Thursday, 2 July 2015

Reasons for Buying a Small House

Recently my friend bought a smaller flat and this past week, I got to see it for the first time, During our stay, I was surprised at how often my friend commented that they “ they just love their smaller flat”. I was not so surprised that he felt that way but I was surprised at the frequency of the comment, he kept repeating the same thing time and again.

I sat down with him and asked him to list all the reasons, why he is so happy in a smaller apartment the reasons he gave is what I like to share.

The main reasons people buy larger apartments/homes:
  •  They “outgrow” their small one.
  •  They hope to impress others.
  •  They think that a large home is the home of their dreams.
  • Another reason people keep buying bigger homes is that nobody ever tells them not to, nobody gives them the reasons that they may actually be happy in a smaller home.

So, let us try and give reasons why you`ll actually be happier in a smaller house, before listing the reasons let me narrate a story:

Warren Buffet one of the world`s richest man lives in a five bedroom house bought in 1958, today valued at $700,000 today , almost ten per cent Indians would be living in a house more expensive than that. The man whose known public wealth is $53 billion and counting can easily afford the biggest of the houses possible but believes that wealth is not created by investing but also by avoiding unnecessary expenses.

The inference that we draw out of this story is that we can be comfortable and happy in a smaller flat, and it could turn out to be a smart choice as well.

Now let us go through the reasons for buying a smaller apartment/house.

  •  Easier to maintain: Anyone who has owned a house knows the amount of time, energy and effort is required to maintain it, the bigger the house the whole effort of maintaining it gets magnified even more however a small house requires less of your time, energy and effort to maintain it.
  • Less Expensive: Smaller houses are pocket friendly hence are less expensive to purchase and subsequently the recurring expenses like maintenance, electricity bills, house tax etc. are lesser.
  • Less temptation to accumulate: If your house is small the temptation to acquire new things will be less since there will be no room, this will stop all the unnecessary expenses which you would otherwise do if you have a bigger house.
  • Increase of Nuclear Families: With the concept of nuclear family is on the increase in India a smaller flat makes more sense than bigger ones.
  • Less Debt: If you go online you will find so many sites on EMI calculators they will give you exactly how much you will have to pay every month as your EMI based on your net income, savings, if there are any current loans etc. You will be surprised to see that no matter what your net income is the risk incurred in buying a small house/flat is relatively less and the amount you would be saving can be used frugally somewhere where you get good returns and become financially stable and happier.
  •   Environment Impact: A smaller house requires less resources to build hence environmentally it benefits all of us.
  •  Family Bonding: A smaller home actually encourages family bonding because it results in family members socially interacting even more than it would in a bigger home, this brings families closer.
  • Resale:A smaller house is an affordable house that also means that it is also affordable to a large percentage of population making it easier for you sell it if you want to, effectively and quickly.

Buying a house is a very personal decision that you make and in a small blog you cannot sum up the all the factors, as end user or an investor only you will know all the variables that will come into play when you are making your decision.

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