Success is something YOU should define for yourself. For the vast majority of us, we never took the time or had the courage to figure out what we want and what we think is important. Home ownership is a standard success moment for most of us. First, let me say I own my home. It was and remains the prevailing wisdom that once you have “arrived” financially (whatever THAT means!), you buy a house. And when you get more money you buy a bigger house. But as many of you now know,
a home can be an albatross that keeps you tied down fiscally and physically.
Not only have homes been hard to sell, they have lost value and many people owe more on their homes than they are currently worth.
Even in an ideal market there are reasons to question purchasing a home. The primary reason is financial. In addition to your mortgage, there are taxes and insurance. Home maintenance costs run between 1.5-4% per year! Most importantly, you may be able to rent and invest the cost differences and make more than if you kept your home and sold for a profit.
But success isn’t just financial. In fact, I think as you age it becomes more about time and freedom. Again, renting can trump owning because, generally, a landlord takes care of the maintenance and frequent yard work. If you want to live abroad for a year or two, you give a 30 day’s notice and pack up!
Like every traditional definition of success, home ownership needs to be questioned. If owning your own home is about passion and not finance, by all means DO IT! But if is part of your inherited definition of success, before you buy (or decide to keep or sell your home), ask yourself some questions about long-term dreams, finances and time. You might be surprised at the answers.
by Steven Schlagel