Ahhhh, the American dream. Find a great job, make bank, and buy a massive house that brings a smile to your face every time you pull into your driveway. At least…that’s what we think the American dream is, until we actually experience it.
6 Reasons You Should Avoid Buying a Huge House
In 1950, the typical home size was 1,000 square feet and housed the average family size of 3.37 people. In 1970, the home size rose to 1,500 square feet for 3.14 people. And, in the year 2000, the average house size jumped to 2,200 square feet! And guess how many people live there? 2.62…
Basically, we Americans have decided that we need more than twice the space to house 1/3 fewer people…
I mean, I get it. Big houses are cool. They look prestigious from the road, they give you more wide open spaces inside, and when your friends come over you can just see the look of awe on their faces (which again, makes you feel good inside!).
Take a look at the homes below. Who wouldn’t want to own one of these? They’re beautiful! But, these fantastic homes come at a price. Six prices actually. I have discovered 6 reasons you should avoid a huge house.
1) The Huge Mortgage
The bigger the house, the bigger the price tag. And the bigger the price tag, the more likely it is that you’ll chain yourself to a 30-year mortgage. There are two huge downsides to this:
- You’ll limit your cash flow for 30 fricken years!
- You won’t be able to invest what you need to retire well
Basically, a huge house is just going to keep you broke! Don’t believe me? Check out this post: “How Much Should You Spend on That?”
2) Higher Maintenance Costs
Houses appreciate in value, which is a great thing, but they also cost money from year to year. Lights need replacing, furnaces need to be fixed, and rooms need refreshing. On average, you can plan on spending 1% of your home’s value each year.
If you own a modest $100,000 house, plan on spending $1,000 a year on maintenance and repairs. I don’t love the idea of spending this kind of money, but think of what you’d be spending on a $300,000 house! $3,000 a year?! No thank you.
3) More Time Cleaning
With a larger home, you’ve got more space to sprawl around, which can seem great…until you have to clean it all… Better tack on a couple extra hours to your weekly routine. You’ll need them to finish all the vacuuming, dusting, and window cleaning. Ummm, no thanks. Not for me!
Some of you might argue this point like I used to. “If you’ve got the money though, you can hire a service to come and clean your house for you! Sure it might cost $50 a week, but you can get rid of your household chores altogether.”
Yeah…this sounds simple, but having an extra person in your house to solve one problem might create many more. While I understand it’s rare, this additional “helper” could steal from you, could bring danger to your children, and could create an atmosphere for a future affair of your spouse.
I know, I might be stretching this a bit, but you just have to realize that buying a huge house doesn’t always bring happiness. It can very often lead to the opposite!
4) You’ll Always Be The Host
You’re the couple among all your friends that has that gorgeous house with huge rooms that are perfect for entertaining. So naturally, your friends typically volunteer you for all of the future get-togethers and parties.
This doesn’t sound so bad until you want to escape one of the parties early…. And then you realize that you can’t. You’re stuck. You still have to serve your friends for three more hours until everyone leaves, and then you’ve got to clean up their mess.
Ahhh the gloriousness of owning that massive house. Not…
5) Continued Pressure to Look Rich
Chances are that your huge $300,000 home isn’t among smaller $150,000 homes. Nope, the average house values in your area range from $275,000 to $450,000. The yards are always pristine and the homes always seem to be glowing when you pass by. Not only that, but the cars in the driveway are luxurious, new, and sparkling.
So what does this have to do with you? Well, after seeing the nice homes and cars all around you, what are the chances that you remain wise with your money and buy a simple domestic car?
Give it a year or two and you’ll find yourself sporting a new BMW sedan and SUV. Now you fit in perfectly…Ha, but not because of the BMW…because you’re broke just like everyone else on your street!
Have you ever seen the movie “Brewster’s Millions“? (My friend still mocks me to this day for liking this movie ;)). Monty Brewster receives an inheritance from his late uncle and suddenly everyone knows he’s rich. In one scene, Monty’s car gets hit, entirely by the fault of another man. This man runs up apologizing, then finds out who Monty is and quickly fakes an injury, hoping to steal a portion of his wealth with a settlement.
This isn’t always how life works, but there are plenty of creeps in the world that can’t wait to steal money from the wealthy by whatever means necessary. When you buy a massive house, you’re basically putting a target on your back saying, “Hey, look at me! I have a ton of money. Wanna steal it?”
Still Thinking About Buying a Huge House?
So what do you think? Are you still interested in buying that gargantuan property? Here’s the upside. You’ll be more comfortable in the larger space, and your ego will be satisfied for maybe a year or two.
And let’s remind ourselves of the downsides:
- You’ll be in debt for 30+ years, unable to breathe with your mammoth payments
- It’ll take more time and more dollars to maintain the home
- You’ll be volunteered to do things you don’t want to do
- It’ll likely lead to more purchases to keep up appearances
- And, you’ll be a target for scum and thieves just waiting for a way to take your money
So is it worth it? For Liz and I, we’re going to stick around in our 1,400 square foot home for a while. It’s paid for, it’s in a great area, and it allows us options that many others don’t have.
What about you? Do you think you’ll ever be buying a huge house?
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.