Frankly speaking I am not a big fan of the Kingfisher Villa or Mannat, not for the reason that I do not have a house like that but due to the(emotional) fact that I like simple things, like watching my kid's never ending creativity, observe my parents (and thank them) for their great value addition in my life and share thoughts and spend time with my wife.
So, if you are shopping for a house, the size of the house makes a key component of your decision. ‘Living life king size’, ‘Living Large’ or ‘Living Bigger’ does not definitely mean living better, and ‘going smaller’ does not mean sacrificing.
WHY BUY A SMALL HOUSE/APARTMENT…
A small house can save your money in many ways. Buying a small house is comparatively much cheaper than buying a large one. Besides this, there are a host of other financial perks attached to a small house/apartment.
1. Easy to build/purchase – The main expenditure in building a house is the land cost. A small house allows a person to have a smaller budget. A person can buy a small land near to city amenities and save lot on transportation and safety. If he is buying by way of a housing loan the outgo will be less in the form of interest payments.
2. Higher transaction time – It’s a global phenomenon that small property is sold in less time than the large one. This is because it is affordable and supply side of buyers is more. So in case of analyzing the relative liquidity, a small house is easy to sell and purchase.
3. Lower property taxes & property insurance cost – We generally fail to consider property taxes while purchasing large houses. Property tax is based on assessed property value and property value is based on price per square foot/meter. It is comparatively lower for small houses. Similarly the insurance cost for a small house is also low. Although insurance depends on a lot of other factors, but area is one of the major considerations.
4. Lower cost of maintenance - Small houses are easier and economical to maintain. For example, there would be savings in the material used and time in painting/whitewashing the house (due to less space) than a large house. Similarly replacing the floor tiles would definitely cost less in a small house. Further, there would be savings in purchasing cleansing materials as there is less space to clean. Also, there may not be requirement of domestic help or will require less aid to clear the mess of the house, thus saving on the monthly budget.
5. Less documentation - To build small houses, some of the building related permits are not required. This depends on state policy on housing. These include setbacks, side walls, parking space, height of building and story levels. But for a small house the documentation and required approvals will be less. Thus you can save valuable time and money required for seeking these building permits.
6. Lower utility bills - There would be great downsizing in electricity bills, water bills, etc. in case of small houses. Even the installation cost will be less as you will require a kw/h connection. Few rooms would mean less lighting and cooling cost, thus overall saving on the energy front(also environment friendly).
7. Lower ongoing medical cost- There are various reasons to prove that small homes may be healthier than large homes. Firstly, since small houses are cheaper than large ones, it reduces the financial stress on the house buyer. A person need not take huge loans and the stress to pay them off for buying small house. Secondly, it is easier to clean small houses. A clean house can avoid major diseases which are spread because of unhealthy surroundings like contaminated water, dusty spaces etc.
8. Save money on frivolous living- A small house has less storage space, hence you would purchase only those items that you actually require. You will not be interested in buying unnecessary plastics and wood. In fact you will be tempted to sell off things that you don’t require to keep the space free. Smaller spaces help in generating creative ideas to maximize utility of every square inch of the house.
Thus the advantages of a small house over a large house are pretty obvious and inspiring to those who believe in economical and simple living without much stress. Warren buffet advocates that “affordability” should not mean “expenditure”. It means that, even though you can afford, you should not pay more for what is not required.
He has practiced what he has preached and has been living in the same house he used to live when he started his career.
He has practiced what he has preached and has been living in the same house he used to live when he started his career.
Ninad Kamat
CERTIFIED FINANCIAL PLANNERCM
Image source: phanlop88 at FreeDigitalPhotos.net
Data Source: the financial literates.
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