Home ownership vs Entrepreneurship... is both even possible?

Hi all,

I know it's been eons since I posted here, but I'm still alive and well.

Basically this is the way life has been unfolding lately. I started my own business back in February. It was something that just kind of happened over time. I didn't wake up one day and decided I was going to start a business. But my work started selling, I started getting commissions here and there, etc. I got into the live painting scene this summer and did a few shows. Some of the shows I did ended up being huge money makers. Some of them flopped. I have already started working out my calendar of events for next summer and am working on two huge art projects, as well as a few Holiday commissions. (Lot's of pet portrait commissions this year, lol.)

So in light of all this, I have been wanting to spread my wings a little and move to a bigger place. I have a pretty decent chunk of money saved up that would be a substantial down payment on a house. I am just sick and tired of living in one bedroom apartments. I'm getting too old for this crap. And since I started my business I have all this extra stuff sitting around my apartment with nowhere to store it (Please don't reply and tell me to get a storage unit. It's mostly stuff I use regularly and artwork, none of which I want to put in a storage unit where there might be rats and roaches.

So I have been looking at houses. The first one I looked at was set to auction and it was way more than I could afford. But today I went and looked at my dream home, pretty much. And aside from having pretty much everything I want, it's right in my price range. It even has a little building in the backyard that is heated, with electricity that could be my art studio.

Here's the thing though... I have a few friends who own houses. And when they buy a house there life pretty much ends. It's almost just like having a kid. No more social life, no more extra cash, no more free time, etc. I know a lot of people are going to read this and tell me that isn't true. But it seems like owning a home does take up a lot of a person's time. And a lot of money has to be put aside for maintenance, etc. And it seems like a lot of my friends who own homes are always broke. I don't want kids because I don't want someone taking up all my money and my time. So if owning a home is like that, why would I want to own a home?

And I feel like as a homeowner my business isn't going to flourish at all. The only benefit is I would have my own work space and a place to store my stuff. (There is nowhere around here to rent studio space, I have checked.) And even if there was I probably couldn't afford it. I know what some artists pay for studio space. I don't have that kind of money laying around.

I would be living alone too, if anyone is wondering. There wouldn't be two incomes. I am in a relationship but we choose not to live together. We both like our space and time away from each other.

I made a mock budget factoring in everything I spend money on,I meant groceries and everything. I factored in everything I spend money on and what my projected mortgage would be, taxes, homeowners insurance, estimated utility bills, etc. And after it's all said and done I only have about $75 wiggle room a week. This isn't factoring in any of the money my business brings in, only the money my day job brings in. Only having $75 a week to play with in case something unexpected comes up kind of scares me. And I talk to people about it and they act like that is plenty. I don't know.

And my landlord is a slumlord too. Not only is my place small, but it's falling in. I have checked into renting a house here also. And when houses here rent for almost twice what my mortgage payment would be, renting doesn't seem practical. I mean, if it comes to paying a $500 mortgage, or paying $900 in rent, what option are most people going to choose? (And the $500 mortgage includes the property tax, fyi.)

So, sorry for rambling... Is home ownership even possible for someone like me? Should I just wait? Would this kill my business? My business is more important to me than being a home owner. What do you all think? Opinions appreciated.

Also, sorry for all the grammatical errors in this post. I wrote it in kind of a hurry and didn't really proofread. Oops!

So I have been looking at houses. The first one I looked at was set to auction and it was way more than I could afford. But today I went and looked at my dream home, pretty much. And aside from having pretty much everything I want, it's right in my price range. It even has a little building in the backyard that is heated, with electricity that could be my art studio.

 

Here's the thing though... I have a few friends who own houses. And when they buy a house there life pretty much ends. It's almost just like having a kid. No more social life, no more extra cash, no more free time, etc. I know a lot of people are going to read this and tell me that isn't true. But it seems like owning a home does take up a lot of a person's time. And a lot of money has to be put aside for maintenance, etc. And it seems like a lot of my friends who own homes are always broke. I don't want kids because I don't want someone taking up all my money and my time. So if owning a home is like that, why would I want to own a home?

