As more and more people are jumping back into the real estate game, it’s easy to want to get the most house for the money. To some, that means getting the biggest house possible and sinking the majority of their finances into the purchase of the home. Restraint takes backseat to conspicuous consumption and before you know it, those larger than life mortgage payments are arriving in the mail.
We’ve all been around this barn before. It got us, as whole, into the mess we’re into today with no room for any downward mobility, whether in the real estate market or our personal lives. Straddled with a monster mortgage often dictates how the rest of our “new home story” plays out.
As a designer, I see it happen to the smartest people. They’ve just purchased a new house that is the home of their dreams. They’ve stretched to buy the biggest house possible thinking it represents the biggest potential in future value. However, many homes need a lot more work before they become that warm, family gathering place that they’ve envisioned. Often, the homes that are the biggest bargain require some updating and renovating to bring it into the present. And if you’ve haven’t left yourself enough money in the bank to cover these costs, there’s a good chance you could find yourself “house broke.”
From a designer’s viewpoint, it’s better to have a smaller home and have it be well maintained and furnished. From the exterior landscaping to the interior design, it can create a lifestyle of its own. It’s not necessary to buy that lifestyle if you can create it yourself. With the right detailing, millwork, updates in certain areas like kitchen and bathrooms, new lighting and a fresh eye for design, a simple house can be converted into a designer’s bungalow. Creating character on a smaller scale is much less expensive allowing for more indulgences. Of course, having a good relationship with an interior designer and a landscape architect wouldn’t hurt.
So if you’re house-hunting, keep a few things in mind. It’s just not what the house looks like on the outside that counts. People are going to be coming into your home and what the inside says is more important that the outside. The old days of “keeping up appearances” has been replaced by having style and good taste. If you’re going to splurge for that luxury home, leave yourself room to finish the job. That may require another 25% for furnishings and, if the home needs work done to it, up to another 30-40% for the renovations and customizing. Anything short of that and chances are you’ll find yourself on the same side of the fence as the seller of your new house…having to offer the house at a bargain in order to sell it in the future. Done right, however, you’ll probably get a premium for it.
Buying a new home should be an exciting time. A little careful planning will ensure that when you’re all said and done, you’ll still be in a position to enjoy the lifestyle that you’ve created.