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Your New House: Investment or Money Pit?

Too many houses are money pits!

We need to make that money pit as small and as manageable as we can. That is most easily accomplished with homes that are green, sustainable and safe.

A home comes in two parts; the first part is the investment. With the investment comes its value as a family domicile, a place of refuge (if it is strong enough to be a refuge), and a place for the family to gather, work, struggle and grow together.

The second part of the house is the money pit. That’s the cost of maintenance, fuel, electricity and manpower it takes to maintain and operate a house. The money pit is where you throw hard-earned cash that’s never seen again by you, the homeowner.

Which way do you want to go? If you spend all your money on the house, the nice-to-haves will seriously diminish. On the other hand, you do need a safe and comfortable place to live. It’s a balancing act that everyone must perform.

Homes: Needs vs. Wants

When a family decides to buy a home emotions become involved. The home is generally the largest purchase a family will ever make. Many questions need answering:

  • The age, gender, special needs and interests of each family member?
  • The desired location: city and state? rural or urban? environment?
  • Family lifestyle and activities?

I am often taken aback when people come to talk about a new house and almost without exception they focus on how much they can possibly spend. They want to spend every cent they can get a hold of and every dollar they can borrow. Rarely do they ask themselves: What do we need?.

In my opinion, we should take a look at our houses in a new light. First, we should decide the baseline of what we actually NEED. Then we can add some WANTS, but we should always weigh the money we’re spending on the house against money we could otherwise have for savings, hobbies or a trip to some exotic land.

Another phenomenon that I see too often involves empty-nesters or near-empty-nesters planning a dream home with four bedrooms, four baths, a huge garage, a huge playroom, etc. for just two adults. They may spend money that could fund a child’s or grandchild’s education on a house they don’t need that may become an albatross for their retirement.

The best way to examine your needs vs. your wants is to do a Word Picture.

Design Considerations

Your Safety – At a Monolithic Dome Conference, Dave Passey, Public Information Director of FEMA, warned that hazard amnesia is rampant. He said that most people are in denial about the possibility of personally experiencing a natural disaster. But that is a very real possibility – one that our home should protect us from.

A home should be a safe haven. It’s difficult to put a price on the safety benefits of a Monolithic Dome. Knowing you’re safe during an earthquake or tornado is priceless. Certainly if a hurricane were to strike your house, you would easily see the savings if all you had to do was fix a window and mop while your neighbors were rebuilding.

Amenities vs. Nice-to-Haves – By amenities I mean lavish rooms and/or spectacular items. And by nice-to-haves I mean things that enrich your life or make it more pleasant: sizable savings, trips, cruises, horses, sky diving lessons, gym memberships, continuing education or whatever else is important to you.

But, in my opinion, a nice-to-have is NOT something that clutters your live or continually drains your resources.

For many of us, the most important nice-to-have is a savings account. Savings are important to a family and can be in the form of cash in the bank, IRAs or company plans, investments in rental units, etc.

Big Rooms vs. Small Rooms – For a child, consider the little bedroom. It can simply be a bunk bed with a desk under it, a closet, a window and space to walk back and forth. What does this mean? It means the child will use this bedroom for sleeping, studying and doing quiet things. If s/he wants to do things with friends, they use the living room where they are under adult supervision.

I find it interesting that parents who send small children to their bedrooms whenever they infringe on adult time later complain about teenagers who don’t want to spend time with them. Little folk don’t want to be sent to their rooms to play. They want to play where mama is.

In all probability, if you give a child a 500-square-foot bedroom s/he will quickly fill it with stuff that doesn’t enrich but takes away from what’s important.

Unless you frequently entertain large groups, over sized living rooms buy you very little. They are fun to look at, but that’s about all. Instead, you might consider planning a small living room for socializing, or a great room that can comfortably accommodate several activities, or a game room. In general, you’re better off with a few small rooms for specific purposes than with big rooms.

Fixtures and Finishing Touches – Young families sometimes mistake spending money on the house as worthwhile or enjoyable. But when was the last time you heard someone say, “Well we never got to go to Disneyland, I never got karate lessons, but we sure had terrific chandeliers and bathroom fixtures in our house”?

When it comes to picking fixtures, flooring, doors and windows for a new home, I have seen many a husband and wife pick expensive finishing touches that eliminate renting a boat for the summer. High-end fixtures are no better nor more functional than lower priced, quality fixtures.

Investing in a Monolithic Dome vs. a Conventional Home

In a stable economy – and please note that I’m saying stable economy – most homes are good financial investments. They are good because they usually go up in value if they were constructed well. This is especially true during the first few years when landscaping and beautifying takes place.

Location also makes a big difference.

Remember that money pit I talked about earlier?

Conventional houses have much higher maintenance and energy costs than Monolithic Domes, so more goes into the money pit and is rarely recouped when the home is sold. Money now is better than money later.

Monolithic Dome homeowners save in maintenance, utilities and insurance costs. Monolithic Dome homes are not only good financial investments but environmentally friendly, energy-efficient, green, safe havens that can be designed to fill your every need.

Note: We first published this article in 2004 and updated it in 2011.