 

And I feel like as a homeowner my business isn't going to flourish at all. The only benefit is I would have my own work space and a place to store my stuff. (There is nowhere around here to rent studio space, I have checked.) And even if there was I probably couldn't afford it. I know what some artists pay for studio space. I don't have that kind of money laying around.

 

I would be living alone too, if anyone is wondering. There wouldn't be two incomes. I am in a relationship but we choose not to live together. We both like our space and time away from each other.

 

I made a mock budget factoring in everything I spend money on,I meant groceries and everything. I factored in everything I spend money on and what my projected mortgage would be, taxes, homeowners insurance, estimated utility bills, etc. And after it's all said and done I only have about $75 wiggle room a week. This isn't factoring in any of the money my business brings in, only the money my day job brings in. Only having $75 a week to play with in case something unexpected comes up kind of scares me. And I talk to people about it and they act like that is plenty. I don't know.

 

And my landlord is a slumlord too. Not only is my place small, but it's falling in. I have checked into renting a house here also. And when houses here rent for almost twice what my mortgage payment would be, renting doesn't seem practical. I mean, if it comes to paying a $500 mortgage, or paying $900 in rent, what option are most people going to choose? (And the $500 mortgage includes the property tax, fyi.)

Homeownership is possible, but you have to be very realistic about what you can afford. I have owned two homes (one a condo, another a townhouse). For my first home, I made a special effort to make my home a money maker. I had two extra bedrooms and rented them out so I ended up making money on it despite the mortgage, etc. Not everyone can or should do that, but there are ways to make it work.

Obviously, having a husband and a second income helped me get a bigger second home. If it was still me by myself, I would still be in my condo. So maybe get away from thinking of your dream home and start thinking about your "need" home. I'd say keep looking for a place until, when you factor in the average monthly cost of home maintenance in your country/state, you can afford even if you were out of work for six months. So, if you need $2 grand a month, I would suggest you have at least $12 in savings left over after you purchase for worst case scenarios.

Two things I have been very careful about in buying homes. Buy homes that are move-in ready and not fixer uppers. It's important to have really good inspections and understand what's going on in the pipes and in the walls. If, within a year of moving in, people are needing new toilets, to replace their HVAC, a new roof, etc - that's a red flag to me that their inspection wasn't very good and didn't flag these potential issues or they ignored the warnings because they loved the house. You'd rather spend $10k more on the front-end for a newer and/or more sturdy home than pay as a planned expense for it on the back-end unexpectedly. This should reduce maintenance costs.

My maintenance costs haven't been very much, to be honest. For the first year, it's been less than $500 and will probably be less next year. We voluntarily spent $20k adding a bathroom/kitchenette to the lower lever/family room/basement and another $1k redo-ing the closets. But that wasn't maintenance, that was upgrading.

So, I'd look at options for owning that are slightly larger one bedroom condos or maybe one bedroom with a den ... two bedrooms at most.

Anyways, just a few thoughts.

I was also going to suggest a condo because they will take care of the big outside stuff for you, while you can focus on the insides. I had a condo and I found it worked really well. I had very few things to fix because it was new construction.

Homeownership is possible, but you have to be very realistic about what you can afford. I have owned two homes (one a condo, another a townhouse). For my first home, I made a special effort to make my home a money maker. I had two extra bedrooms and rented them out so I ended up making money on it despite the mortgage, etc. Not everyone can or should do that, but there are ways to make it work.

 

Obviously, having a husband and a second income helped me get a bigger second home. If it was still me by myself, I would still be in my condo. So maybe get away from thinking of your dream home and start thinking about your "need" home. I'd say keep looking for a place until, when you factor in the average monthly cost of home maintenance in your country/state, you can afford even if you were out of work for six months. So, if you need $2 grand a month, I would suggest you have at least $12 in savings left over after you purchase for worst case scenarios.

