Living In Your Home, Not Theirs
Carl Moore:
Welcome to Meaningful Capitalism. I'm Carl Moore and I'm here with Brant Greathouse.
Brant Greathouse:
Guys, we're here today to talk about living in home that is yours and not theirs.
Carl Moore:
So one of the things that often happens is we kind of go through these different stages in life, and we reach this point, and some of us reach it earlier, and like me, I reached it a little bit later, lived in an apartment for a while. But there came this point in my college and then my young married life where I was like, "I don't want to pay rent anymore. I want to start paying on something that I can own that's going to save me a lot of money." I wanted a piece of that American dream.
Brant Greathouse:
It was the same for me. My wife and I, when we got married, we were living in apartment, after apartment, after apartment, and at some point we said, "You know what? We'd like to settle into a place, but we don't want to settle into somebody else's place. We'd like to find something that's ours, that we can set it up the way we want it, paint the walls the way we want it." And not, most probably, most importantly, be able to be paying towards something that is not just flushing money down the drain.
Carl Moore:
So what gives hope for home ownership? What are the things people want when they start thinking about theirs?
Brant Greathouse:
Well, first of all, especially as people who are in the stage of life where maybe they're looking at their first home, they're looking for something that's going to be kind of a starter home. So, I mean, when I got married, I didn't even have a living room table. I didn't have a whole lot of things that you sort of accumulate and acquire over time. And so much less was I even able to think about or consider buying my own house. And so the very first thing that I think most people think about is what's something that's going to be affordable?
Carl Moore:
Absolutely. So one of the things that I did, and this is kind of a long funny story, and I'll try to keep it short, but basically I'm laying in bed and we had decided we were buying a house. We were under contract. We hadn't yet closed, the documents hadn't happened. But we're laying in bed, and I lean over to my wife and I said, "I've got a confession for you," which is never a great way to tell your wife anything apparently, because she thinks all of the worst things, which were not what was going on.
And I said, "I bought a dog." And she's like, I think I could have said anything. It was like her mind was in the worst place. But that was it. It was like when we thought of a home, for me it was, "Hey, I've got a place I can have a dog," which I know people have dogs in apartments. That's just one thing that she and I had decided. Once we get a house, then I can get a dog. And so I'm thinking a yard, I'm thinking... The apartment was great, but you never knew where you were going to park. If you left something in your car, it could be at the bottom of the stairs, but it could also be across the parking lot because you got there late that night. I could park at my front door. So those are some of the things initially come to mind.
We wanted children, so we were thinking, "Okay, we don't want to just buy a two bedroom, one bath house. We want to buy a three bedroom, two bath house that has a yard, a place for a play set." We were thinking down the road a little bit. And I think when you start thinking about something that's going to be yours permanently, you do kind of transition your thoughts to be a little bit farther down the road than where you are. And so some of that hope for home ownership comes in that. I think it's kind of the American dream to own a home, to park at your front door, to have that little bit of yard, the three bedroom, the two bath.
Brant Greathouse:
Put in a little landscaping around there and be able to have something that's called yours.
Carl Moore:
Absolutely. Absolutely.
Brant Greathouse:
Yeah. So as we talk about home ownership, what is the market looking like today where that, for people who are wanting to buy just a starter single family house?
Carl Moore:
Man, some of the numbers have gotten outrageous over the past couple of years since COVID with price increases. I know on average in the United States, new homes sell for a little bit more than used homes, but they're pretty close to each other. United States averaged is just over 375,000 to buy a house.
Brant Greathouse:
That's nuts. I can remember just not even 10 years ago, it was half that.
Carl Moore:
Oh, it was under 250,000 was the average. And so in Texas, the prices increased to over 350,000. So still a little bit more affordable than the United States as a whole, but Texas is also climbing faster because of the amount of growth we've had here. So when people are thinking about getting that first home, your monthly income has to be pretty substantial to get just the average home nowadays. And so I think this is what's driving a lot of people into our market with mobile home communities.
I can buy a three bedroom, two bath house. I can park at my front door. I can have a little gate with a dog that has a place to go to the restroom. I got a little spot of grass to mow to call my own. And at the same time, I can get into it and live there for less than a hundred thousand. I don't have to work two or three jobs and miss my kids growing up just to pay the bills. I can take care of what I need to. I can come home and I can enjoy that peace of mind there at home.
Brant Greathouse:
I think a lot of people are starting to just get rid of the idea that I got to keep up with the Joneses and I got to have this massive house. I think a lot of people are starting to realize, "Look, I need a house that's going to fit my needs for my family, that's going to keep us safe, that's going to be affordable, because I'd rather spend a lot of money on a lot of other things in life besides a huge house."
Some people want a huge house still. But honestly, something that's going to meet all of those needs and allow you to have a substantially higher lifestyle. I mean, if all of your life is spent in your house, well, that's one thing. But if you want a lifestyle, you can have that by getting something that's affordable and setting yourself up in something that is still yours, you own it, but instead of renting and paying somebody else's mortgage.
Carl Moore:
And one of the things that I've noticed is when we drive some of our communities, I think for a long time, what I had thought was, "Man, why do I have the oldest car in the community?" Because of what you just said. I can buy a more affordable home, and so I can now afford a Lexus. I can afford a Mercedes. I can afford a Cadillac. And so I'm driving through in my old Toyota and everybody has newer cars to me. And it's kind of like, well, that's why, because I spent way too much money on a stick-built house.
Brant Greathouse:
Right, exactly.
Carl Moore:
So to sum up, the hope for home ownership does not necessarily have to look like what it did 20 and 30 years ago, buying a stick-built house, living in a subdivision. Many people are transitioning into mobile home communities, buying a more affordable house so that I can have additional income to spend on things that are more important to me. For some people, that's cars, hairdos, fingernails, going out to eat. And for other people, I know many people that have bought multiple homes inside of the same community to buy as investments to build long-term wealth, all while staying right there outside of the stick-built home.
Brant Greathouse:
Whether you buy multiple homes or not, you can still build long-term wealth, and it's an incredible way to start and kind of get into something that's yours, where you start out with something affordable, you live there, and while you're living there, you're paying it down. That's building your equity. Eventually, you may not stay there forever, but you now can be able to sell your property and have a down payment, a sizable down payment for a next level.
Carl Moore:
And this really feeds into the podcast that's upcoming, the Three Investment Buckets. If you live in something affordable, you have the free cash flow to start filling up your investment buckets. And if you don't have a strategy for future investments, listen to our Three Investments Bucket podcast. There's just some incredible stuff that you can do by just not paying a lot for the place that you physically live. I'm Carl Moore.
Brant Greathouse:
Brant Greathouse.
Carl Moore:
Thanks for joining us.
Brant Greathouse:
[inaudible 00:08:52] Meaningful Capitalism.
