120 |
| Yard landscaping | $0 | ?? (Still looking, mowing service doesn’t trim bushes or trees) |
| Pest Control | $0 (didn’t need it) | $20 |
| Pool service | $0 | $200 |
| Gas | $20 (Summer)- $65 (Winter) | $65 (Summer, probably pool heater?) |
| —————– | —————————- | ——– |
| Total | $580 | $1405 |
That extra $900 a month invested at 6% return rate would have yielded over $500,000 in profits over 30 years.
It gets more complex with interest payments, inflation, and home appreciation.
Please note this is not a financial advice. Just an alternate viewpoint.