 

Two things I have been very careful about in buying homes. Buy homes that are move-in ready and not fixer uppers. It's important to have really good inspections and understand what's going on in the pipes and in the walls. If, within a year of moving in, people are needing new toilets, to replace their HVAC, a new roof, etc - that's a red flag to me that their inspection wasn't very good and didn't flag these potential issues or they ignored the warnings because they loved the house. You'd rather spend $10k more on the front-end for a newer and/or more sturdy home than pay as a planned expense for it on the back-end unexpectedly. This should reduce maintenance costs.

 

My maintenance costs haven't been very much, to be honest. For the first year, it's been less than $500 and will probably be less next year. We voluntarily spent $20k adding a bathroom/kitchenette to the lower lever/family room/basement and another $1k redo-ing the closets. But that wasn't maintenance, that was upgrading.

 

So, I'd look at options for owning that are slightly larger one bedroom condos or maybe one bedroom with a den ... two bedrooms at most.

 

Anyways, just a few thoughts.

I looked into Condo ownership too. I always found it so funny that I live in an actual slum, yet literally right down the street and around the corner (I am not exaggerating or kidding either) there are 250,000 condos for sale. The complex is about ten minutes walk from where I live. My town is weird... There are condos here, but they are all either really high end luxury, or affordable but really tiny.

I would have an extra bedroom if I buy this place. I thought about renting it out. I would do a background/credit check on anyone who lives with me though.

There was actually just a home inspection done on this place. It has a new roof. Just had all the windows replaced a few years ago. Brand new front and back porch. The pluming isn't brand new but was updated in the early 2000s (And it's a 120 year old house, if anyone reading this is wondering.) I don't know when exactly the electric was updated but it was fairly new too. Real estate agents hate me because I am the person who goes in every room and turns on all the light switches, all the faucets, looks under all the sinks, flushes all the toilets, etc.

My boyfriend and I joked around about how someone must have been murdered there or something because it's such a nice place for such a good price. It is in kind of a bad part of town though. But honestly that doesn't bother me because I live in a worse part of town now.

I am just scared of the financial responsibility and getting into something I can't afford. I have zero debt. No student loans (went to college on a full ride scholarship.) Never owned a car (can't drive because of my eyes.) And I've never had any significant credit card debt. So putting myself into debt for 20+ years scares me, especially when I just started a business that is doing well and is less than a year old.

Thanks for replying.

If you have enough to put at least 15% down, plus another 5% to cover (generously) closing costs and other incidentals, 6 months worth of savings, however much money you might lose on leaving this place (for example if you are breaking a lease), and a steady income at the minimum + $200 a month you need to survive, you can afford it.

But don't underestimate the need for the steady paycheck. If you don't bring in income - even for a couple of months - that can be devastating.

Note: the minimum is all the costs you calculated before.

Like yourself, I'm an artist. I bought a big house last year, alone thankfully and not with my then girlfriend who duly left. I don't regret it one bit, the rents here are much higher than a mortgage so it made total sense. In terms of work, the commitment makes you push harder for commissions because you have a mortgage. I, for example, have studied how to use social media to generate work correctly.

Just do it, if money ever gets tight rent a room out.

I just bought my fourth house this past weekend. We started off small for the first two houses and this farm we own now is 100 acres and really a cool place. We sold it for a small fortune. We were mortgage free when we moved in 26 years ago, and will continue to be mortgage free with a bunch of money in the bank once we move from here. Obviously I am in total favour of home ownership. Rent is money down the drain.

If you like the condo idea, look into it, but remember there are monthly maintenance fees on it along with your mortgage payment. A freehold home, in my opinion, is a better idea, but it comes down to what you can afford.

Yes a home costs you money but you are investing in your future by buying a house. Get a roommate to help with costs as long as you want another person living with you.

Seriously, if you can buy a house, do it. We are self employed so certainly you can do the same and have the pride of ownership as well as an investment in your future.

I look forward to owning a home, someday. I think it's a far better deal than renting, because you get house equity. I currently rent and I will continue to rent until I finish my schooling and settle down.

