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HomeGain Library
What Celebrities Can Teach You About Buying A Home
Have you ever paid a premium for your favorite music CD, only to find it was on sale for 20% less at another store in a Where-Are-They-Now bin?
If you've ever made this or a similar mistake as a consumer, don't feel bad-so has everyone else. Mistakes like these may be easily correctable, and for the price of a CD it won't cost you too much. Sometimes you must simply take them as "lessons learned" that lead you to be more careful in the future.
If you make the same mistake when buying a home, however, it could cost you thousands of dollars and may set you back financially, not to mention the difficulties you could encounter if the home has problems you haven't anticipated.
Celebrities frequently buy homes that are beyond the means of most of us and for reasons we wouldn't typically consider.
You can avoid many of these "celebrity pitfalls" if you follow a few simple rules when you go to purchase a new home.
- Don't act like a movie star and buy a home that's the size of the Roman Coliseum unless your household consists of 10,000 of your closest relatives. If you don't really need five bathrooms, a servant's entrance and a pool larger than the Great Salt Lake, then why pay for them? Buy what you need now and for the foreseeable future, and let your friends be impressed by your rationality and financial acumen instead of the size of your ego and wallet.
- If you just won the Academy Award for Best Sound Production in an Animated Short Film, you may need a house in L.A. with a view of the Hollywood sign to impress the producers and directors who will flock to your door. If, however, the only award you've ever received came from winning your 2nd grade spelling bee and the only acting you've done was when you're spouse tried to wake you at 2 a.m. to change the baby's diaper, then the costs of living in an exclusive location may be beyond your need and reach. Buy where you desire to live to impress yourself, not to impress the occasional visitor who will appreciate your view but won't help you to pay for it.
- If you're John Travolta and can fly your own personal jet to work, then you probably can afford to live far from your job and still have enough time to play with the kids when you get home. If the only jets you see are on the NFL Network on Sundays, then you should buy a home within a reasonable commute of your job so you can see your family and have time to fix the faucet when it leaks.
- If you're not a high-paid celebrity but are still going to visit other countries to adopt a child every year or two, be sure you will have sufficient cash available to pay for the trips by buying a home that allows you to keep your mortgage at a reasonable ratio of your annual income-if you can stay closer to 25% that's good, but don't go over 30% if you need lots of disposable income.
