Is it better to buy and live in a house or an apartment/unit? How much money will I need to borrow? Perhaps a more important question is – how much time will this house cost me? This article compares the time implications of buying a house verses a cheaper apartment (unit).
Image: Simon Howden / FreeDigitalPhotos.net
For many the purchase of a house is the fulfillment of a dream, not the result of a rational decision. There are advantages to owning a house but here are a few reasons why owning an apartment may be better decision.
The benefits of owning a house come at a cost in terms of money and time.
Consider the following ways owning a house cost time:
All homes require maintenance time. However, considerably more maintenance time is required for a house than a unit. For example:
Based on time-use surveys in the USA, it appears that the average household living in a house spends at least an extra 4 hours a week maintaining their place than those living in units. That equates to over 200 hours a year.
That's 200 hours a year I could spend doing something that really matterered to me. Some of my friends see ‘raking the leaves’ and tinkering on the house as a relaxing break from their stressful week. I can understand that but for me I could think of a hundred other things I would rather be doing.
Think spot - How many extra hours are required to maintain a house over a unit? Sure, you could pay someone to do this work, but this is not an option for everyone. (Actually, if you had a unit instead of a house you would probably have more spare money to pay for home services.)
The more space we have the more we accumulate. People who live in houses tend to have more stuff, and this stuff costs more time and money to research, purchase, store, clean and maintain.
Consider the following - How many years of work are required to buy an average house? Say you could save $20K a year and wanted to buy a $500K house. Then that is 25 years to pay off the principle (alone), and then many more years to pay off the interest.
What do you need to give up pay off a mortgage on a house? People with large home loans (and to their credit) make many personal sacrifices to make their repayments. For example some stay at home during their holidays (or take no holidays), adopt a stay at home lifestyle and are forced to eat discount foods, etc. In order to make the payments many people take second jobs, or both husband and wife work full time to meet the financial strain and end up spending less times with their kids. Along with all of this is more stress.
Think spot – How many hours of your week’s work is going towards paying off your mortgage? If you were purchasing something at half the price, how would the numbers change? What could you do with the extra money that is not tied up in the house?
If you are a parent which option is better?
A. Raise kids in a house but spend less time with them.
B. Raise kids in a unit but spend more time with them.
For most of my life I have lived in houses. However, for the past 10 years I have lived with my wife (and now daughter) in a unit. For us the advantages of this ‘lifestyle’ include:
Further, time savings from living in a unit are often spent reading, exercising, and going out.
The unit that I own is about half the price of a local house, and consequently we were able to pay off the mortgage quickly. Instead of locking all our money into property (which is what we would have done in buying a more expensive house) we have been able to build a better investment portfolio. Our investments are spread across a number of asset types, of which property is one of many (instead of the only one).
This article is not meant to be an ‘attack’ on home ownership, but rather to hopefully create some thinking on the topic. Everyone's circumstance is different, and a house may be the best option for some, and a unit for others. In summary, it costs less time to own, maintain and repay a unit (apartment) than a house. The main benefit is that you have more time for other pursuits.
Do you own a house? Is buying a house a waste of time?
Comments
Living in a House gives a fuller life experience
Money issues aside, I think living in a house gives a fuller (or more real) life experience, especially to the children. There is a modern breed of people, adpated to unit living, which is particularly common in Asia because of the high population density there, that have been conditioned to believe life is supposed to be spotlessly clean, and things are always supposed to work. The sight of a snail and ants can scare the hell out of them.
I would hate to see my children grow up to become that type. I want them to see how things are interconnected (structures, earth, plants and animals), how they go wrong and be part of the action of repairing them. I want them to go around the house spotting all the different spiders and insects. I am not exactly a handy man. Still, there is plenty of fun to be had trying.
Wayne, you have a point, but
Wayne, you have a point, but many people today are living in houses that are very isolated from other people. There are suburbs where neighbors barely talk to each other, and it takes a quite a bit of driving time to go anywhere interesting outside the house. Family is important, but so are neighbors, friends, and the rest of the world. Living in an apartment/highrise is a good thing (as long as it's not in a violent area).
No Pets
I love living in apartments where there are shared places where kids can play and the parents can chat. Makes a difference if you have good neighbours. Also enjoy not having to do the maintenance and gardening.
Only thing I miss is not being able to have a really big dog. :)
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