I happened to bump on an interesting read by Grant Cordone in her article I’ve been investing in real estate for 25 years, and I think buying a house is for suckers. I think the title was my main drive to reading it anyway, not because it was intriguing, but because it was a clear indication of how some of us are ill-advised. In my thinking, building the dream home should come as early in life as possible.
I will not bore you by going through the full article, instead, I will pick one or two quotes from Grant’s work.
“A home is not an investment because it doesn’t pay you every month. In fact, you have to pay it every month. That’s why a house is not an asset, it’s a liability. Nothing is a good deal if you have to feed it constantly.”
To a layman, this statement is in order, not to me. Allow me not to go into opportunity cost class, but before coming to this conclusion, did the author remember that if I was not in my house, then I would be paying my landlord the cash? Cash that I will never lay claim to? Every house, whether yours or otherwise is a liability. What sets my house apart is that it is under my name and thus any improvements I make on it is termed as value addition. I am yet to see an individual who used the flat he has rented as collateral.
Secondly, this analogy is so misplaced and should not be used in this case. For instance, your children more or less ask for cash every month without bringing anything in return, are they also liabilities? In as much as my dream house does not give me an income every month, I would never categorize it as a liability.
“The house, much like a college education, has been fed to you as the American dream. Really, it’s a middle class myth perpetuated by outdated thinking, politicians and mass media. Buying a house may have worked for previous generations but old ways of doing things aren’t viable in 2016. We are not in the 1950s, things have changed and people refuse to adjust.”
Another shocking way of thinking. How can one say that owning a home is a 1950’s thing? We may belong to a different generation, but where I come from, there is comfort for the family knowing that whatever happens, I have somewhere to fall back to. And there is that prestige that comes with “Building the dream home”, that I tried and made it. That in itself gives one the opportunity to take more risks in business and most likely make a kill from it.
My take on Building the dream home
I will admit that I was once in that school of thought until I got saved. I have come to see the light and deduce why owning a home is not that misguided. For once, your children have a compound to play without the dangers of public interference. Secondly, you can use your house as collateral for financial support from banks and other credit institutions. Finally, there is a freedom that comes with home ownership. It’s hard to understand it until you own your house or look at your parents and imagine how it would have been if you lived all your life in a rented apartment. And here is a challenge, show me one homeowner who is poor. Again, what pleasure comes with building your home when you are 50? Your children will have already moved on, and you will have seen enough in the world for you to take delight in building that dream home. The time is now, before your children get to high school. If you have the capacity to build that $50,000 dream home, don’t you stand there, start digging. After all, why earn it if you cannot spend it on something worthwhile?