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Is It Financially Wise To Have Your Own Home? - Properties - Nairaland

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Is It Financially Wise To Have Your Own Home? by Reflector: 8:35am On Jun 15, 2011
What do you think?
Re: Is It Financially Wise To Have Your Own Home? by Nobody: 9:07am On Jun 15, 2011
its beats inflation, the value of money you will get in future from real estate assets will be useful money. so its a wise investment.But its a basic need
Re: Is It Financially Wise To Have Your Own Home? by Reflector: 9:29am On Jun 15, 2011
Hmm okay I agree with you Olasu to an extent. Yes the value of the property goes up with time but how many of us really sell houses we sweat to build? Very few!. Our children on the other hand don't have such qualms hence they sell freely without any sentiments when they eventually inherit the property from us.

Years back when I finished building my own home I did a comparison between the money I spent on the project and my current rent in the 3 bedroom flat I was staying and discovered that the money I spent in building my own home would have paid my rent for 100 years!!!!
Re: Is It Financially Wise To Have Your Own Home? by maclatunji: 9:42am On Jun 15, 2011
It makes a lot of sense to build your own home. However, what we have in Lagos is that people tend to waste money building houses they cannot maintain. Before buying land and building a house. You must identify the purpose for which you are buying, is it to take advantage of projected increase in property values, to get rental income or to express yourself as a successful individual?

Your clearly defined primary motive should be the deciding factor in  terms of the type of property you build. For most people in Lagos, building a block of 4 nos 3 bedroom flats is the most ideal in terms of return on investment. You live in one of the flats and let the rest to get good rental income.

However, what we find most of the time is that people might want to build detached houses, duplexes or bungalows which for the most part are uneconomical.

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Re: Is It Financially Wise To Have Your Own Home? by Reflector: 9:51am On Jun 15, 2011
maclatunji I think the worse mistake anyone can make is sharing a building with tenants (building 4 flats and staying in 1 of them). Some tenants could be a pest and would run to you for every little thing. Others may be a nuisance and disturb your peace of mind. My advice is to seperate your personal home from those for tenants.
Re: Is It Financially Wise To Have Your Own Home? by maclatunji: 9:55am On Jun 15, 2011
That is not much of a problem. Let all the 4 flats out and in-turn become a tenant somewhere else. It might be strange to some people but it works. Otherwise, build yourself a bungalow in addition to the block of 4 nos. 3 bedroom flats. Live in the bungalow and collect rent on the four flats.
Re: Is It Financially Wise To Have Your Own Home? by Nobody: 10:48am On Jun 15, 2011
Lack of institutions to support real estate are the reasons why people dont sell,and cultural matters affects selling.
Re: Is It Financially Wise To Have Your Own Home? by maclatunji: 11:08am On Jun 15, 2011
olas2u:

Lack of institutions to support real estate are the reasons why people dont sell,and cultural matters affects selling.

Very true!
Re: Is It Financially Wise To Have Your Own Home? by Fhemmmy: 1:15pm On Jun 15, 2011
Yes, it is Financially best to have your own home.
It is a roof over your head.
It is an investment
And an asset never a liability
Re: Is It Financially Wise To Have Your Own Home? by Reflector: 2:27pm On Jun 15, 2011
For me an asset puts money into my pocket while liabilities take money out.

By this definition owning your own house is not an asset. you might think that since you don't have to pay rent then indirectly it keeps money in your pocket but if you compute the yearly cost of living in your own house (acquistion cost/no of years you think you would leave in it) most often than not the amount is more than what you would have paid as rent elsewhere. In addition you would need to carry out regular maintenance such as fixing plumbing problems, painting etc add this up and you would discover that more money is spent living in your house.

For me the benefit of living in your own home is definitely not financial.

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Re: Is It Financially Wise To Have Your Own Home? by Fhemmmy: 2:34pm On Jun 15, 2011
Reflector:

For me an asset puts money into my pocket while liabilities take money out.

