Every time we hear that question – do we need a bigger house - we can’t help but smile. We remember the story of a couple who went house-hunting one day. The husband wasn’t really looking to own a house because he had kids from his first marriage and he and his first wife had a large house sitting on even larger land that reminded you of rolling hills out in the open country – sort of like Virginia horse country. Putting a tennis court and a pool at the back of the house did not do much to take up space. There was still a lot of land left – maybe enough for three more houses.
You guessed correctly. The poor husband spent his days mowing the lawn, cleaning the pool, maintaining the tennis court, keeping the grass and hedges neatly trimmed and the front yard landscaped to perfection – so perfect that it deserved to be photographed for a glossy home and décor magazine.
But back to our story: the man re-married and his hope was to purchase a 800 square feet condo right in downtown and live happily ever after. Turns out his second wife had big plans – really BIG plans. She wanted a house “just like the one you had with your first wife. I also want an English-style garden, and an oversized gazebo in the backyard with a kidney shaped pool.” When she said that, he knew he was about to re-live a nightmare. He didn’t have the heart to question her if they really needed a bigger house because he was afraid of losing her or looking like a cheapskate. He divorced his first wife to get rid of the space and to kiss his lawn mower and toolkit goodbye. No such luck.
Strange that history has a way of repeating itself.
If You Need a Bigger House – There’s Got to be a Good Reason
A bit of common sense is called for. To answer the question – do we really need a bigger house - our immediate answer would be yes; that is, if you’re living in cramped quarters, you’ve got the extra cash, and your family is growing. No point debating this issue.
There as many possible answers as there are scenarios. We’ll review them one by one:
Scenario 1: young couple in their early 30s, both working, first child about to be born. They presently live in a one bedroom apartment downtown – a convenient arrangement since they can both walk to work. The bedroom is too small to put a baby in it, the kitchen’s tiny, and the living room is cluttered with memorabilia. Both have decent incomes, are university-educated and are being groomed for promotion.
Do they need a bigger house? Definitely. A child’s on the way and that child will need a separate bedroom. As a family, the living room has to offer the space to make mom, dad and kid bond comfortably. As upwardly mobile young professionals, they’ll be expected to entertain. Because the kitchen is tiny, entertaining will be awkward. They definitely need a bigger house out in the suburbs.
Scenario 2: A couple in their late 40s suddenly learns that they’re going to play host to their boomerang kids. That means not only their own 35-year old son who was downsized but his wife and baby, and their 28-year old daughter who decided to move back in because she could not afford to pay the rent (she split up with her boyfriend). To add to the family trouble, the ailing and aging father will also be moving in because the couple could not bear to put him in a facility. They have retirement funds saved up that they can tap should any emergencies arise.
Do they need a bigger house? Yes - again. In fact, it’s imperative they have a bigger house, or if they have enough land, they should build an adjacent smaller house either for the father-in-law, or the son and his young family. The house has only three bedrooms. They now need two additional bedrooms (at least): either build separate living quarters for the other members or buy a second bigger house.
Scenario 3: this scenario is the opposite of the previous one. Everyone has moved out, the husband no longer enjoys maintaining a large house, and the wife no longer wants to spend the rest of her days tidying up every room in the house. They’ve cut back on entertaining since they retired, and their children are all successful professionals.
Do they need a bigger house? Heavens, no! They should enjoy life and not have to vacuum so much or cut grass every weekend or shove heaps of snow in the winter time. If they enjoy traveling, closing the condo and leaving it uninhabited for days is no big deal.
Crunch the Numbers if You Need a Bigger House
When the critical decision is made to buy a bigger house, some number-crunching is in order. You need to estimate -
- The balance of the first mortgage
- The interest rates in effect
- Whether or not you will use an equity home line of credit against your first house or go for a straightforward home loan
- What your plans are for the first house: sell it or rent it out? If you sell it, how much will be left after the mortgage balance is paid off; if you rent it out, can the monthly rental income pay for the second mortgage and day-to-day expenses?
- How much will the second house cost? Does it have good resale potential?
- By how much will your payments for utilities, taxes, and maintenance increase per month?
- Is the purchase of the second property contingent on the sale of the first property?
- And the crucial issue: is your bigger house going to need regular upkeep and maintenance? Put another way , are you willing to put the time and energy to keep your house spanking clean?
If You’ve Started Looking for a Bigger House… Buyer Beware
Just because you’ve been through the first round before, don’t be overly confident that the second time will be a breeze. They say love is lovelier the second time around, but we don’t know if we can say the same thing about buying a second house – especially a bigger one.
Sometimes, we’re fascinated and then get carried away when we see how much more space a bigger house can offer, but a few months after moving in, you realize that your eyes may have been “bigger than your stomach.” Those bedrooms looked great and imposing, but they’re now taking up a chunk of your time; the double basement looked so inviting but your teenage son and his friends stay there on the weekend and by the time Sunday night comes around, the basement turns into a war zone. You put it back in order only to be taken apart again Friday afternoon. Your son’s friends have transported their band equipment into your basement and their practice is driving you crazy.
Watch out for the usual pitfalls. Monitor the interest rates, crunch those numbers as we suggested, and make sure the location of your bigger house is an excellent location – so if you decide after 15 years that you’re ready to downsize, selling it won’t take ages.
For the sake of good sense, ask yourself again, “do we need a bigger house” before you make a firm offer on that second house. Think twice, thrice – heck four times – because once you put your signature on the documents, you can’t back out…from all that space!
One more thing: many people put a lot of importance on appearances. Bigger is always better. But is being house-rich and cash poor also better?