A large part of building wealth involves delaying gratification. Therefore, you might find yourself wondering whether to buy your dream home now or wait for a better price.
But what if you wait too long and your dream home disappears forever? You might end up kicking yourself later for trying to save money when you could be living a better life today. Ah, the one that got away—one of life's big regrets.
At the same time, what if you buy your dream home and the price continues to go down in value over the next several years. You might also end up kicking yourself for not having the patience to wait just a little bit longer.
When you label a home as your “dream home,” emotions run high, which isn't ideal for striking a good deal. If you've found your dream home, chances are high that others want it too, often leading to bidding wars. But overpaying, as many did before the global financial crisis, can lead to regret.
This post will explore the dilemma of whether to buy the ideal home at an unideal price or wait for a better price. I’ll argue both sides and try to reach a conclusion with a logical framework.
Arguments for Waiting for a Better Dream Home Price
Here are four reasons why you should wait for a better price or better affordability before buying your dream home.
1) Plenty of Dream Homes to Choose From
Although you've found your dream home, know there are plenty of other dream homes out there. Financial discipline is key when buying the most expensive thing in your life. Think back to all the other homes you once thought were ideal. Even if you missed out, you still found new incredible homes. In real estate, there's always something nice that pops up if you wait long enough.
The reality is, there is no such thing as a perfect home. It could always be bigger, have better views, more light, more floors, more land, and more amenities. If you miss the current dream home, get excited about another one with different features waiting for you in the future.
You only have to wait 1-5 years before the next dream home comes to market. Or you might have to wait 12 years or longer, the average homeownership tenure, for that exact dream home to come up for sale again. While you wait, save aggressively and invest your down payment wisely. This way, you'll increase your choices and bolster your chances.
2) Losing Money on a Home is a Heavy Psychological Burden
Perhaps the most important reason to wait for a better price is to avoid financial loss. Buying at the top of the market can weigh on you mentally and emotionally. You may constantly scold yourself for not having the discipline to wait.
If you're unable to buy your dream home based on a responsible home-buying guideline, then you must not cross the line. Doing so could jeopardize your finances, putting your family, happiness, and entire future at risk. A home is just an asset to provide a better life. Use the dream home that got away as motivation to work harder, save more, and invest more aggressively.
I foolishly bought a vacation property in 2007 in Lake Tahoe, thinking I got a good deal, paying 12% less than the seller paid a year earlier. But the global financial crisis caused the property to lose another 50% of its value at the lowest point. I felt terrible about this purchase for a decade.
3) Real Estate Downturns Take Years to Bottom
If your existing home is good enough, what's the rush to buy, especially after a large run-up in prices? Real estate downturns always occur and take between one-and-a-half and three years on average to play out. In the past, downturns lasted around four-to-five years, but cycles are shorter now due to technology.
The dream home you're currently salivating over may not be available years from now, but there will surely be other dream homes in the future. During normal real estate downturns, inventory tends to balloon, giving homebuyers even more options.
Yes, the dream home will still garner a lot of demand in a downturn. However, the competition will be relatively easier. Every year you wait is another year of saving and investing for an even nicer home.
4) You're Young with a Highly Uncertain Future
To buy the dream home, you must be certain you plan to live in the area for at least five years, preferably 10+. If you're still relatively young (under 35) with an uncertain career, skip the dream home for now. Don’t lock yourself into an expensive asset in case your work brings you to a different city or country.
If you're still single or uncertain about spending a lifetime with your current partner, waiting until there's more relationship certainty is better. There's no need to buy a dream home if you've got nobody to share it with. Then again, your dream home might be a simple one-bedroom condominium with a river view.
In 2005, at age 28, I bought a handsome single-family home on the north side of San Francisco with all the money I had. Partly due to having a relatively large mortgage, I turned down a lucrative job opportunity in NYC. Selling the home in 2010 for a loss didn't feel good. I'll always wonder how my career would have turned out had I returned to NYC.
The feeling of regret will gnaw at you if you're not careful.
