Big house or small house?

With mortgage rates rising, it’s smart to consider the size of your next home financially. From a financial planning perspective, larger homes often have more amenities and higher maintenance, cleaning, and utility costs. Being oversized also means higher insurance costs and property tax expenses, which can be net worth killers in combination.

In some areas, larger homes can appreciate faster than smaller homes, but it depends on the pool of buyers. Remember that millennials are buying smaller homes than the baby boomer generation in the 2000s.

If you have a large family, including adult children and in-laws, who want to live with you, having a bigger home might make sense. That said, planning the big purchases of your life around the whims of others is precarious at best. Let’s face it, we all know people in big houses with fully furnished rooms that sit idle for most of the year, and others who have anticipated an endless stream of late-night visitors that never happened. If you’re worried that your parents’ visits will overwhelm your reasonably sized home, you can always take care of their hotel bill for the weekend and pocket the overall savings of your good-sized home.

The ego comes into play. The perception of a big house is that you have to succeed. It can be a status symbol for some. Although I know many families living in modest homes with overflowing investment accounts. Putting your money into income-generating investments may make more sense than buying a McMansion. That said, you need to know yourself and your tendencies. Having a bigger house might make sense if you rarely travel. For families or couples who have a desire to travel and who travel as much as possible, the idea of ​​having a bigger house is incompatible with their way of life.

No one wants to be housing poor. Having an affordable home will help you overcome financial difficulties when the unexpected happens. If you’re planning to start a family, downsizing gives you more financial freedom. For example, if you buy a house that a single salary can easily manage, you’ll save more when both spouses are working and benefit from lower overhead costs in the future if one parent chooses to stay home with the children. .

The ideal home should suit you and your family, as well as a reasonable amount of your belongings. Location and factors like schools and neighborhood safety are some of the other critical decisions for your long-term enjoyment.

Whatever you decide, I hope your new home brings you joy and great memories!

Eric Tashlein is a Certified Financial Planning Professional, Founder and Financial Advisor at Connecticut Capital Management Group, LLC, 2 Schooner Lane, Suite 1-12, Milford. He can be reached at 203-877-1520 or by Connecticut Capital Management Group, LLC “CCMG” is a registered investment adviser. The information presented is for educational purposes only and is not intended to make an offer or solicitation for the sale or purchase of any specific securities, investments or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult a qualified financial advisor and/or tax professional before implementing any strategy described here. Past performance is not indicative of future performance. “CCMG” may discuss and display charts, graphs, formulas and stock picks which are not intended for use alone in determining which securities to buy or sell, or when to buy or sell them. These charts and graphs provide limited information and should not be relied on alone to make investment decisions. “CCMG” and Connecticut Benefits Group, LLC are not affiliated. »

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