The people who own homes and "have no life", that's not because they have a house, it's because they probably bought more house than they can afford. And you'd be surprised how many people do that. I plan to live in a low cost of living area (where I live now) and you can get a really nice home with land for 100k-200k.

For you, since you live alone, maybe you could find a modest 2-3 br place so you'd have a little office space. Look for places that are safe but also low cost, not expensive and high-end, and stay the HECK away from any place with HOA. Newer houses = fewer maintenance costs, usually.

I don't see why you couldn't be an entrepreneur as well as a homeowner, but you may want to consider keeping your job, at least part time, until you really develop a reliable source of income on your own.

All condos have condo associations. On the other hand, not all other properties have Home Owner's Associations (HOAs). Many newer properties, though, tend to have HOAs.

Condo associations tend to charge higher monthly fees than HOAs in my experience. I would say be mindful of the condos fees upfront. I have seen them range from $300 to $700 per month.

It depends on the communities where you live. There are barely any HOAs here, even in new built-up areas. It's just not want people want here, so we don't have them. Unless you like paying monthly fees and following nit-picky rules, don't buy a place with a HOA.

What's the rush? I don't see any reason at all for you to buy right now.

I bought a condo because I live in NYC and anywhere respectably navigable to any of the sites I work at runs $1600 at the very least for a 1BR. That's an amount of money I simply refuse to pay without any kind of equity.

It's a bit of a squeeze sometimes, but I definitely have more than $75 a week to play with if I need to. I wouldn't have done it if it meant pinching pennies or setting myself up for disaster if something financially catastrophic happens to my health or home.

Your business has gotten off to a solid start. Give it another year and start thinking about options.

If you feel bad about renting, I'd suggest looking up Peter Schiff's take on it sometime on Youtube. It's under something like "Why I Rent." Dude's rich and still insists on renting vs. owning. I don't quite agree with all his politics/economics and he is a little more unilateral about it than I am, but he raises quite a few good points. Owning can be a headache even if you have all your money ducks in a row. Factor in a potential financial struggle and you're setting yourself up for the migraine of the century.

I look forward to owning a home, someday. I think it's a far better deal than renting, because you get house equity. I currently rent and I will continue to rent until I finish my schooling and settle down.

 

The people who own homes and "have no life", that's not because they have a house, it's because they probably bought more house than they can afford. And you'd be surprised how many people do that. I plan to live in a low cost of living area (where I live now) and you can get a really nice home with land for 100k-200k.

 

For you, since you live alone, maybe you could find a modest 2-3 br place so you'd have a little office space. Look for places that are safe but also low cost, not expensive and high-end, and stay the HECK away from any place with HOA. Newer houses = fewer maintenance costs, usually.

 

I don't see why you couldn't be an entrepreneur as well as a homeowner, but you may want to consider keeping your job, at least part time, until you really develop a reliable source of income on your own.

I really don't know where people are getting the idea that I'm going to quit my job. I never once said in my post that I was going to do that. Quitting my job and buying a house would be about the dumbest thing i could possibly do.

No disrespect. Just clearing that up.

I really don't know where people are getting the idea that I'm going to quit my job. I never once said in my post that I was going to do that. Quitting my job and buying a house would be about the dumbest thing i could possibly do.

 

No disrespect. Just clearing that up.

You're right, it was wrong on my part to assume. Most people I know who are involved in self employment work towards their goal of quitting their day job and JUST having their own business. That's one of the reasons why they want to be self-employed: they can work from home and be their own boss, manage their own time, etc. rather than have their business be a side business with a typical day job.

You're right, it was wrong on my part to assume. Most people I know who are involved in self employment work towards their goal of quitting their day job and JUST having their own business. That's one of the reasons why they want to be self-employed: they can work from home and be their own boss, manage their own time, etc. rather than have their business be a side business with a typical day job.

Being self employed full time all year around would be awesome, but it's just completely unrealistic for someone like me. I do most of my work in the summer time at music festivals and art fairs that take place outdoors. I live in Ohio, so there's only about 5 months out of the year where I can really be active. I do commissions all year round but they aren't as big a money maker as the live painting I do.