By this definition owning your own house is not an asset. you might think that since you don't have to pay rent then indirectly it keeps money in your pocket but if you compute the yearly cost of living in your own house (acquistion cost/no of years you think you would leave in it) most often than not the amount is more than what you would have paid as rent elsewhere. In addition you would need to carry out regular maintenance such as fixing plumbing problems, painting etc add this up and you would discover that more money is spent living in your house.

For me the benefit of living in your own home is definitely not financial.

Money in your pocket is not always liquid cash . . . . a house is more than cash in your pocket, and you could turn it into cash anytime
Re: Is It Financially Wise To Have Your Own Home? by cinzo: 2:45pm On Jun 15, 2011
Let me give you this illustration. I know a guy who built a house while he was financially buoyant, along the line things became so hard cos contracts were not forthcoming. If not for the house he built in Lagos that he was staying in, he might have been forced to relocate to his village.

So once you have the money, build your own house, it just might come in handy one day!
Re: Is It Financially Wise To Have Your Own Home? by Fhemmmy: 2:52pm On Jun 15, 2011
cinzo:

Let me give you this illustration. I know a guy who built a house while he was financially buoyant, along the line things became so hard cos contracts were not forthcoming. If not for the house he built in Lagos that he was staying in, he might have been forced to relocate to his village.

[size=18pt]So once you have the money, build your own house, it just might come in handy one day!
[/size]

It will surely come handy one day.
Cos if your job no leave you, you would leave your job one day.
when that happens, only your investment will carry you going.
Re: Is It Financially Wise To Have Your Own Home? by cinzo: 2:56pm On Jun 15, 2011
Fhemmmy:

It will surely come handy one day.
Cos if your job no leave you, you would leave your job one day.
when that happens, only your investment will carry you going.



He who has ears let him hear! grin
Re: Is It Financially Wise To Have Your Own Home? by atasteve: 3:49pm On Jun 15, 2011
@Fhemmmy and Cinzo, hhhmmmmmmmmmmm. So so true talk.

Personal house is always a saving grace since things change in our world.
Re: Is It Financially Wise To Have Your Own Home? by Reflector: 4:10pm On Jun 15, 2011
I agree with you folks that we all need to own a home in order to secure a roof over our heads and provide security if we fall on hard times and cash is no longer rolling in. for instance when you retire your persion may drop to less than half of what you used to earn and you may find it difficult to continue paying rent.

Nevertheless owning a home and thinking it is saving you money is a false belief. Yes it has potential to make you some good money if you sell and can find a buyer but then how many people sell their homes? Remember the stock market boom when lots of people were paper rich but never cashed their money same thing happens when you look at your home as an asset but never sell or use it as collateral for a loan.
Re: Is It Financially Wise To Have Your Own Home? by Fhemmmy: 5:13pm On Jun 15, 2011
^^^ So u think it is better for someone to just rent and rent till death do them path?
Re: Is It Financially Wise To Have Your Own Home? by Reflector: 8:04pm On Jun 15, 2011
@Fhemmmy no. If you can afford it build yourself a home, you need a place to call your own when you retire, a place where you cann't be harrased by any landlord. Just make sure you manage your expectations well.
Re: Is It Financially Wise To Have Your Own Home? by Fhemmmy: 8:09pm On Jun 15, 2011
Reflector:

@Fhemmmy no. If you can afford it build yourself a home, you need a place to call your own when you retire, a place where you cann't be harrased by any landlord. Just make sure you manage your expectations well.



Only a fool will not sit and do the math to be sure he can afford what he is planning to do
Re: Is It Financially Wise To Have Your Own Home? by harakiri(m): 8:15pm On Jun 15, 2011
If owning your own home mean living on your without tenants, then YES. . . Its a wise decision. Live with tenants and you'll be in regret till you are forced to "vacate" else where or sell the house. I dey yan from experience.
Re: Is It Financially Wise To Have Your Own Home? by pepperoni(f): 10:51am On Jun 16, 2011
@Op
Do you need a sooth-sayer/prophet to spell it out for you? Of course YES it is! Only if u can afford it.
Re: Is It Financially Wise To Have Your Own Home? by dustydee: 11:23am On Jun 16, 2011
It is especially in places where renting a house is expensive.
Re: Is It Financially Wise To Have Your Own Home? by damola1: 11:41am On Jun 16, 2011
harakiri:

If owning your own home mean living on your without tenants, then YES. . . Its a wise decision. Live with tenants and you'll be in regret till you are forced to "vacate" else where or sell the house. I dey yan from experience.

