A friend pointed out that realtors and mortgage brokers always ask you how much house you can afford and then go on to show you houses at the top end of that budget. Often we end up being house poor as there is no money left for travel or for maybe working less for awhile. Being over extended right from the beginning starts to build stress that often accumulates especially if something unexpected happens.
I think a serious talk about lifestyle and quality of life is how the house purchasing venture should start. Buy less house than you can afford and look at how you can improve it with a little work. Be prepared to paint, change light fixtures and other smaller items to update an older home. Replacing worn carpets with hardwood makes a huge difference and new appliances go a long way in updating a kitchen.
Anyone can become a real estate investor – the biggest difference is that you have to learn how to buy below market value and thereby instantly gaining equity. Since the money made on real estate is tax free (if it is your primary residence) this can be a significant investment for the future.
I would rather live in a cheaper house and be able to travel so this is my new goal – the best of both worlds.
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