Is it better to buy the biggest house you can afford?

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asked Jul 2, 2024 in Real Estate - Renting by Retrool (900 points)
Is it better to buy the biggest house you can afford?

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answered Aug 9, 2024 by Gangass (12,870 points)
If your plan is to eventually sell the house for a profit then you should buy the biggest house you can afford if you believe that the price of the house will increase and is in a good area.

However if you plan to just live in the house at least 20 years or more then you should buy the biggest house you need that you can afford.

However don't just buy a bigger house that you can afford when you don't require all that space because the taxes, insurance and upkeep costs as well as heating and cooling costs will be more as well.

If your intention is to live in the house for a long length of time I would offer you the same advice as I took myself which is buy the best house you can for the maximum you can afford in an area you're happy to live - as long as you aren't overpaying.

In my experience of hunting, houses becomes much better value the more you spend and as soon as you are out of the value range that high-but-not-massive-earning couples can afford your ability to get more bang for buck increases exponentially.

So use your power of being an significantly above-average earner for the region and get that bang for buck!

If you're going to be there 20 years I wouldn't stress too much about finding a future buyer.

A bigger house usually has a higher price tag, higher property taxes, and higher utilities, maintenance, and upkeep costs.

So, ask yourself if you really need that extra spare bedroom or that huge kitchen or if you could be happy with a house that's not quite as large but that's more comfortably within your budget.

You should aim to keep housing expenses below 28% of your monthly gross income.

If you have additional debts, your housing expenses and those debts should not exceed 36% of your monthly gross income.

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