Arguments For Buying The Dream Home Today
Here are five reasons for why you should buy your dream home today if you can.
1) You're an Experienced Buyer Who Knows What You Want
If you've been house hunting for more than five years, you've seen enough homes in your price range to know what you want. If you've stumbled across your perfect dream home, buy it if your finances can support the purchase. Follow my 30/30/3-5 home buying rule.
If you've truly found “the one,” don't let it slip away! Fight like hell to buy the home because it may never appear for sale again. Prime properties in prime locations rarely turn over.
When these incredible homes get old, they can simply be remodeled with the finest new materials. Any contractor can do the remodeling, but few people can buy these types of choice properties because they are rarely available. In big cities, land tends to be more valuable than the building.
Experience is key in knowing the type of home you want. If you've already owned multiple primary residences over the decades, you're in the best position to identify the perfect dream home when you see it.
2) You're Tired of Putting Your Life on Hold
You're not getting any younger. If you let your dream home slip away, you may have to wait the average homeownership tenure of 12 years before it reappears, if ever. By then, how old will you be? Life goes on whether or not you decide to live it up.
Don't put your life on hold for too long just to save money. Even if prices go down after you buy your dream home, it doesn't really matter because you're living the dream! Your house is meant to be enjoyed first and looked at as an investment second. The longest you’ll likely have to wait until your dream home’s price stops going down is about three years.
Your vision might not last forever. Why not buy that dream home with panoramic ocean views while you can still see clearly? Your fur babies might only live for 12 years, so why not own a wonderful home with a large enclosed yard? You've delayed gratification for decades after studying hard in college and are sick of waiting any longer.
Your window of opportunity to do and enjoy things is much smaller than you think. Time will sneak up on you if you aren't intentional with how you spend it.
At 47, I'm unwilling to delay gratification any longer. Plenty of people my age die for unforeseen reasons. If I die with anywhere near my existing net worth, I will be greatly disappointed in myself for wasting so much time and working so much when I was younger.
3) You Have Young Children
The best time to own the nicest house you can afford is when you have children. Ideally, you buy your perfect dream house by the time your kids are three years old. At three years old, kids start to develop memories, and from age five, memories really begin to stick.
Once you lock down your dream home, enjoy it until your kids leave for college or go off on their own. Owning your dream home for 15+ years is a long enough time to ride through any real estate down cycles.
Chances are high, in 15+ years, your dream home will be worth far more than you paid. Even if your home's price is flat, if you took out a mortgage, you will have paid down a lot of debt during this period.
Having children helps better justify the cost of purchasing a dream home. The more heartbeats you can amortize the cost across, the cheaper the home gets. It's the same concept as feeling better driving a four-door sedan or SUV when you always have four passengers versus only one or two.
If you can buy your dream home when your children are young, by the time they are adults, it should be paid off. When they start their own families, you could gift one or all of them your home. Then you could right-size to a smaller place.
4) You'll Make Lots More Money After the Dream Home Purchase
You will most likely have to stretch to buy your perfect dream home. If you stretch too much, you will be house rich, cash poor, which is a stressful situation. However, if you plan to make a lot more money after your dream home purchase, then you'll feel better after every month.
If you know there's a large windfall in your future, such as your company's IPO or a large year-end bonus, buying a dream home today will be safer. Although, such windfalls are never guaranteed, so plan accordingly.
The longer you live in your dream home, the more you will be able to replenish your funds. The greater your funds, the less of an impact a real estate downturn will have on your mental well-being and finances.
Perhaps more comforting, the value of your dream home will decline as a percentage of your net worth over time.
A 30% Of Net Worth Limit
I don't recommend experienced homebuyers spend more than 30% of their net worth on a dream home for risk control and passive income purposes. At 30% of net worth, you will feel like your home is one of the most amazing properties ever. Once the value of the dream home dips below 20% of your net worth, you will feel a greater sense of security. Ironically, you may start itching to upgrade to another dream home.