I know people reading this thread don't know that and all. I just couldn't understand why multiple people were telling me not to quit my job.

I don't know any artists who are self employed and live alone. All the self employed artists I know have another income in the household helping out.

Hi Cynder,

Good to see you doing so well.

Buying a home in an investment in money and your life. Will you have to keep a tight budget? Yes. Will you need to put aside some emergency money for unexpected repairs? Yes.

Renting is throwing money away on something you get nothing out of other than a place to sleep. A house is yours to fix up the way you want it and then it becomes a home. Having a home is a special thing, a safe place that is all yours to take care of and be proud of.

I bought my first house when I was 20 yrs old, single working 2 jobs and money was still tight. It is a responsibility that you have to make sacrifices for which I think you can do.

It is a scary thing but all part of growing up and making a life for yourself. If it is a good deal and you can handle the payments I say go for it.

Also checking every little thing out inside and outside the house is a very smart move. Don't get rushed by agents and make an offer lower than asking price. They can always counter with their own.

Taking care of landscaping takes time but can be enjoyable too. Just remember that you own what you are taking care of and one day you can always sell and move up to something better.

Lost

Buying a home in an investment in money and your life.

I agree with this - with some caveats. (Note - this is just a general discussion and not a recommendation to the OP).

Buying a home is a good investment in money for some people ... depending on how how they buy, maintain, and (mostly) selling your home at some level of profit. Buying a home is great to the extent, in my opinion, that one is able to build and reap equity on the property.

As far as the "life ends when you buy a home/" That is only true if you let it. Some people end up dropping out socially when they buy a home not because its a ball and chain but because they feel settled, they like to start nesting - especially if they are married - sometimes they really just revel in that secure feeling that they now have and they take pride in wanting to bring friends to it and show it off, etc. I know when I first got a home with my ex - going out on the town instead of being in our postage stamp apartment was more of the gist of things.

I think that owning a home - if you are buying one that is slightly below your means - might have a good psychological affect in giving you some security - not worrying about awful people tromping on your ceiling and keeping you up, etc. I might suggest a cozy home that doesn't need many updates rather than a money pit, however.

Also, if you have your own home, you might have more space for your business, too. And you can always sell in a few years. And you will have the equity. Instead of putting your money into rent - the money can work for you. You would have 'something' to show for it.

That is just my two cents.

I will also say the feeling that you can be kicked out any time when a landlord sells a building, etc, is not fun and it will be a big relief when I move into a home. i have gone through several landlords in the same building - really horrible, loud, drug using neighbors, etc. Now things are pretty quiet, but with the landlords plans for the property - it doesn't exactly make me feel very secure. Psychologically, I would say owning something if you can do it really helps one sleep at night at at times.

Buying a home is a great investment if you can afford it and live comfortably.

But paying rent while you put together the finances to accomplish that is hardly "throwing money away." We spend money to have all kinds of goods, services, and even basic needs provided for us rather than investing extra money, time, and effort into more sustanent means, so why stigmatize paying for shelter and the service of having it maintained being provided for you?

Unfortunately, it's not like it was 30 years ago. Homes are about 200% more expensive (inflation-adjusted) than they were then and there's no such thing as 5% down. It takes a whole lot more financial preparation these days and with over a million foreclosures filed last year, it's still an investment too many people aren't taking seriously enough.

In the OP's case, I'd strongly suggest prioritizing the business and giving it another year at the very least and seeing how well the momentum picks up before considering buying. Invest in something liquid with the money you'd use for a down payment so that you can have it readily available to support your business should you need to.

An extra year of equity ain't worth going for broke over. Buying a home should be a confident decision.

So, quick update. I qualify for a loan. And I am eligible for a few first time buyer programs that will help me out a lot. This might actually be happening.

I know this thread is about three years old, but i was going to say that if you were keeping your day job and it was secure, then i'd go for home ownership if repayments are less than a rental upgrade. Owning a home also gives you borrowing clout and a roof over your head when you're older. Curious to see how you went, but we'll probably never know! Liked your reasoning it out though.