Questions you need to answer before you start searching for a home

Searching for an apartment or home can be tough, most of us will buy a home once or twice in our lifetime so it’s important to take into consideration as many factors as we can before deciding what to buy. Since I’m also looking for an apartment I can tell you what I’ve asked myself in order to help me decide what is best suited for my needs and goals. Below you can see a list of questions with possible answers and some pointers on what would be best suited for those answers.

1. How old am I? This is probably the easiest question to answer, but it has a lot of implications on what to decide next.
   • < 20 years old – if you are younger than 20 years old I don’t think you should be thinking to buy an apartment/house yet. The first reason is that you probably don’t have the money and even if you have I don’t think that you can tell me what is the city you want to live in for the next 10 – 15 years. At this age you are better off by renting and being flexible.
   • 20 – 25 years old – this is the age that almost everybody starts thinking about buying a home, you are working for a few years now, maybe you have some money saved in your bank account and thinking why am I paying someone rent when I can finally have something of my own. Personally I don’t think this is a good age to buy anything more than a studio.
   • 25 – 30 years old – I think this is the perfect age to your first home, you should be better financially, have a stable relationship and a more clear view on what you want from a home.  In this case a one bedroom would be perfect, but depending on other factors that we will discuss below you can opt in for a 2 or 3 bedroom or even a house.
   • > 30 years old – this is the period when most people need an upgrade, one or two children have come up and the huge apartment from 10 years ago is full of stuff and there is no room for anything.
2. How much money do I have? – the most sensitive topic of course is about how much cash do you have, if you are willing to borrow, and what sum will the bank let you borrow. This will ultimately be the factor that will determine what you will buy. Depending on your risk tolerance you can borrow more or less but I would never advise to borrow as much as the bank gives you. The bank will let you borrow sums that will take up more than 50% of your monthly income and having > 50% of your income go into the mortgage for 30 years it’s a huge stress on your budget and it poses a lot of risks. A lot can happen in 30 years, interests can go up, there can be health issues, unforeseen expenses, divorces, or job problems. Who knows, maybe your job will be done by robots in 20 years :). Of course everything can go well, you can increase your income have multiple income sources and more financial flexibility, but it’s a lot safer to upgrade then, because you can easily afford it, than overstretching you budget and cutting everything else from your life just to have the nicest apartment.
3. How do I want to commute? – car or public transportation?
   • by car – if you are the type of person that can’t go anywhere without your car, then the answer is simple, search for locations that have good road connections to where you need to go (work, relatives, friends etc), try to find areas where there is less traffic. This may be an advantage because you can find cheaper locations because you are not looking for areas where the public transportation is really good. Keep in mind though that not having any public transportation available is not ideal. You won’t want to drive your children everywhere or search for taxis if your car breaks down.
   • public transportation – then good transport connections are a must.  You should search for locations that have multiple options so you can take the bus if the metro is not working. If you have good public transportation connection you will also increase the rentability of your home and it will help you a lot if you want to sell it in the future.
4. Do I want children in the next 5 years? How many? This is a very important question to answer because coupled with the next question will determine what is the best size for your home. I’ve considered the 5 years time span because it would be the minimum amount of time before you could buy something bigger. Of course you can always sell your current property and start searching for something new, but I don’t think it’s something that you would want to do every 2 years
   • no – if you are not thinking on having children in the next years then I would suggest to buy the smallest apartment you can comfortably live in. In my opinion 1 bedroom apartment is more than enough for 1-2 people. Having empty rooms that gather dust doesn’t make sense. You pay more on the mortgage, more on the utilities without any benefit than a room where you may have some guests sleeping a few times a year or where you keep all your clutter.
   • yes – if you think on having children in the next years try to get something bigger, the more children the bigger 🙂 Kids take up a lot of space. You need space for them to play to keep their toys, clothes, books etc. Having one room per child would be ideal. When they are small they can sleep with you or together, but after they grow a bit, I think they should have their own room. So in this case 2+ bedrooms are the way to go.
5. Do I want to upgrade later? Another important thing to consider is if you are willing and able to buy something else in a few years.
   • yes – if right now space is not a problem and you are thinking to upgrade in a few years, then it might be a good idea to buy something smaller and in a good location. This will decrease maintenance costs and also make your property more easy to rent/sell when you are ready to upgrade. This sounds as a very tempting option but there are a few things to consider going this way.
     1. Prices may increase – the housing market can go up and the apartment that you can afford now may go up in value and become unaffordable in a few years, leaving you stuck in what you have now
     2. Taxes – if you have more than one property the taxes that you have to pay will increase, also there are taxes to pay if you sell or rent so these should be considered also
     3. Having to find another property – of course you will need searching again for a new apartment and even if you consider it a pleasant experience (I don’t) you will still waste time searching for the ideal home