Once your dream home declines to 10% of your net worth or less, it will no longer feel like a dream home. Depending on when you bought this home, you might be happy to just live in your home forever because “home is where the heart is.” You've made so many wonderful memories that leaving it may feel too uncomfortable.
To be a responsible dream-home buyer, you should have a Reasonable Income and Reasonable Net Worth before paying the suggested Home Price on the left hand column. You could have the Minimum Income or Minimum Net Worth for one variable, but not both. Click the chart to learn more.
5) It's a bull market and dream homes will only get more expensive
Here is a great dream home example at 4620 Kahala Ave, Honolulu, HI 96816. It features 6 bedrooms, 6.6 bathrooms, and 6,932 square feet of fully remodeled living space on a flat 13,500 square foot lot.
I toured it for fun in 2019 when it was listed for $7.7 million. The market for luxury homes was soft, and I was expecting the price would keep going down. It did, until it sold for $6.95 million in July 2020.
Then, two years later, on May 6, 2022, it sold for $8.795 million! Now, in mid-2024, it is back on the market for a whopping $9.75 million. Let a see if it actually sells anywhere near asking price.
In a bull market, dream homes can get bid up to nosebleed valuations, pricing you out forever. Hence, if you find your dream home and think prices will continue to rise, you might want to seize the opportunity while you can.
The funny thing about 4620 Kahala Avenue is that it's still not the perfect house. Kahala Avenue is a relatively busy street, the house is in a flood / tsunami zone, and there are only peekaboo views of the ocean on the second level. Meanwhile, the empty lots across the street could be built upon, blocking the remaining views and creating noisy construction for years.
Minimum Recommended Age Before Buying a Dream Home
With so many things to decide, at the very least, wait until age 40 or older before buying your true dream home. At age 40, you will have 22 years of experience after high school and 18 years after college. By then, you will also have likely already gone through the home buying experience at least once before. Your finances will also be much stronger than someone in their 20s and 30s.
Given your experience, you have a strong idea of what you want and what you don't in a dream home. Further, you're not as easily overcome by your emotions, such as real estate FOMO. You will make fewer unwise financial decisions in your 40s because you will have already made plenty up until then.
Age 40 is a good age to start spending on things you truly value. Given your life is potentially half over, time becomes incrementally more precious. You start thinking more frequently about your mortality after 40. You also think about the sad potential of dying with too much money.
After age 40, you may also be less concerned about always maximizing the return on your investments. Instead, you're more focused on living your best life possible with the time you have remaining. The experience of living in a dream home is way more valuable than trying to extract the highest return possible.
Of course, my recommendation of waiting until age 40 assumes you have a great chance of living the median life expectancy for your sex. However, as we all know, life is not guaranteed. If you think you'll die sooner, then you may want to buy your dream home sooner as well.
The Solution To Buying A Dream Home At A Better Price
Timing any purchase to get the lowest price is extremely challenging. Even if you have 100% conviction in your timing, there might not be a dream home available! If the perfect house does come to market, you could lose it in a bidding war due to high demand.
If you are over 40 and can comfortably afford to buy the dream home using my 30/30/3-5 home buying guideline, then put in an offer. Set your price limit and walk away if a bidding war escalates beyond your limit.
Ideally, for a better price, wait to submit offers for a dream home if the real estate market has been in a downturn for at least one year. If it hasn't been at least 12 months since home prices started declining, hold strong and continue to wait. This way, you avoid at least a year's worth of depreciation if you buy. If you can successfully wait for three years, and your dream home is still available, then go ahead and buy with conviction.
In a perfect world, the best time to buy your dream home is during the last month of a real estate downturn. But since you can't predict when that will be, remember that real estate downturns typically last between 1.5 and 3 years.
Once the real estate market starts rebounding, prices can get bid up quickly, potentially pricing you out of your dream home forever.
My Dream Home Situation
I finally found my dream home at age 45 in 2022.
