Defining Wants vs. Needs

3 Replies

Greetings BiggerPockets forum members! Excited to be posting on this most-relevant website, particularly after spending hours reading and listening to podcast and RE research information. Good stuff here for sure.

I'm writing to hear thoughts on a dilemma I'm experiencing. My fiance (I'm 3 days into this new word, takes getting used to!) and I have been researching, attending CREIA meetings, talking with local investors, as well as looking at a variety of homes for sale. But in all of this research I find myself getting more and more confused and wary about the direction to go next related to investing. On the one hand, my partner currently owns a house and it is being rented by 3 separate individuals (3 bedroom, 2 bath home) and that scenario is working really well. He is generating $150 extra after mortgage, bills, and saved costs for repairs.

As we move into the direction of life and family future, we are looking at ways to create more financial freedom. This is where Real Estate Investing has become a central focus. The issue for me, though, is that I want a house that at least inspires me to move into. The homes we've looked at for house hacking have all appeared to need some significant remodeling, with a price point in the 240k range. I'm not so interested in purchasing a home that requires a year or more of project work for income generation, particularly in a space that I want to feel good coming home to. If we are looking at a house for both of us strictly, we need to look at a different price point (more around 180k range) and than consider the next 1-2 years to save for a down-payment on an investment strictly.

My question to this group: What are some pros and cons that you think about when determining - peace of mind living in your space vs. looking at the space as income-generating/business mainly?

My feeling is that it's actually one or the other, not both...

Thanks so much for anyone who takes the time to share their experiences with this! 

@Sera Turner

Look at the words that you're using, Sera. There are decades of societal brainwashing in your personal past telling you that you, in your "family future," need to live in "your space" that "inspires" you, a house that you "feel good coming home to" that is obviously going to be at "a different price point." I'm sure you have even more codewords to express your desire to raise your kids in a place that requires no work to meet your standards for space, cleanliness, modernity, and aesthetic appeal. 

I WANNA NICE HOUSE!

Of course you do. That's why real estate is often such a great investment. That cultural desire expresses itself in incredibly powerful ways. We are forcefed propaganda to reinforce this belief exactly like geese being fattened for slaughter.

Want VS Need .  What you want you cant afford , what you need isnt gonna make you happy .    Only you can figure the rest out 

Hi and welcome to BP! There are many different routes in REI and you will hear different strategies. What I understand, from your post is that you are more interested in a lower cost home that would be comfortable to live in (no work needed) so you can save money for an investment while your fiancé (congratulations!!) would like to live in a higher cost home that needs work so you can value add and create equity, like a live in flip. Both strategies would work but really depends on your goals. What's your market like, how much money can you save if you bought a lower cost home vs how much equity would you create with the work you do to the house. You need to run your numbers and see what your long term goals are first.

I feel like you can have both, peace of mind when you come home and income generating property but there is usually delayed gratification involved. In REI if you are very serious, there is more work up front then it gets better long term. But as always, run your numbers and see what your market is like and what you would be able to tolerate.

 For example,  if you get a 250 k house and can add 100k of equity in it, then sell after 2 years, theoretically you would make more than if you can save about 30k a year for investment property.  If you get a 250 k property and add 40k of equity in 2 years then saving 30k a year makes more sense.  These numbers are just examples, but you get the idea!