Buying a home can be an expensive challenge in today’s economy. The question is do we buy small and then trade up or rent until we can afford the high-end of living? Buying a home is smart thing to do if the time is right and one is financially sound and ready. If a person has been renting for years and is ready for homeownership, they should begin the process of deciding if it is right for them.

A person should do an analysis of their personal income and expenses and see what they can afford for a housing expense. The easiest number to use your current rental payment. Assuming you can afford a monthly housing expense of the same or greater than your rent and you have enough money to put down on a home and cover the closings cost, go look. It does not cost anything to look, even if it allows you to determine that you need to wait another year or two. Now what if the only thing you can afford is the ugliest house on the block or the smallest house in town? I say go for it! What if you cannot afford a single family residence because the taxes are too high? Then buy a condo-where they mow your lawn for you! There is nothing wrong with that and you can always trade up to something bigger or more beautiful later on. I have two great examples for you. My brother and sister in law bought a small  home on a beautiful street in the town they wanted to live in. The house was new and the area was being built up at the time. They loved the block, the schools and the town. The house was a little smaller than they wanted but very livable. Five years later when they were ready to sell, the house was still on a beautiful block in a very established neighborhood. It was very saleable because the area was desirable. By that time there were smaller houses and bigger houses, but there was a buyer for theirs and they made a nice profit after having a lovely life there. My second example is about my friend’s small ugly house two blocks from the water in Greenwich, Connecticut. This town is one of the most expensive towns in America and even if you live in a shack there, it is worth millions. Who cares if your neighbors think you are the hired help, you live two blocks from the (private-residents only)beach! Most people think they should buy something bigger than they really need, or maybe they want to buy something they can live with for a long time. Or, maybe they just want to impress their friends. Did you ever hear of house poor? Look inside the windows and they can’t afford the furniture. Don’t let that be you! Think about thing such as employment, salary and savings. Are there big expenses that might come up in the near future, such as college tuition. Do you have enough savings in case a problem occurs. What if something happens in your life that gets in the way of your plans? So, if you do your research and feel you need more time, keep on renting. However, if the financial picture looks good and sound for you to become a homeowner, then start doing your research. You can always change your mind further down.  Buy something affordable for you, not because it is a good deal. There are deals out there at every level now. Do not be roped into making the same mistake the seller made and buy something out of your range. Remember, it is easier to go from rags to riches than the other way around.