After buying six properties and selling one, I knew exactly what I wanted to raise my family. So I went for it after 14 months of deliberation when the home came back to market under a private sale. In fall of 2023, escrow finally closed.
My family could happily live in our current home for the rest of our lives. However, after vacationing in Hawaii and seeing several dream homes there, I'm beginning to wonder what's next!
When it comes to real estate, there is ALWAYS going to be another dream home for sale. All you have to do is look at homes for sale one price point above. After all, there are homes that sell for over $100 million nowadays.
If you buy your dream home, enjoy it as much as possible. Stop searching for nicer homes as they might only serve to make you feel less appreciative of the one you have. The key to happiness is being grateful.
Additionally, celebrate your decision to spend up for a better life. You may have broken free from your hoarding mentality of so many years, which is a triumph in itself.
When the day comes, you probably won't wish you accumulated more money to bring to the afterlife. Instead, you'll probably savor all the memories of a life well lived and a bank account well spent.
Reader Questions
Is it better to wait for the perfect time to buy a house to get a better price? The dream home you want might not be available for purchase once that perfect time comes. Or is it better to buy the perfect dream home once it becomes available? The price of the home may continue to go down after you purchase it. However, you're able to enjoy the home in the meantime.
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Have you updated your 30/30/3 Home Buying Rules since ZIRP ended?
Just picking a random spot on the chart: Buying a 750k house at 3.0% vs buying a 750k house at 7% is a big difference for most people.
Even more so as you move down the levels, as it related to cash flow, month income, etc.
But I can’t imagine the calculations hold true when the monthly payment is 25-40% higher.
I have updated the rule from 30/30/3 to 30/30/3-5, with 5 = 5X your household income multiple for the dream home.
I have stuck with my overall guide, which means people should buy less house in a higher interest rate environment. I also think interest rates will continue to gradually come down over the next several years.
Since I wasn’t paying the bills, I enjoyed growing up in a 6BR/5.5BA, ~6,000 sqft. home.
But it left mom ‘house-poor’ after her divorce.
And given its age (circa 1920) the maintenance both inside & outside was a bear.
So I now live in a low-maintenance, 3BR/3BA ~3,000 sqft. townhome.
It was plenty big for my kids until they left the nest.
Plus with a major city recreation center across the street (tennis, soccer, basketball, pool) they had plenty to do.
Wow… that’s a nice big house to live in growing up! It’s interesting b/c I guess you could have gone both ways. Maybe b/c you grew up living large, that is what you would want for your kids too. Maybe it would have been if your parents didn’t get divorced and could easily afford it?
But the hard lesson ended up being good for you to help right-size your home to something more affordable and befitting. Always a silver lining!
“For this reason I would never own in that area as all your money is going into a constantly depreciating, expensive to maintain liability. Most homes in the US (as a whole) are not good long term investments.“ – Jay
I was thinking your Granite Bay post was meant to be serious and then realized you were just trolling when I kept reading.
The most important things in life are, of course, relationship, family and health. As for material things, a home that puts a smile on my face every time I come home to it is, to me, essential. And, since vehicles are a big part of the American life, that, too, should put a smile on my face. I got the expensive car bug out of my system relatively early on; I never regretted having the red Porsche for a few years. The car I drive now is more modest, but it does put a smile on my face, for other reasons. Same for our home. We splurged a bit, but it was more than worth it. And without a mortgage it turned out to be a great investment.
Whatever you do, the question to ask is whether the cost of the dream home would become golden handcuffs that prevent you from how you want to spend your time. If you know for sure you are willing to work for a dream home even under grinding circumstances, go for it but maybe think twice. If you are not sure, you may wish to make some compromise including waiting for better price or settling in a less dream home. Personally, a house for me is the comfortable place to enjoy with my loved ones. Equally important is the neighborhood you are in (decent neighbors and friendly community). Solidly built and functional and modest looking is good enough for me. Once you live in your dream house, what matters is not the view, the space, the fancy set up, huge garden etc., what really matters is the people living in the house with you that could turn the dream house into a happy dream or a nightmare. Same applies to the neighbors.
i think this all depends on your earning potential, and where you are in life.
