Many people look to the time when they can get a bigger home.
Sometimes you just need more space. Some just want the bigger place. I see homes being torn down and re-built into much larger houses.
Thing is, when you buy a bigger house you aren’t just paying a bigger mortgage. With a bigger house comes some other expenses and costs that increase.
The question is, should you buy a bigger house?
If you have weathered the current recession and have the funds, those beautiful, large houses that were built just fifteen to twenty years ago may be tempting. Even if the price on a larger house is one you can afford, think carefully before upsizing.
With an upsize comes many other upsized costs. Keep reading and see why buying a bigger house may be more than you expected.
Here’s What You Can Expect to Go Up If You Buy a Bigger House:
Taxes
While prices have dropped on larger homes, they have also dropped on smaller homes, making the latter much more affordable, especially when you figure in the taxes.
Typically, the larger (and nicer) the home, the more you pay in taxes. More square footage for both your property and the house itself will translate into more you pay in taxes. And if you’re looking to move somewhere with a great school system you can see your taxes skyrocket!
Depending on the area of the country where you live, you could be paying several thousand more dollars per year in taxes by upsizing your home.
Utilities
Unless you are moving to a super energy-efficient house you will probably be paying more for utilities in a bigger house.
More square footage means more space to fill up with air conditioning and heat. More bathroom mean using more water. A style I’ve seen a lot in the past years is to have these high ceilings that go up two floors. They look wonderful! But they also mean a lot of space to fill up with air and heat. A LOT of space.
Oh, let’s not forget the bigger lawns that require more water as well.
Even if the price of larger homes is currently affordable, the utilities could cost several hundred dollars more per month for a big house versus a smaller one.
Maintenance
Simply put, there are more expenses in a larger home because there is more space.
Roofs don’t last forever. Gutters need to be cleaned. Air and heating systems need maintenance and will need repairs. Floors will be re-sanded. Decks need re-finishing. Because most appliances and utilities are larger to accommodate a larger kitchen in a bigger home, they will cost more to replace.
You get the point.
With a bigger house it means all the things you need to do for the house will probably cost you more.
Landscaping
Most bigger houses come with more land. Yay!
This means more to take care of as far as landscaping. Now you can take care of your landscape yourself but you still have to buy supplies and equipment (if you don’t already have) to cut costs from hiring someone to take care of it for you. Even so, you may find yourself upgrading to a high-end mower before long if you lawn is spacious. Things like seed, fertilizer, plants, and such all add up. And if you hire someone, the bigger your landscape, the more you are going to have to pay.
And again, the base of what you pay may be higher if you are moving to a more expensive neighborhood. You don’t want to be the one with the nice house but the bad lawn.
Furnishings
When you have more rooms you are going to want to furnish them.
The furniture you have from your previous house may no longer be adequate in the new house. Furniture tends to be expensive (and what you buy cheap tends to be…cheap).
For us, having a basement means a whole room that needs new furnishing. Or rather we update what’s on the main floor and move the old stuff to the basement.
Buying new, depending on the amount of furniture you need, can easily cost several thousand dollars or more.
Decorating
While some minimalists love blank white walls, most of us don’t.
Many people like to put their own touches on a home when they move in. If you want to renovate and buy new carpets or hardwood floors or even just paint the walls, expect to spend more money to do so because it is a larger space. There are also more windows to cover and more wall décor to buy.
Entertainment
Now that you have these nice size rooms, basements, dens, etc… you may find yourself upgrading your entertainment systems. Flat screens, sound systems, gaming systems…they all cost money.
Cleaning
If you are so inclined, you can choose to clean a 1,200 square foot home and get it done in a few hours. If your home is 3,000 square feet or more, it could take you quite a bit longer to clean.
If you choose to hire a housekeeper, you are adding on yet another expense.
Insurance
Home insurance is going to be more expensive for a bigger place. An insurance company needs to figure out the cost of replacing your home should disaster hit as well as replacement costs for the contents of your home. More square footage means more money.
Limited growth potential
If you move to a large house that is the nicest one on the block, you may experience limited growth.
The housing market has been down for a few years now; no one knows when there will be a rebound or if there will be a full rebound.
One thing is sure though, if you moved into the nicest house on the block, you have limited the potential increase in your home’s value.
Stuff in general
It’s a cosmic law – the more room you have to store stuff the more stuff you tend to accumulate. You find ways to fill up empty space. More stuff creeps into the house and stuff costs money.
Finally
I’m not knocking moving to a bigger house.
We bought a house because we needed more space with all our kids running around. You just need to understand that covering your mortgage isn’t enough when you are calculating how much house you can afford. All sorts of expenses creep up besides what I’ve listed and you need to be prepared for them. Make sure you have emergency funds set aside for the surprises that creep up. Figure in an increase in your general maintenance when moving to a bigger place. Knowing what expenses to expect now will help you prepare and save you from trying financial times later on.
While it is tempting to upsize into a nice, large home that may have previously been out of financial reach, think carefully about making this purchase.
The home price is only one consideration. There are many other expenses that come with a larger home.
I rated this article 5-stars. I had to do it!
