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Our houses: homes and investments

Some time ago now I argued that renting instead of owning a house makes sense under certain conditions. Hypothetical arguments aside, most people from my generation (tail of the boomers and the beginning of X) still own their houses. And when you own a house two things are hard to avoid: you start making it yours and you start thinking of it as a hedge against the uncertainty of the future. In other words, you start making it ‘a home’ and you start thinking of it as investment.

Making a home is the crossroad between ‘knowing thyself’ and ‘keeping up with the Joneses’. We create our own environments by decorating, buying rugs, furniture or investing in traditional sofas. We put pictures on the wall or simply spread some cushions and scarves around. A long time ago, when I was renting, my books, my lights and several scarves were always enough to create a home; a place where I felt comfortable, safe and secure. Transforming a house or an apartment into a home demands creativity and ingenuity but is, or can be, relatively inexpensive. This is also the portable part of ownerships – when you move, you can take your sofas, cushions, light and scarves with you.

Making a home is important! OK, I’ll re-phrase this one – making a home is important after a certain age. But when we own a house (or an apartment) it is much more than a home – it is a major investment. In fact, if statistics about the wealth distribution in the UK is to be believed, houses in many cases are our only investment.

In this case, to maintain and increase the value of our investment, we need to turn our sight to the building itself and tackle more structural matters. Commonly, three things are considered to be of paramount importance. These are: the roof, the bathroom(s) and the kitchen. Of course, other things matter as well, but estate agents (realtors) and buyers seem to agree on this one. Incidentally, having nice and functional kitchen and bathroom not only increases the value of a house but it also improves your quality of life in it. How do I know? We did it!

The bathrooms in our house were never very nice to look at but they were usable – so we didn’t change them immediately. A year or so after we moved in they started leaking in the kitchen (they are just above it). We will patch them and then they will leak again so that we ended up with two grotty, leaking bathrooms and a kitchen ceiling that was falling down.

Two years ago we had them done – everything in the bathrooms was stripped to bricks; the kitchen ceiling had to be taken down and everything was renovated and re-decorated.  We followed two rules: everything had to be done properly so we didn’t try to save on materials and fittings or the labour and all had to look classic and classy. You see, it is not a tragedy if you end up with a strange colour bedroom; it is an entirely different story if you end up with strange tiles and floor in the bathroom.

What makes out house a home is our furniture, our decoration and our pictures. Our bathrooms say home as well but they have also increased the value of the house substantially.

Is your house (apartment) a home, investment or both?

PS: These are pictures of our bathrooms.

16 thoughts on “Our houses: homes and investments”

  1. I agree. Looking after your home and putting some money into it is a good use of money. It is an asset that you can liquidate later if you need and for a higher price if the house is kept up. We try hard to constantly keep our house up to date and looking nice. Not only do we enjoy it but it will be easy to sell if we ever need to.

    • @Miss T: Great! We have some plans as well. Our kitchen can be so much nicer but we will need to spend quite a bit. Well, we can do it in couple of years.

  2. My primary residence is a nothing but a home. It is far from an investment. I call it my most expensive lifestyle choice. It’s also a part of my live a little category. I’ve spent so much money furnishing and making my home how I want it that I doubt I will recoup a lot of that money spent. If this was an investment like my rental properties I would only perform necessary changes.

    • This is an honest statement. Houses (primary residences) are not investments, but rather a lifestyle choice. In most locations, it’s significantly cheaper to rent once the full cost of house ownership is calculated.
      That doesn’t mean you’re a bad and horrible person for having or wanting a home. Just be honest that it may not be the nest egg or retirement fund you’re hoping it will be.

      • @Doc: No, it just means owning a nice place to live in and ownership has it’s advantages. Btw, it isn’t a retirement nest and my problem at the moment is that I can’t think of many thing that are (or will continue to be).

  3. We don’t own a home yet. But when we do, our primary residence will always be a home. Yes, we will have to spend money on renovations, furnishing, decorating… but we do it so that we can enjoy the house. We do plan on buying rental properties which will be investments.

    Nice work on the bathrooms!


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