If you are a doctor who does a procedure (say cardiothoracic surgeon) and you are in your mid 30s.
There is no harm at all in buying a dream home that is even 2000% of your current networth. Because you know for a fact that you are at the very start of your earning years and the curve will only go up.
so say you are making 350,000 a year, even with a networth of 100,000, you can easily afford a 2 million dollar home. it is only 5.7x your current income. And will drop to 5 x in a year or 2, and 4x in 5 years. with inflation approaching 2x in 10 years.
it all depends.
can you find a bank that would loan you that money? I am going to go with yes. But you might need the approval of a senior manager. But that person would simply be too happy to help a young doctor out, and make that business and personal relationship.
Perhaps, but it will be stressful if the doctor in your example does this.
Where will the doctor come up with the $400,000, 20% down payment, for the $2 million home if they only have a $100,000 net worth?
The thing is, lots of people are enthusiastic when they first start their careers. 10 years later, not so much due to burn out and changes in goals. There is a whole plethora of Doctor Personal Finance sites out there about doctors wanting to take a different path.
Here’s a podcast episode on Apple I did with a burned out doctor who relocated and changed paths.
Buying a dream home early could end up being a big albatross. People are consistently BAD at forecasting their misery. Better to be wiser and know what you want before making the dream house purchase.
Banks are notoriously willing to lend money to doctors. I am asserting / theorizing that a 100,000 downpayment would be sufficient. 5% is not the smallest amount of downpayment lenders are willing to accept.
It takes many years of schooling to become a cardiothoracic surgeon. Those people almost never change career. And the banks know that. And the banking officers love to befriend doctors. everyone needs a good doctor, eventually.
And in many cases this could be a great financial move for the doctor and the bank.
it is a known fact that people do get tired of living in a shoebox eating instant noodles.
Hey, to each their own. If a doctor wants to put $100K down on a $2 million home and have no liquidity buffer, go for it. They just need to make sure they work for a long time.
Knowing what you really want is powerful. And people don’t know what they don’t know until they have more experience.
i don’t disagree with you, but i am saying there are many many paths that people can walk.
Great article and a definite way to bring things into perspective, I mentioned to you before about purchasing a home on the coast of LA/beach area in the 2.5-3.5 million price range. My concerns long term aren’t necessarily a change in long term value but ongoing maintenance expenses as you mentioned in previous articles. My income and net worth are in the ideal ranges that you mention before, maybe I should just pull the trigger :)
Yeah, the ocean water and winds results in a lot more upkeep. Just get that marine paint and the best windows you can find and budget the maintenance stuff in your purchase.
9 months into my realistic dream home purchase, I feel great. And this is after just coming back from a 8 night vacation in Honolulu.
BUT, the first 3-6 months were stressful and full of second-guessing.
Appreciate the update and really enjoy all of the content … I have wrestled with this concept over the years… we are in the process of moving forward on our (close to dream house) and it likely borders on fiscal irresponsibility… 37 with 2 kids under 7…never spent more than 4500 on rent in my life before…NW is about 5M…with less than 1m in retirement accounts…I’m making $730Kish (pre tax)…live in a state with no state income taxes…. Income will stay consistent and likely trend higher with some decent visibility over the coming years… live in a HCOL area…spending about $120Kish annually (on non housing related) and in the process of building our primary home… house will cost about 3.5m all in and will be worth 4.5mish when complete….
Putting 1m down, So will have about 20% of my NW into the house initially and my NW will go up to 6mish on paper once built with the added equity… even after putting 1m down, my housing nut will still be about 240k annually which puts my all in expenses at like 360-380k… So with my income, after taxes, not really going to be saving much at all… I just look at it like I have banked the 5 already and even if I’m not saving at this point in my life, it’s not a big deal… I enjoy working and my income is very predictable, I can always unload the asset if I feel too much pressure or hopefully can refinance years from now…
Just psychologically, weird to go from saving multiple six figures a year for a decade to marginally cash flow positive… Also, seems crazy to be living in a $5Mish house with a net worth of just 6ish once the house is built and a more modest income in the context of my house value… Granted, I will only be in to the house for 3.5. Def feel some Stress and excitement. More stress, hopefully will go down as income/NW continues to grow. I will be just about 40 when we are moving in.