Big doesn’t always mean better. My view is simple – the quality of a home matters more than the size. Likewise, the price of money is more important than the price of the home.
Perhaps consider purchasing a higher quality home in a better neighborhood, but I wouldn’t think for a second about buying a bigger home just because money is less expensive. The carrying costs of home ownership can be quite a strain on people who over-extend themselves thinking that the cost of a home is not important a day after closing…these costs are killers! Utility bills, property taxes, and simple maintenance all add up over time.
Heck, I don’t want to clean any home, even a 1,000 square foot home. Why would I want to clean a McMansion? Some times the most taxing things are those which cannot be easily given a price. Cleaning is, to me, a tax. I hate cleaning, so smaller is better.
Cleaning? How about having to shovel?!? Ughh, I can’t imagine having to shovel more.
Keeping your house/mortgage/utilities as a small portion of your monthly payments is key into building long-term wealth.
Too many people are house-poor and sign up for payments that they can’t really afford (well, they can afford the payments but they can’t do anything else. i.e. save for retirement).
The problem with buying a house now is that you also have to sell your current home. Which almost makes the trade-off a mute point. It’s a great time to buy rental properties and get a bargain though! 🙂
I think a big problem these days is people are told how much house they can afford and the people take that as an OK to buy that much house or more. Like you say, just because you can pay for something it doesn’t mean it’s wise if you can’t pay for other things.
All great points. I dated a few girls whose parents owned McMansion’s. I thought it was odd that there were so many rooms that were completely furnished, yet never used. I remember asking once, “what’s that room for” and the reply, “it’s the family room”. Ironically, in the 3 years I visited on a regular basis, I never saw anyone in that room! There is no need to continuous upgrading. be happy with what you have.
I have seen some pretty great deals on larger houses around my area and got myself thinking about this very topic. These are all good points to consider because I think a lot of people just get caught up in the allure of a bigger house without even thinking about these. It took us years to finally furnish all the rooms in our house when we upgraded from an apartment.
If one can trully afford a larger home then it’s clearly up to them to chose it. We upgraded from a 1900 sq. ft house with four kids to a 4100 sq ft. house with only 1 teen left. Why you ask? Well because we are thinking of the future as well as the present. We will have four kids having kids. Holidays will mean lots of people and I want plenty of room to have them with us. During the normal times of the year, I will have my craft room/spare room, Real spare room, teens room and our room. Of course the kitchen and family rooms are enormous and that is awesome to me. I’ll sweep as many times as needed and clean to my hearts content. To actually have a dining room that I can slide my chair out from under the table and not hit the wall is a dream to me, to have sex without my teen hearing would be nice as well (I’m not that loud) and above all to just look around and be happy with the home I have chosen because I just simply like it. How many times do we get to do that in life? Few and far between..
We went from around 900 s.f. to around 2100 s.f. We were not necessarily looking to get into a house of this size — we looked at, and tried to buy, a couple that were smaller, but this was the one that worked out for us. The maintenance costs are definitely a very big factor that I think people often overlook. Fortunately ours had a new roof, but we’ll be needing to repaint or side it before too long. We’ll also eventually replace the windows. I think a lot of people are naturally inclined to want to get the most for their money, but like you said, there is quite a lot of responsibility that comes along with a larger home. Getting a big house for cheap is not automatically a bargain. I have relatives who think I’m lucky because I live in a “huge” house (and really it’s not that big compared to the McMansions around here), but to me it’s more like a huge responsibility! Personally, I think layout is much more important than square footage. A well-planned smaller home can work great if it’s designed well.
Totally agree on layout vs square footage!
I agree on layout vs square footage as well. I also think a small house fully furnished and nicely decorated is better than a huge house with no furniture and no decor.
Utilities and maintenance have been our big expenses since upgrading to a large house, but we also decreased our payment (rent vs. mortgage) by 75%. Plus, we’re looking to rent the house out in 2-3 years, so we had to take that into consideration as well! so wish I had read something like this before we bought our house 🙂
Things like utilities and taxes can be tough because they can always go up. Maintenance…it’s just always needed in some way. Sounds like you have a plan to re-coup your house costs by renting it out. Just make sure you account for all of your costs in the rental price.
When we built our home 10 years ago, we went through this very thing. We love our home, and it’s worked out great for us. We can all be together and have family movie night…or we have enough room for us to have our own space. We even had a large recreation room for the kids’ toy room. The problem now is, as they’ve gotten older they no longer use a toy room. The only time that large room gets used (which is the lower level in our multi-level home) is when they have friends over. Eventually we plan to make it into a theater room, but I can envision when the kids leave looking around my house thinking “We don’t need this much space….”
That’s an interesting consideration Travis, what will you have when the kids move out? Thanks!
Utility costs seems to be one of the main things people overlook. Buying homes with 27 ft ceilings will add more to your bill than you think. I’ve always considered these things in my decision and I think I always will. Even if I was a multi-millionaire, I wouldn’t feel right about spending thousands of dollars each month on utilities.
My wife and I are considering buying a new home. I appreciate you mentioning that utilities are usually more expensive in a bigger house. We may just aim for a single-family home.