House Hunting: The Just Right Home

Late summer is prime time for moving, ask any landlord to confirm it. This means a lot of you are struggling with decisions about whether, when, and where to move? It’s a delicate balancing act, and it helps to know exactly what to weigh and how to handicap the odds for the right result.

If you’ve ever tried to sustain a great-tasting diet on a budget, then you have wrestled with the Decision Balancing Act. You’ve stood in the grocery store staring down the aisles, trying to figure out what foods simultaneously taste great, won’t break the bank, and will help you to keep a fabulous figure. Finding the right apartment or house can be a lot like that. When dieting or deciding where to live, the Decision Balancing Act revolves around Function, Cost, and Delight. If you achieve all three, you found a perfect match.

Function. The first question to ask is the practical one: Does this home fit my life, now and in the future? Whether to buy or rent hinges on this decision. A rental allows you mobility in the future, a luxury not to be overlooked. If you have young kids, and the rental is near your work, their elementary school, and a nice playground, then your decision might be simple.

When buying, you have to think longer-term. What happens when the kids move onto middle school and high school? How convenient will the location of your home be then? So many of us muse for years about our dream house before we can buy it, and by the time we can, our need for the big yard with swingset may have passed or soon will, and we end up stuck in a spot that was ideal for an earlier stage in our lives. When we make decisions about buying a house, our future needs are one of the most important considerations.

The practical aspects of functionality have most to do with proximity, and proximity is what I consider the new real estate adage, replacing “location, location, location.” What’s the difference? Location tells you where something is. Proximity tells you what it’s near.

No matter how prestigious your neighborhood, your life will be more fulfilling the closer you are to the places you go in your typical day and where you want to spend your free time. The farther you have to travel to get where you want to go, the more your home has to provide to meet your basic necessities. (If you’re within a five minute walk to a café, you won’t need a high-end coffee maker in your home.) When your community offers amenities, it takes the pressure off your home to provide all of life’s requirements (and lowers its price). Consider the neighborhood and what it offers as if it were an extension of your home, and then you’re more likely to simplify the demands you place on your living space and to resist the temptation to compensate for an inconvenient location by overspending on outfitting your home.

Cost. If you can’t sustain the type of lifestyle you want and need because your monthly housing and transportation costs are too high, you are living beyond your means. This includes saving for retirement, paying for health insurance, and all the other things necessary for a tranquil economic life now and later. You’ll also want to have room for important experiences, such as that much needed vacation, summer camp for the kids, or a romantic dinner from time to time. The wrong housing decision relative to cost can ruin your financial stability and compromise your enjoyment of life for years to come.

As a rule of thumb, figure out your total housing costs, including utilities, and add transportation expenses to and from work, school, and other frequent destinations, and then divide this sum by your income. The combined housing/transportation costs should not exceed 45% of your take-home pay.

Delight. This is the fun part, but don’t make the mistake of disregarding it as nonessential. Your home may function well for you, ti may be in a perfect location relative to work and social activities, and it may fit well within your budget, but if you don’t feel a little pleasure every time you pull onto your street and walk through your front door, Home Sweet Home will eventually become a source of frustrations. I liken it to being in a relationship with someone you’re not crazy about. You may be able to go through the motions for a while, but sooner, rather than later, the cracks in your relationship will begin to show. A home may be inanimate, but your relationship with it should be comfortable in all seasons, reliably delightful, and growing and evolving along with you all the time.