Howdy J,
What do you do? Being able to earn $750K consistently and liking what you do is HUGE. However, that still puts your new house at 5-6X your household income, which stretches beyond my 30/30/3-5 home buying guide. And I have a 5X multiple of household income for folks stretching to buy that dream home.
If you see yourself easily working for 10 more years, then you will probably be fine. However, going from $4,500/month rent to a $4+ million home is like going from a Honda Civic to a Ferrari SF90 Stradale.
From experience, I will say you will love your house. You will also be more motivated than ever to earn. However, I suspect you will be stressed for the first year. Just set your expectations.
Keep me posted!
Thanks for the quick response Sam! I will be
right around 5X income relative to the “all in” build/land value cost of about 3.5-3.7mish, but the value, once complete, should conservatively be closer to 4.5M+… while the end value of the house will be about 6X my current income, the out-of-pocket should be about 5X or just under.
I am certainly nervous about that and the likely inability to save much in the short term… I take some comfort that I will still have $4M invested on top of the $2M of RE equity once the build is done… I am not exactly sure how impactful it will be to be a meaningful net saver in the short term because of the current cushion I have… I also justify me “stretching” by the fact that, once complete, it will unlock an add an extra $1M of added equity to my net worth, relative to just buying a 3.5 M home at FMV…However, the ongoing cost and maintenance will be very meaningful. You are absolutely right about the Car analogy! We will be moving from a 1200 square-foot ranch to a brand new $5kish SF home in a tremendous neighborhood. I imagine it will be very exciting, but I will also feel guilty and a very wide range of emotions… Potentially, even embarrassed about living so lavishly. It helps that I have lived so frugally in the past. It will be quite the change for my wife and I Our house will also be middle of the road value wise in the context of the neighborhood and surrounding area.
It is crazy to think that I am causing some degree of financial stress when I could just hit the exit button and live a decent life passively off the 5M of assets and never really have to stress about the money. Instead, I routinely stay up at night, thinking about the updated math of my expenses.
I am a partner in a finance related business… High predictability of cash flow for the foreseeable future, no client makes up more than 5% of the business and I am scheduled to get additional equity in the business over the coming decade. I feel very comfortable regarding the consistency of my income and would assign a reasonable likelihood for increases (high single digit % annually) moving forward. It would be very unlikely I would stop working in the next 10–15 years.
At the end of the day, I should still be cash flow neutral at worst, would still have mid seven figures working for me in the market, hopefully should see some income increases and have a larger income by the time the expenses really start, could always refinance if rates come in or unload the asset.
I love all your rules for home buying. My wife and I bought land to build on. We check off all the boxes until we get to your 30% of net worth rule. Our current home is 25% of net worth and it does feel great. The new build (probably 2 years out) will be close to 45% of projected net worth. I’m almost 45 and wife is 39. What are your thoughts on it being that high? I would certainly have a new goal of getting it to where it’s only 20% of net worth!
My thoughts are you might feel stressed for the first one or two years. But the longer you work and save in build your net worth, lower the percentage will go overtime.l and you’ll feel better and better.
How many years of work do you have left in you?
Maybe in two years your net worth will grow a lot.
I’m not looking for FIRE, just FI. I enjoy what I do and will do it until at least 60, if not longer. Even then, I’d still work, just not as much.
So, 30% of net worth is “ideal” according to the table. Under what circumstances would you say the “reasonable” net worth is justifiable in HCOL areas? For example:
500K income
1M equity in current residence
2M net worth
Two pensions at retirement
What would be considered reasonable?
