To Buy or Not to Buy a House—It’s about More than Doing the Math

The following is a guest post from H.D. Carver at Your Finances Simplified.  Please join me in welcoming him to the blog today!


Home Ownership Considerations: To Buy or Not To Buy

I recently read a blog post attempting to reduce the home buying decision to a mathematical equation. While efforts to reduce momentous financial decisions to numbers, statistics, pie charts and formulas are laudable, they leave one exposed to the possibility of drowning in a lake with a mean average depth of three inches … a fate I would prefer to avoid!

Other Factors to Consider

It is difficult to argue against the prudence of thoroughly vetting your financial circumstances as a precursor to making any decision regarding buying a home. As a first step, determining affordability makes perfect sense. However, many other factors should be considered before you make the leap to home ownership. A few of these other factors include …

Understanding Why You Want to Own 

As Americans, we have grown up with the construct of home ownership as the ultimate expression of the American way of life—the American Dream. It is important for anyone contemplating home ownership to perform some honest introspection. Be certain that home ownership is, in fact, your dream and not something you perceive to be an obligatory act, civic, or patriotic duty. Post World War II, housing shortages were a fact of life and a driving force behind that generation’s aspiration for home ownership. We are in radically different times now. In short, make sure this decision is based on what you want and not on what you believe societal norms demands of you. One man’s treasure is another man’s trash.

Will Your Job Force You to Relocate?

Even though the numbers add up and you genuinely want a home of your own, working in a job with high relocation probabilities should give you pause. I bought my first home at 21 and seven short months later was faced with the decision to decline a promotion or sell my home. I was fortunate and broke even on the sale, but that is the exception … not the rule. If your line of work demands periodic relocation or if promotions hinge on relocating, home ownership may not be for you at this point in your career.

Increased Stress

Owning a home introduces additional stress into your life. If the plumbing springs a leak, the water heater craps out or the furnace goes on the blink, it is your problem. No more quick phone calls to the building super or the landlord … it’s all on you pal. How do you feel about the great outdoors? You’ll be spending a lot more time outside handling lawn care, cleaning gutters and shoveling snow. By the way, how much does a lawn mower cost?

Of course, there may be stresses that you escape with owning your own home, but they pale in comparison to those you acquire. You need to ask yourself if you have the disposition to deal with these added aggravations.

Home Ownership as an Investment

If there were any lessons to be learned from the 2008 financial crisis, it is that real property, particularly a single family home, as an appreciating investment, is no longer a certainty. Ask the thousands of homeowners with upside down mortgages. If investment is the driving force behind your desire to own a home, you may have better options.

Two Income Households

If the formula alluded to earlier was predicated on your income plus the income of your significant other, you may want to reevaluate things based on the stability of your respective employment. After all, if your job or your significant other’s job lacks a high degree of stability, you may be setting yourself up for a financial catastrophe. Consider waiting to buy; using that second income to increase the size of your down payment to a point that allows the mortgage payment to be serviced by one (surviving) income stream.

People with stable and meaningful lives will have stability and purpose with or without home ownership. Home ownership is neither a precondition to happiness nor a guarantee. Germany, for example, has very low rates of home ownership, but millions of its citizens enjoy fruitful and happy lives.

Make sure that when you’re considering home ownership you set yourself up for the American dream rather than a financial and emotional nightmare.


H. D. Carver is an American who currently resides in Cagayan de Oro City, Philippines. He has years of experience in the financial services sector and has served as a manager for Fidelity, as the vice president of a large regional bank, as the president of a financial services company, and as the Manager of Administrative Services and Support for the Aon Corporation. He has worked as a freelance writer for 4 years. Currently, he writes for Your Finances Simplified

{ 22 comments… add one }

  • Kalen @ MoneyMiniBlog May 9, 2014, 6:51 am

    I agree! I have always been really big on the fact that it’s more than the math behind it. There are so many reasons to want to buy a home and the same goes for paying it off early. It can’t be reduced to a mathematical equation.

    As far as an investment goes, a house is not as “safe” as some believe, but it certainly can be a great asset once it’s paid off. Plus, there is always investment property.

    Great post!

    • H.D. Carver May 9, 2014, 7:57 am

      Kalen … thanks for the affirmation! Also a big thank you to all the great folks who read the Brokeandthe BeautifulLife. I cannot recall having ever felt so at home as a guest poster. Thank You All!

  • Travis @debtchronicles May 8, 2014, 7:41 pm

    Owning a home hasn’t produced any more stress than would have occurred had I been renting. In the 10 years I’ve owned my current home, I can count on one hand the issues we’ve had that I would have turned over to a landlord: 1.) garage spring breaking, 2.) water heater breaking 3.) Washing machine needing repair. Would they have been any less stressful if I had to call a landlord rather than fixing on my own? Likely not….because I HATE depending on other people to fix things for me. Adding that level of indirection would have likely added more stress. :)

  • Vangile Makwakwa May 8, 2014, 3:11 pm

    It’s interesting that I read this article now because Im actually in the process of buying an apartment right now. I keep thinking if I had known what I know now, I would have taken my time and thought about it more because there are costs I didnt factor in when i started this process. That being said the reason why I’m buying is because my mortgage repayment will literally be similar to my 1 bedroom apartment right now and the place im getting is a 2 bedroom with living room and study and the neighborhood is excellent so you can say I lucked out. My advice to anyone buying is to see how your mortgage repayments impact your budget, and make your decision on what to buy based on that, especially in a one person household.

