The challenges of buying a home
While buying a home (especially your first) should be an exciting and happy time (as I wrote yesterday), the road to home ownership is not always a smooth one. Like planning a big wedding, there are always challenges and disagreements along the way. My sister Marilyn has already experienced both the ups and downs of becoming a new home owner. And she hasn’t even moved in yet! She (like all new home owners) loves the idea of making her home truly hers. She has grand ideas of extensive renovations and fantastic visions of the many barbeques and dinner parties she plans to throw when the home is eventually ready. But then there’s the task of doing the renovations themselves, the challenge of finding a good tenant for the basement and last but certainly not least, securing the funding for the entire project. It’s funny how thinking about the financials tends to put a damper on the excitement of owning a home.
My advice to Marilyn was to take everything one step at a time. I told her not to worry about getting all the renovations done before moving in. Of course it would be ideal, but if your timeline or pocketbook don’t permit them to be done right away, the renovations can always be done gradually. The most important thing is to not over-extend yourself. Going from apartment owner to home owner is a big leap financially. Her fixed monthly expenses will likely be double what she’s used to. Everything from home insurance to property taxes to heating is more when you live in a house. It takes time to get used to all of the expenses associated with living in a house so it’s always a good idea to have a financial cushion (that’s where an emergency fund comes in handy) to draw upon.
At this point, I advised Marilyn to decide what her renovation priorities are. For many people, new flooring and paint are the basics. She could start with that and then work her way down her list of renovation ideas. Home owners (new and veterans) must remember that owning real estate can be a good investment, but if you continue to pour money into your home without determining whether or not you’ll get your money back when you sell, then you’re setting yourself up for disappointment (and financial difficulties) down the road. Ah, the joys of home ownership!