File picture: James White

While tiny homes and townhouse living might be all the rage right now, you’re probably better off avoiding one. 

It’s hard enough to live with your always understanding partner in a one-bedroom apartment…But seriously, your thinking should be on the opposite end of the spectrum when it comes to buying a home. Buy more than you need, within reason.

The cost of a home is the single largest personal expense most people will ever face. Prior to taking on such a debt, take the time to do the math. After you run the numbers, consider your personal situation, and think about your lifestyle—not just now, but into the next decade or two.

Sure, you can save money with a smaller home, and reduce monthly housing costs, not to mention utilities, but it may not be worth it in the long run.

The dream home may be everything you've wanted at a great price now, but is it worth overextending yourself and your family? Will you be mortgaging not only your house but your entire lives as well?  The person who should decide if you can actually afford it is you.

Do not let price alone dictate your choice. Shaun Rademeyer CEO of MultINET says “We should all aspire in life to do a multitude of things well - to be a great father, to be a good husband, to be a good citizen, you know, to try to do things the best you can is very important to me. The same goes for when you are deciding on which house to buy. Always aim for the best,  a little bit more than what is comfortable for you right now, buy that dream house.”

Pros of Buying a Bigger House

  • The number one advantage of buying a larger home is the fact that you can grow into it. And chances are you’ll be growing if you’re in the market to buy a home.
  • After all, it is young families (or aspiring ones) who are often the ones to purchase real estate. While the two-bedroom condo might hack it for now, the presence of a little one will turn things on their head in a hurry.
  • Just ask anyone who’s ever had a baby. They’ll probably tell you that they should have bought a house instead of a condo, or that they wished they had bought just a little more house. Or one with an extra bedroom.
  • You rarely hear people complain that they bought too much house, though that can also happen from time to time.
  • Generally, people end up (emphasis on end) with more home than they need after the kids have left the nest, leaving aging parents with more space than necessary. The upside is this larger home can provide more of a nest egg for the retiring couple if and when they sell it and downsize.
  • A larger home also allows for more flexibility if you happen to go from being a W-2 employee to self-employed. If you all of a sudden need a home office, you can quickly convert one of the spare bedrooms.
  • The same goes for house guests. If you want to entertain, or merely provide shelter for guests from near and far, having an extra room or two can come in handy. That is, unless you want to sleep on the couch, or make your in-laws do the same.
  • A home with an extra bedroom (or bathroom) will likely fetch a higher sales price too, though you’ll probably have to pay extra yourself when you buy it. Of course, the appreciation will likely mean more money in your pocket when all is said and done.

At the end of the day, having too much home is only a problem if you can’t afford it. It’s not a bad problem to have, whereas too little home doesn’t leave you with many options. You might be able to rent out a room in a larger home to help cover the mortgage.

Cons of Buying a Bigger House

“I have focused on the positives of buying a large home, and like anything else, there are negatives as well.” Says Rademeyer.

  • Perhaps the biggest con to a large home is the large price tag. Put simply, it will cost more relative to smaller homes. And if you don’t need or use the extra space, it’s a waste of your hard-earned money.
  • Additionally, with a larger home comes more responsibility, typically in the way of bills. We’re talking higher heating and cooling bills, more expensive water bills, etc.
  • Oh, and when something breaks or needs repair, such as a roof, paint, etc., it will set you back more. And it will probably happen more often because the presence of more things increases the chances of said items going wrong.
  • Then there is decorating your new home. A large home will require a lot of (expensive) furniture, carpet, flooring, appliances, paint, artwork, and more. Conversely, a small home will make decorating a relative breeze.

Rademeyer states “Still, if I had to choose bigger or smaller, I would go with bigger. Remember, a home purchase is a major decision, and one that does not just consider where you are today. You need to think about where your life is going, how it might change, and what your future needs would be.”

For most people, this equates to a growing household, so you might as well prepare for it in advance, instead of being forced to buy a move-up property after home prices have already, and moved up.

But if you’re a single guy or gal, or even married with no plans to procreate, a small home (maybe even a tiny home) could suit you just fine!

Advantages of a Large Home

  • You can grow into it
  • You don’t need to move as your family size increases
  • Flexibility to make a spare room a home office
  • Space for out-of-town guests
  • Room to breath
  • More storage
  • Higher sales price (more proceeds from a sale)

Disadvantages of a Large Home

  • Unnecessary or unwanted space
  • Unaffordable if you overextend yourself
  • Higher utility bills
  • Harder to decorate
  • Need to buy more furnishings
  • More required maintenance
  • In-laws may show up a lot…

Everyone gets to the point where they want stability in their lives. Owning your own home gives you a set neighbourhood, schools and community that you can call your own. If every other thought in your head says this is the perfect house for you. You are consumed. You can't think about anything else apart from owning this house. Dinner? Who needs to eat? You need this house. You wonder if you should be committed or see a doctor. Yup, this is your house. Just do it.

PERSONAL FINANCE