If this is the first time someone has told you this, I’m sorry, but it needs to be said: MTV Cribs is not showcasing your first home. So, that’s great news, right? You don’t have to get any fancy entertainment system, have an incredible view, or any fun bonus rooms just because you have the space and funds to stock it with retro pinball machines. Dreams are fun, and if you want any of these things, you’re not alone. Having a dream home in mind is actually important when making decisions because it will keep you moving in the right direction, namely in the direction of your goals, so don’t judge yourself if a room full of pinball machines is your thing. But, beyond allowing yourself to want everything in your dream house in the first place, it’s important that you not judge yourself for not being able to have these features in the present moment with what you can afford when it comes to real estate.
Let’s think about another major purchase you’ve likely made: buying a car. If you’ve bought one with your own money, didn’t inherit it, and weren’t gifted one, it’s more than likely that there’s some things you wish your car did differently. Maybe it’s not so great in the snow, it doesn’t connect to your phone, or it’s just not flashy or luxurious enough. So, is the vehicle you’re currently driving your dream car? No, probably not. But, does it do what it needs to do, meets your needs, and gets you from Point-A to Point-B? I hope so. We’re willing to give these concessions to an asset that literally depreciates in value the second you drive it off the lot, so why are first time investors not willing to give the same amount of grace to an asset that only appreciates in value the longer you invest in it? It doesn’t make much sense when you put it that way, does it?
That doesn’t mean that you trash your car and intentionally neglect it because it isn’t what you ultimately want to drive. What do you do? Take care of it, ensure it’s running smoothly, and when your needs change – perhaps you’re adding a new member to your family, acquire a mobility issue, or even take up a new hobby and need a car that can hold your surfboard – you get a new car. The same is true for your home.
A lot of first time homebuyers have a grand vision for their life: a certain number of kids, a lifestyle they’d like to lead, what environment they’d like to be in in the long term, and they’re typically envisioning staying in this place forever. Why start up a thirty-year fixed rate mortgage somewhere you don’t want to live for the next thirty years? Well, the good news is that a mortgage isn’t a legally binding contract saying that you have to live in the same place for thirty years or else. Like the idea of your dream car v. the reality of the car you’re driving right now, there’s no use putting off having an asset that gets you what you need for the hypothetical possibility of being able to own your dream home.
When your dream home includes a pool, land, mature fruit trees, and within zoning for a good school district, it may seem foolish to buy a condo that has none of those things. But, if you apply the same reasoning you used to buy a car by plainly assessing your needs at the present moment, what do you actually require in a home? Not that many rooms? A little bit further away from the office since you’re going hybrid or working entirely from home? When you stop looking at your dream life and your dream home and start embracing your life as it is, there are possibilities that open up for you when it comes to investment. Future you doesn’t exist and will never live in any home they own outright instead of rent if you don’t start building a history of home buying somewhere. No one gets punished for changing their mind and people’s needs change constantly. So, when you start needing more rooms or maybe you get a pet that requires a large yard, you can move out of that condo, but until then, that little box is just as good if not better than your first car: charming in its newness, maybe a little bit wonky, but will be oddly romanticized in retrospect. It will reflect a life you once had that you will remember fondly as you continue to evolve and grow as a person.
In the meantime, once you invest in that first home, you can take to making conscious improvements on it: start planting a garden if fruit trees were on your vision board, get into landscaping, paint that dull fixer-upper a fun color. Of course, it’ll be good to get a return on this investment when you inevitably sell, but moreover, it will bring your first home closer to being your dream home. Even though you can’t have everything you want in this first investment, that’s not an excuse to not put a lot of love and care into your home. Homes are so vitally important to the overall quality of life.
As with anything, getting anywhere going from zero to a hundred miles per hour is a one-way ticket to a short ride that’s over quickly and leaves you nauseous. There’s nothing wrong with a little bit of delayed gratification in the name of making small actionable steps towards your overall goal of owning your dream house. Slow moving progress is still progress. Nothing in life is ever instantaneous. Your dream home is out there, and if you’re lucky enough, you’ll live there one day. In the meantime, you need to live somewhere else, and when it comes to that somewhere else, it’s infinitely better to own it than to rent if you’re looking to invest your money wisely.