If you are in the market for a new place to live, then make sure that you are not ruling out small spaces. Bigger homes and apartments can be very costly and do not always ensure that you are getting the best value for what you pay for. A bigger place has its advantages. Large homes can hint at status or income, but bigger places have many disadvantages that should be considered.
When you finally decide on the home that is perfect for you, expect the costs to start adding up. If you take out a loan, then expect to pay a higher rate for your closing costs and borrowing fees for a big home.
Real estate agents get paid a percentage that is taken out of the purchase of your new space. The more you spend, the more they receive on their check. This is also something you should consider when working with a realtor to find an apartment. It is common for real estate agents to focus more on more expensive houses or to try to convince you to purchase a home that is outside of your budget.
This is not because they do not care. It deals more with how they benefit if your budget is a little bigger. Make sure that when you are looking for a new home, you try to be mindful of extra fees and benefits paid to your real estate agent and loan companies.
It is important that you always keep in mind your goals and values when looking for a new place. This will make telling your agent “no” a lot easier when they try to force a larger property into your options. If you are interested in learning how a bigger home will affect your monthly payments and upkeep as well as the risks associated with a bigger home, then refer to the sections below.
Upkeep
It is necessary for you to keep a clean living space no matter where you decide to live. If you find that keeping your small space clean is already hard work, then you will have an even harder time caring for a larger space.
It is easier to acquire dust and dirt in a large home. Property care and basic household chores can be especially complicated if you get a bigger home, making the upkeep feel like a never-ending chore.
A large home requires a lot of maintenance and attention in order to stay up to par. Expect to tackle all of this yourself, unless you are in a position to hire help. Keep in mind that you will be paying more for these services if you are living in a larger space.
Pricing
One of the main reasons people go into debt is because they cannot afford their homes. While your new space may be beautiful and spacious, you should never buy a home you cannot easily afford.
If you encounter a situation like losing your job that could put you in the position to lose your large home or apartment, then you should have a little cushion in your finances. When considering a new place, many people underestimate the hidden costs of buying a house and owning a home in general. If you want a bigger home, then you can expect the cost of bills to go up substantially.
The bills that you should consider include the following:
- Mortgage payments
- All types of insurance such as homeowners or renters
- Taxes
- Utilities
- Landscaping
Of course, the aforementioned bills are payments that you would have to keep up with should you want to purchase any home, but they will cost a lot more if you own or rent a larger space. It is important that you consult with your agent about your budget. Even if you think you can afford a house, there are other factors to be considered. You should constantly be checking the numbers to make sure you are comfortable with the amount you may spend.
Risk
You should know how much you should spend on rent or mortgage payments in addition to other housing costs before committing to a large home. After you commit to a bigger home, it is almost impossible to back out. If you do, then you will probably still have to pay a fee, making the entire process more expensive.
There are actually many reasons not to purchase a big house. A bigger home can be very taxing physically and mentally. Having a smaller space to occupy can give you more financial freedom and peace of mind.
Many people buy a large home because they can afford it at the time. But just because you can afford a big home now, does not mean you will be able to in the future or that it is the best decision. Before deciding on a big space, you should always consider your circumstances and how they might change over the years. Just because you have lived in large homes before does not mean you will always need to live in something of similar size. For instance, if you have children, then you should also factor in the fact that they will eventually move out and there will be no reason to stay in a house with a lot of rooms.
You should also consider the opportunity costs of buying a large space. You will miss out on investing money put into your residence. If there are alternative luxuries that you would like to spend money on, then you may not be able to. You should also remember that the larger the space you have, whether you are renting or owning, the more monthly costs are associated with the space. More than likely, a bigger house will mean a bigger mortgage payment, which can get in the way of saving or investing for retirement. If you know that you will not be retiring any time soon, then having a large home monthly payment can still discourage you from traveling or doing other activities that you enjoy.
When you are in the market for a big space, be sure to consider these disadvantages. If you still want to rent or buy a big house, then it is important to make sure you are being smart and reasonable about your decisions and doing it for the right reasons.