  • Brian @ Luke1428 May 8, 2014, 1:43 pm

    Home buying cannot be reduced to a simple mathematical equation. So many other factors go into it. I think many people fail to consider the other costs that go into owning a home. In the last three years we’ve replaced two air conditioning units, two furnace units, dishwasher, and stove. And that’s just the appliances…not to mention all the other maintenance and yard work expenses. The dream of owning a home can quickly turn into a nightmare if you are unprepared for those post-purchase issues that might come up.

  • H.D. Carver May 8, 2014, 10:43 am

    Tragic but true!

  • Marie @ 724 Credit May 8, 2014, 5:08 am

    My in-laws just purchased two condos in the big city last week, they said that they would make it as a rental property. I really don’t think if they made a good decision because they even didn’t studied it first before purchasing it.

  • Holly@ClubThrifty May 8, 2014, 12:42 am

    We live in an area with relatively low costs to own and high rents, so our decision is a no-brainer. The key to not losing too much money on real estate is not to move, I think!

  • Brent VOSA May 7, 2014, 10:26 pm

    As someone who is heavily invested in real estate I don’t look at my primary residence as an investment. It’s really teetering on the line of being a liability! It comes with property taxes, interest on my mortgage, insurance, repairs, upgrades, etc. etc. etc. Sure, it’s up nicely since I bought it, but unless I sell and significantly downsize or move to a new city I don’t really realize any of this gain.

    Now, when someone else is paying for your mortgage interest, property taxes, insurance, repairs and you’re cash flowing on top of that… now that’s what I call an investment.

    So who knows what you should do. Maybe a home with an income suite is the right answer?!?

    • H.D. Carver May 8, 2014, 10:32 am

      I can’t disagree with anything you’ve said. Viewing your home as an investment rather than a place to nurture your kids, enjoy your family and live your life, is an all too common mistake.

  • Brian May 7, 2014, 9:20 pm

    You are dead on with that dual income part. We did the math based on both me and my wife continuing to work full time are our current salaries when we bought, which if we could have a do over we would have re evaluated. Thankfully, we were conservative enough with our purchase price that it has still worked out OK, but if i could do it again I would have tried to buy a little bit cheaper.

    Home-ownership has its ups and downs, but I think for the long term it is a good decision. But its by no means the ‘slam dunk’ yes that conventional wisdom makes it out to be.

    Long Term Brian

    • H.D. Carver May 8, 2014, 10:37 am

      Thanks for the validation Brian. I think readers will take my point more seriously having read your comment. Thanks!

  • EL @ MoneyWatch101 May 7, 2014, 6:47 pm

    Great advice on homeownership it will be very useful for people looking to buy in the summer season. Another thing to consider is Keeping housing costs below 35% based off monthly income this will alleviate cash flow problems for new homeowners.

    • H.D. Carver May 8, 2014, 10:35 am

      I know 33% is the widely held view, but honestly, 25% has my vote!

  • J Rodriguez May 7, 2014, 5:24 pm

    I was considering purchasing a home, but after looking further into it I decided it would be better to continue renting for now. Maybe in the future…I’m just not ready to settle down in one spot just yet!

  • Shannon @ Financially Blonde May 7, 2014, 3:17 pm

    I actually advise clients all the time to NOT buy homes. Yes there are tax benefits; however, there are so many ongoing costs, and frustrations that are difficult to quantify when you first buy a home, but they can be significant. For me, I think the biggest motivator for buying a home should be a school district for your kids, other than that, you should think really hard if it is something that is right for you.

  • Soti @smartMoneytree May 7, 2014, 2:48 pm

    I agree its better to wait, save up more capital to put down and receive a more competitive mortgage. Like Andrew@LivingRichCheaply says, i too have many friends who reckon i’m throwing money away by not buying now. I live in London & property prices are ridiculously high. I’d actually rather buy outside London if i were going to in an attempt to seek better value for my money. Regardless, I will wait to see what house prices and monthly mortgage payments look like when interest rates start rising. They must eventually do so as we’ve had the lowest interest rates for 300 years here in the UK.

  • DC @ Young Adult Money May 7, 2014, 12:55 pm

    I always appreciate bloggers who tell people to, essentially “take a step back” and re-evaluate their home purchase. My wife and I purchased a home a year and a half ago and it has definitely been the source of stress! From plumbing issues to the biggest storm I’ve ever seen flooding our basement, there is definitely added stress there. The time responsibility can be sizable, too, especially if you are buying a ‘starter home’ that needs a little TLC.

    • H.D. Carver May 8, 2014, 10:42 am

      Excellent point DC! Owning a home can really take a bite out of your time, particularly if your financial circumstances make it necessary for you to handle your own maintenance needs.

  • Andrew@LivingRichCheaply May 7, 2014, 11:58 am

    Agreed. I’ve been renting for a while (living in NYC makes it hard to buy a place). I keep hearing from everyone that I’m flushing money down the drain. I don’t agree. But I do think that buying will be better long term if you have the necessary downpayment and plan on staying. As for it being an investment…I understand your point and never thought of it as an investment but with the demand for housing in NYC and the amount the prices soared…it is tempting to buy it as an investment.

  • Tre May 7, 2014, 10:30 am

    Good points about the additional stress of homeownership.

  • SavvyFinancialLatina May 7, 2014, 10:03 am

    The thing with new houses is that you can’t return them without any hassle and there are no reviews on the specific house you want to buy. I mean the buyer is not going to post he has a roach problem because then he couldn’t sell the house. He was suppose to disclose things, but sellers often don’t.


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