I think what people should really really understand is , there's no security anywhere. People try to find solace in Houses, but truth be told,, when you go hungry, you'll sell off the house. Yes, a house gives you comfort when you go broke, but nothing more.

See, you have a N50M in your hand, maybe you get some property in Ikeja, and renovate it, and it becomes yours. Two things happen to you. You don't have money anymore, and you have to start over again, or simply live off the house, or throw away that security to get money from the bank.

The other option is, trying to use that money to produce more, such that getting a house really wouldn't be a big deal, more or less like something on the side.

You have to be on top of your game till you die. Businesses can buy and use houses. Don't expect a house to fix things for you, unless you were fortunate the area you are had an unexpected rise in value.
Re: Is It Financially Wise To Have Your Own Home? by RuuDie(m): 11:53am On Jun 16, 2011
Big question ~ when you own a house aren't you supposed to being some kinda periodical taxes or rates? I've never heard any mention of those in naija!
Re: Is It Financially Wise To Have Your Own Home? by Reflector: 12:05pm On Jun 16, 2011
RuuDie:

Big question ~ when you own a house aren't you supposed to being some kinda periodical taxes or rates? I've never heard any mention of those in naija!

In actual fact you are supposed to pay ground rent to government every year, unfortunately government is not very good at collecting this tax, they prefer to go chasing companies for employee tax and company tax.
Re: Is It Financially Wise To Have Your Own Home? by LOLOH: 12:51pm On Jun 16, 2011
IS IT WISE? shocked ARE YOU KIDDING ME?
Re: Is It Financially Wise To Have Your Own Home? by 1forall: 1:09pm On Jun 16, 2011
No brainer cheesy
Re: Is It Financially Wise To Have Your Own Home? by Reflector: 1:15pm On Jun 16, 2011
LOLOH:

IS IT WISE? shocked ARE YOU KIDDING ME?


have you done the financial analysis or basing your response on emotional needs?
Re: Is It Financially Wise To Have Your Own Home? by Reflector: 1:17pm On Jun 16, 2011
1forall:

No brainer cheesy

ok can you share your analysis with us?
Re: Is It Financially Wise To Have Your Own Home? by hardbody: 1:43pm On Jun 16, 2011
@ Poster

The answer to this poser is too basic and elementary. assume for purposes of discussion that you built your home for N10m (land inclusive), if you were paying N500k flat on the same property per annum to a landlord, it will take 20yrs to pay down. Meanwhile, after the property is erected, every money that should have gone towards accommodation gets saved up or invested, assume u save the same amount of N500k per annum, u would have your N10m back in 20 yrs plus peace of mind, plus the property that could then be sold at about N100m, plus interests arising from savings or profits coming in from investing and do not forget, landlords increase rents virtually every year so the calculations here may not even hold as this is done in straight line basis. Paying of out-goings like rates are no big deals after all even as a tenant you pay tenement rates, water and light bills. These, in addition to points earlier made about eventualities are more than enough proof that ownership of a personal house is non-negotiable. Lastline, build where u stay and make money before building another one in your village.
Re: Is It Financially Wise To Have Your Own Home? by deucelaw: 1:57pm On Jun 16, 2011
Does any 1 needs to be told wat the answer is?, this is no topic
Re: Is It Financially Wise To Have Your Own Home? by swiftycool(m): 2:18pm On Jun 16, 2011
From experience if done wisely its a better option. Ive often advised my clients to invest in building semi-detached 2 bedrm to 3bdrm as against a straight detached 4-6bdrm house. Now as an architect i handle d design & make it in such a way each flat has complete or @least 80% independence. I discovered Dat only d basic essentials need provided while fancy finishings & othrs can b done gradually. Trust me if u get a gud agent ud get people to rent part at a gud price even as semi-finished & live in d other

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