How old are you? A $500K income is high, but a $2 million income is low depending on how old you are.
Also depends on how much longer you’re willing to work. I would go with 50% of net worth for your home MAX.
52-years old Going to work 11 more years
In 11 years, what percent do you calculate the new home to be as a percentage of NW?
With a $500K income, I would aim for at least a $5M net worth in 11 years.
I would think that at least 2M is required for a dream home in Cali. So, 40% if a 5M net worth. However, a 2M dream home will not cost 2M in 11 years.
True. Unfortunately, I’m not sure of $2 million is dream house territory. It’s definitely not in San Francisco. Given the median home price here is $1.8 million.
Agreed. So, likely would need to hit 2.5M+ in ‘24 dollars. Can get you in 4K+ sf new construction on an acre lot in greater Sacramento region.
I’m sure there are nice parts of Sacramento. But does “dream” go together with “Sacramento” very often?
Notice how I said “Greater Sacramento.” For example:
“Granite Bay, California, has been recognized for its wealth and quality of living for several years. The community is known for its high median household income, excellent schools, and attractive living conditions. Historically, Granite Bay has consistently ranked among the best places to live, retire, and raise a family in California due to its safe environment and community amenities. Granite Bay is noted for its affluence thanks to its desirable location and upscale residential developments. This adds to its reputation as one of the wealthiest areas, not only in California but also across the United States adding to the the Allure of Granite Bay: “
Outside of San Diego and Orange County, tell me a better place in the country for a dream home (primary residence for somebody still working)?
We have extended family in GB. The pricier homes in the nicer parts of GB are huge (5,000SF++) and the land values are low relative to the structure value. For this reason I would never own in that area as all your money is going into a constantly depreciating, expensive to maintain liability.
How much are these 5k sqft homes?
I do agree to own property where the land is worth as many multiples as possible of the structure.
Prices are in the low to mid $1M range for very large homes. $300/SF to purchase a custom home is just covering the replacement cost of the structure. Although this is more common than not and why most homes in the US (as a whole) are not good long term investments.
Hi Sam;
We didn’t by our dream home and never really thought about what our dream home would be. Our priorities were, location, location, and location. We bought a tear down (minimal remodeling), next to a great park with lots of sport activities, great public elementary school and close to our work. We are still leaving in the same house. Property value has never dipped below our purchased price.
Also, are you and family still vacationing in Laie? I will be in North Shore area tomorrow morning, at our farm with relatives from Southern California. You are welcome to visit our small farm and pick fruits.
Ah, left on Monday morning! That would have been fun. We enjoyed petting and feeding the horses between Laie and Kahuku.
Yes, location is so important.
Real estate is such a fun and diverse type of investing. But the traditional way sure does come with big sticker prices. I thought long and hard over many weeks before buying my home. Even though I might move down the road, I’m really happy with my purchase and got in at a good time, which can be hard to do. Lots of great advice in your post. I’ll circle back to this if I ever decide to move again in the future.
I’ve always been under exposed as a single earner household in a volatile industry (finance). In 2001, I opened up a bit and bought a larger place on water and it has been all we wanted and more – however even then we were conservative.
Looking back I do wish we pushed for a larger home earlier and even got a nicer place in 2001.
However I have outcome bias and things went well for us and I did sleep a bit better – so I guess I have to remember why I was conservative!
Your chart with ideal income and NW tells me we are about 1/2 where we should be lol
Yeah, I think for most of us, we wish we bought a nicer home in the past. I certainly wish I did in 2003 when I decided to buy a property about 40% less than I could have bought.
What’s my net worth target suggesting you be at for your age?
At the end of the day, if we’re making progress and feel great about where we are financially, that’s what matters most.
I’m over your threshold for age. For my income it says I should have more in the ideal category – but don’t need the 8-10mm house lol. Lots of that income has really been increasing over last 10 years so the two don’t correlate properly but I have more than I think I’ll ever need. Interestingly enough it will prob result in me taking a chance professionally instead of FatFiring….