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The Big Decision: Buy The House Or Start The Business?

There comes a time in our lives where we have to make some very important decisions; two of them being whether we should buy the house of our dreams, or start that business of ours that we've been planning. Although we may be lucky enough to do both, it would be unrealistic (and a little irresponsible) if we tried doing them at the same time. (Unless you're a gazillionaire!)

So which one should come first? Use your savings to put towards buying the house you have always wanted, and being able to say - this is mine. Or, start up your very own business pushing out a product or service that you have come up with?

Well, if you have enough funds saved, building up your business would be the best place to start. You can, of course, choose to agree or disagree, but here are all the reasons why we think so.

If you wait, you will have even more money ready for a house

If you already have enough money in your savings account to be able to put a down payment on a house, then you by far have enough to start up a business. Make what you're passionate come to life. You have the opportunity to get your idea out there - not everyone can do that - so make the most of it and invest your time and money on it while you still can.

The money that you put into it will pay off later down the line, making it even more possible to then buy a house. Plus that gives you plenty of time to think about where you want to live, the location, the style, and how much you want to (and now can) pay for it.

You don't want to end up house poor

If you're not familiar with the phrase ‘house poor’, it means buying the house from your wildest fantasies - one that is so stunning and something to be proud of - but it's so expensive that every payday, you barely get to touch what you earn because it's all being put towards the house on rent, maintenance, and the general upkeep of it.

If this happens, you may not be left with enough money every month for even the simple things like the weekly shop for groceries - meaning you're house poor.

Sure, you have the house, but is it really worth it if you're only managing to scrape by every month? - This can all be avoided if you buy the house later on when you have a comfortable income coming in.

If for some reason you do end up buying a house now though, just make sure you create yourself a realistic budget, and stay within that so you know that you can always survive through each month with ease instead of struggle.

Owning a home isn't always a good investment

If you buy a home for investment returns - don't. You may not be getting back what you thought you would.

Of course, a big part that plays into all of this is where exactly you live, and how well the real estate market is doing. But worst case scenario? Owning a home can offer you very low, or even nonexistent returns. So don't invest in a home if it was for that reason.

- Best case scenario, you hop on board at the perfect time when the industry is succeeding, and you come away with a decent profit - but bare in mind that if this happens, you were the exception.

Until you can sell - you're stuck

What if you've just bought a home, and are now starting to think about planning for your business, only to realise that you could have more success, interest and general business if you were in a different location? Maybe that be to somewhere in the city because there are more people, or because you're too far out of reach to all the local warehouses and distribution centres.

Now you have a home though; you can't just leave it. You're stuck until you manage to sell it, and that's never a quick process.

If you start your business first, you will know where you should be in terms of the location, as you will have the experience, and then you can plan around that.

Renting is cheaper than buying

This one can easily be argued, as a lot of people will also say that owning a home works out cheaper than paying rent, but if you do the calculations for the long run, that isn't necessarily true. - Here's an example.

Let's say the mortgage that you have to pay off will take you 30 years. It is very easy to see how this could look cheaper than renting. The rent is $1200 per month. The mortgage is $800 per month. - Mortgage obviously looks like the better option right?

But remember that the moment you own a home, it's YOUR responsibility to take care of everything. You have to decorate, you have to maintain it, and you have to pay for all repairs (both minor and major).

Now if you were renting, on the other hand, the owner of the property would be responsible for all of these costs, which essentially saves you a lot of time, money and stress. So you may be paying $400 more - but that's to ensure everything is done for you.

Plus, bear in mind that when you start up a business, when things start to progress, you will need a base. This can be anything from a warehouse to a large office space. In this case, you should look at your rent-to-own options.

That way you will be paying a little amount over a period of time, and then one day your business property (whatever that may be) will officially be yours. Then you can reel in all the benefits and rewards of having your own business, and not have to rely on anyone else. And when you start making a decent profit - you can start house hunting.