It’s often said that a home will be the most expensive thing you buy in your life. And unless you become immensely wealthy one day, that places a significant amount of financial weight on your eventual decision in this matter.
Do you really want to buy a house instead of paying rent indefinitely? What are the costs involved? And considering the long-term nature of this purchase, what future trends project to impact homeownership?
Think relative
You know that buying a home will be a major expense, but it helps if you try not to think in absolute numbers.
Everyone comes from a different background, and your perspective and your range of financial flexibility will change over the years. What you value in a home and what you can afford will play out against each other with the fluctuations of the housing market in the background.
Appraise the numbers in terms of relative costs. For instance, housing arrangements are generally considered affordable if they comprise no more than a third of your budget. It doesn’t matter exactly how much money you make. If half of that goes to paying rent, financially speaking, you’re better off buying a home somewhere less expensive.
A house costs more than just the listed price. And there goes another relative number. Annual home maintenance expenditure is roughly 2% of the current value. Suddenly, going from asphalt shingles to metal roof installation becomes an opportunity to save significantly long-term costs.
So when you make the decision to buy a home instead of renting or take other factors such as location into account, see if these percentages fit into your computations. Check if the monthly bills give you enough wiggle room. And start looking into ways to drive down costs over time, not just the upfront ones.
Consider the big picture
Prospective homeowners tend to be concerned about trends in the housing market, and not without reason.
Homes are significant assets because of their value and relative lack of liquidity. They can appreciate over time, but only if you make investments with a good ROI. If you need to sell in a hurry because you’re relocating, for instance, you can’t wait for the market to swing in your favor.
But as with any form of investment, real estate trends are unpredictable. Beyond exercising good financial judgment, it’s futile to try to forecast the market.
Instead, you’re better off focusing on the big picture. Don’t think of housing trends, but consider global ones.
Sustainability is something every homeowner needs to be concerned about. Construction activities account for a large chunk of worldwide natural resource extraction and waste generation. How we build our homes and live in them is something that significantly impacts the environment. In turn, climate change threatens the durability and lifespan of our structures.
A low-maintenance home will help you to manage your finances better. But it’s not all about finding cost-effective materials or techniques. Green homes will help lower your carbon footprint daily and mitigate your impact on the environment.
Use green design
The trend towards greater efficiency in home design is growing in popularity. Among other things, this means that you’re more likely to find a qualified professional who shares this vision and can guide you through the whole process.
But if you prefer to have a greater degree of involvement, there are some basic principles to observe when aiming to build a cost-effective yet eco-friendly home.
First, build small. Many owners find that they have more space than they need. Extra rooms go unused or turn into storage space for stuff they also don’t need. It’s hardly surprising that decluttering has become a trend.
Smaller homes cost less, consume less energy, and require less maintenance. The cost savings can be reinvested into more durable materials, which is the second point. Going above and beyond minimum code makes a structure capable of surviving the extreme weather conditions we’ve witnessed in recent years due to climate change.
When it comes to materials, cost and quality aren’t the only factors to consider. Sourcing matters. If you can find a local supplier of quality reclaimed materials, you can save money while also lowering the transport-related emissions cost.
Finally, make use of passive design. In the northern hemisphere, having most of the windows face south can save up to 25% on energy used for heating. Landscape features, such as trees, can be used to provide shade in warmer climates. A rain garden can reduce water consumption by capturing runoff and pooling it for irrigation.
When the time comes and makes financial sense to plunge into homeownership, aspire to build one that’s green and low-maintenance. These principles will make the most sense in the long term.