     4. Another downpayment – while paying the mortgage for the current apartment you need to also put some money aside for the downpayment on the new one. This may put a strain on your budget or make upgrading difficult or even impossible.
   • no – if you think to buy something that you will live in possibly for the rest of your life then you need to more considerate on what you will want/need in the future and this may be easier said than done because all the answers on all of these questions may be different in 10 – 20 years. A lot can happen in such a long period of time so what you think you will want in 10 years may be very different from what you will actually want then. My advice in this situation is to try to figure out as best you can where you are and where you want to go in the future and make the purchase of your new home as a step in that direction.
6. Location or space? This is a tough question to answer, but is an essential one. Going further from the city will decrease prices and make your dream home more affordable. You will get a lot more for the same amount of money. Also going into a not so good neighbourhood will also bring the prices down. The thing is that the prices are lower for a reason. Not so many people want to live there. Why? There can be a lot of things, poor infrastructure, not so friendly neighbours, lack of good schools, big commute times, lack of parks, shops and green areas, lots of traffic etc. First you need to see why is that location less desirable than others and see if you can live with that. If what you find doesn’t bother you or you can live with it then going a bit cheap may be a good thing. In my opinion you need to find a balance between the location and the actual apartment. If I would have to choose between the smallest studio in the best location in town and a big house with everything you want in the middle of nowhere, I would choose none.  Having a bit of both is very important and you need to find what works best for you.
7. Apartment or house? I think this is a easy question to answer. Some people want a house and some don’t. Below I’ll highlight a few advantages and disadvantages of each option.
   1. Apartment – Advantages
      1. Better location – Apartments are usually found in better locations than houses
      2. It’s cheaper – for obvious reasons, apartments are cheaper to buy than a house in the same area
      3. Lower maintenance costs – an apartment will have smaller upkeep costs since they are shared between the people from the apartment building. Also the heating costs are lower because you have adjacent walls with other neighbours.
      4. Nice views – some apartments can come with really nice views if they are on the last floors.
      5. Shops and restaurants – most apartment buildings have a shop nearby if not at the ground floor so you’ll have more convenience when going to buy something or go out to eat.
   2. House – Advantages
      1. Bigger place – Buying a house will give you more spacious rooms, at least two bathrooms and more storage space
      2. Your own yard/garden – Most of houses come with a decent yard where you can setup a garden, play area, relax area etc.
      3. Room for pets – of course if you are a pet lover a house is a better option since your pets will have more space to live and they also can go outside whenever they want
      4. Privacy – having a house brings more privacy since you don’t have any adjacent neighbors
      5. Quiet – houses are usually in quiet areas so you will benefit from a better night sleep, also you won’t have a neighbour above that walks in high heels at 5 in the morning
   3. Apartment – Disadvantages
      1. Small – apartments are usually smaller than houses and come with fewer storage options
      2. Less privacy – living in an apartment building will come with less privacy since you have a lot of very close neighbors
      3. Noisy – of course you will have more noise from your neighbors (hopefully you’ll not have the kind of neighbors that listen loud music at 3 AM) but still there will be more noise and not only from the neighbors but also from traffic.
      4. Difficult to make changes – renovations or improvements can’t be made without the agreement of all owners. For example choosing a new elevator or a security camera for the building could be a lengthy and stressful process since not everybody will want or have money for the same thing.
      5. Parking – if your apartment building doesn’t come with enough parking spaces, you may find yourself in the situation where you have to park somewhere on the street and if you live in a crowded area it may be very difficult to find a good spot especially if you get home a bit later in the evening
   4. House – Disadvantage
      1. Location – houses are usually in worse locations if you live in a city, they might be far away in the suburbs or in developing areas with less infrastructure so the comute to work may take longer and you may not have other options except with the car.
      2. Expensive – houses are more expensive to buy since they offer more space and private yard
      3. Maintenance costs – the maintenance costs for a house will be significantly bigger since you have more things that can break down. On an apartment you usually need to worry only about the interior, but on a house you also have the exterior, the yard, the roof etc. Also the heating costs in the winter months can get pretty big
      4. Less convenience – If living in an apartment building in the city puts you in walking distance to shops, restaurants, schools etc, when living in a house area you usually don’t have all this stuff that close.
      5. More work – If you are a lazy person a house may not be a good choice since in/on/around the house there will be always work to do. From mowing the lawn to fixing the roof there will always be something to work on when you get home. Some people really love this kind of activities, but there are also people that don’t. So you need to figure out if that’s your thing because no one wants to live in an unmaintained house with shrubs instead of a loan.

In conclusion you need to factor in all of this questions and probably more to make a decision. That decision won’t be easy since you can’t have everything and at some point you will need to make a compromise. It’s a ugly word but it needs to be used, most likely you will need to compromise on something, space over location, location over money etc. Hopefully this article gave you a bit more knowledge and will help guide you in the right direction. Please also share your thoughts about this topic in the comments below.