Actually speaking I am not a fan of Antilla or Mannat, not for the reason that I do not have a house like this but due the fact that I like bumping into my kids (sometimes), observe my parents for their greatness and share warmth with my wife. Financially also, if you are shopping for a house, the size of the house makes a key component of your decision. ‘Living life king size’, ‘Living Large’ or ‘Living Bigger’ does not definitely mean living better and ‘going smaller’ does not mean sacrificing.
WHY A SMALL HOUSE/FLAT…
A small house can save your money in many ways. Buying a small house is comparatively much cheaper than buying a large house. Besides this entry point, where we need to pay less price, there are a host of other financial perks available in a small house/flat. Read: Buy or Rent a House?
- Easy to make/purchase – the main expenditure in making a house is LAND cost. A small house allows a person to have a small budget as the small land will cost lower than buying a bigger piece. A person can buy a small land near to city amenities and save lot on transportation and safety. If he is buying on loan the outgo will be less in form of interest payments.
- Higher transaction time – It’s a global phenomenon that small property is sold in less time than the large one. This is because it is affordable and supply side of buyers is more. So in case of analyzing the relative liquidity, a small house is easy to sell and purchase.
- Lower property taxes & property insurance cost – People generally fail to consider property taxes while purchasing large houses. Property tax is based on assessed property value and property value is based on price per square foot/yard. Hence, property tax is comparatively lower for small houses. Hence a person living in a small house can make savings at this front. Similarly the insurance cost for small house is much less than large house. Although insurance depends on lot of other factors but area is also one consideration.
- Lower cost of maintenance – Small houses are easier and economical to maintain than large houses. For example, there would be savings in the material used and time in painting/whitewashing the house (due to less space) than large house. Similarly, a small roof will cost less to repair than a large roof. Replacing the floor tiles would definitely cost less in a small house than a large house. Further, there would be savings in purchasing cleansing materials as there is less space to clean. Also, there may not be requirement of domestic help or will require less aid to clear the mess of the house, thus saving on the monthly budget.
- Less documentation – To build small houses, some of the building related permits are not required. This depends on state policy on housing. These include setbacks, side walls, parking space, height of building and story levels. But for a small house the documentation and required approvals will be less. Thus a person can save the time and money required for seeking these building permits.
- Lower utility bills – There would be a great downsizing in electricity bills, water bills, etc. in case of small houses. Even the installation cost will be less as you will require a kw/h connection. Few rooms would mean less lighting and cooling cost, thus overall making saving in the energy utility bills. This also means less expensive for the house to equip with central heating and cooling system, renewable energy systems like solar water heater etc.
- Lower ongoing medical cost– There is various reasons to prove that small homes may be healthier than large homes. Firstly, since small houses are cheaper than large houses, it reduces the financial stress on the house buyer. A person need not take too big loans and the stress to pay them off for buying small house. Secondly, it is easier to clean small houses. A clean house can avoid major diseases which are spread because of unhealthy surroundings like contaminated water, dusty spaces etc.
- Save money on frivolous living– A small house has less storage space. Hence a person would purchase only those items that he actually requires. You will not be interested in buying unnecessary plastics and wood. In fact person will be tempted to sell off things that he don’t require to keep the space free. Smaller spaces help in thinking creative ideas to maximize every square inch of the house. It helps in optimum utilization of space.
Besides the above reasons through which a person can make financial savings, there are a host of other benefits which are available in living in a small house.
Small house can actually improve a person’s way of living.
Below are few of many reasons:
- Family bond– The bonding develops more between family members as they spend more time together.
- Housekeeping efficiency– Doesn’t need a devoted person to spend the whole day in cleaning the house.
- Keep wants and need in perspective– Due to less space, would buy only those items which are necessary.
- Home security– Since there are fewer access points in terms of windows/doors, no intruder can enter the house without being noticed.
- Easier to live simply– It is much easier to live simply, without fuss and societal peer pressure in a small house.
- Environmental friendly– Less trees used to build (less furniture), less electricity, gas and water used, less of waste, will have a smaller environmental footprint.
Thus the advantages of a small house over large house are pretty obvious and inspiring to those who believe in economical and simple living without much stress. Warren buffet advocates that “affordability” should not mean “expenditure”. It means that even though you can afford, you should not pay more for what is not required. He has practiced what he said as he is been living in the same house he used to live when he started his career.
What is your analysis or observation on this? Share your views in the comment section please.