Your New House: An Investment or Money Pit?

Building a Monolithic Dome and spending your money wisely will make your home both a safe and a wise investment.

March 30, 2004

by David B. South

David B. South,
President of the Monolithic Dome Institute

Too many houses are "money pits" of maintenance, utilities, etc.

A home comes in two parts, the first part is the investment. With the investment comes it's value as a domicile for the family, a place of refuge, (if it is strong enough to be a refuge) a place for the family to gather and work, struggle and grow together. A well-built home is certainly a candidate for becoming more valuable than, or at least staying up with, inflation.

The other part of the house is the "money pit." The money pit is the cost of maintenance, fuel, electricity, and manpower it takes to maintain and operate the house. This money pit is a place where you throw hard earned cash and it is never to be seen again, at least not by the owner, the power company may see it, but the homeowner will never see it again.

Which way do you want to go? If you spend all your money on the house, the "nice to haves" are going to be seriously diminished. On the other hand, you do need a safe and comfortable place to live. It is a balancing act that everyone must perform.

Homes: Needs vs. Wants

When a family decides to buy a home there is a lot of emotion involved. The home is generally the largest purchase a family will ever make. Many factors are involved, such as the number, ages, genders and interests of family members. Desired location has to be taken into account. What activities will your home play host to?

I am often taken aback when people come to talk about a new house and almost without exception they focus on how much they can possibly spend. They want to spend every bit they can get a hold of and everything they can borrow. Rarely do they ask, "What do we need?".

In my opinion, we should take a look at our houses in a new light. First, we should decide the baseline of what we actually NEED. Then we can add some of our WANTS, but we should always weigh the money we are spending on the house against the money we would otherwise have for savings, hobbies or a trip to some exotic land.

Another phenomenon that I see too often is a man and wife will arrange to build their dream house in the point of their life when all of the children have just left or are about to leave. It is amazing how many people in their late fifties, with nobody at home, want to build a house with four bedrooms, four baths, a huge garage, a huge playroom, etc. Money is spent on a house they don't need that could have funded a child or grandchild's education. The dream house can turn into an albatross at retirement.

The best way to examine your needs vs. your wants is to do a "Word Picture."

Design Considerations

Your Safety

At the 2004 Monolithic Dome Conference, Dave Passey, Public Information Director of FEMA warned that "hazard amnesia" is rampant. He said most people are in denial that a natural disaster will very likely take place at some point in their lives. A home should be a safe haven. It is difficult to put a price on the safety benefits of a Monolithic Dome. Knowing you are safe during an earthquake or tornado is priceless. Certainly, if a hurricane were to strike your house, you would easily see the savings when all you had to do was fix a window and mop up while your neighbors were rebuilding.

Amenities vs. "Nice-to-Haves"

Don't cut out the "nice-to-haves" in favor of lavish rooms and amenities. When talking about "nice-to-haves" I mean the things that enrich your life or make it more pleasant. "Nice-to-haves" include sizeable savings accounts, trips, cruises, horses, sky diving lessons, gym memberships, continuing education or whatever else is important to you. What a "nice-to-have" is NOT, is the stuff that clutters up our lives or continually drains our resources, like a brand new SUV which loses half it's value the second you drive it off the lot. It isn't a closet full of new clothes, or little statues purchased at the local curio shop.

Obviously the most important "nice-to-have" is a savings account. Savings are so important to the family. Savings can be in the form of cash in the bank, investments in IRAs, other company plans, investments in rental units or other interests.

Big Room vs. Small Rooms

Consider the little bedroom. You install a bunk bed, under the bunk bed you put a desk and a closet. At one end of the room you have a window to the outside, you have space to walk back and forth. What does this mean? It means that the child is going to spend his time in the bedroom sleeping, studying, doing quiet things. If they want to do things with other kids, they come out in the living room where they are under adult supervision. When a child is little they do not want to be sent to their room to play. They want to play where Mama is.

I find it interesting when parents of teenagers complain they don't want to spend any time with them, but those same parents sent their children to their bedrooms whenever they infringed on "adult" time.

I can assure anyone if you give your child 500 sq. ft for their bedroom, between them, their friends and their parents they will figure out how to fill it up with junk and stuff that doesn't enrich, but take away from what's important.

Oversized living rooms buy you very little. They are fun to look at. If you are in a family that likes to socialize, have a study or a parlor, a small and intimate wonderful place for people to sit and talk. Have a game room. Obviously, if you are going to play volleyball in it, it will have to be a pretty good size. Make the game room appropriate to the activity.

In general, you are better off with a few more small rooms with specific purposes than with big rooms.

Fixtures and Finishing Touches

When families are young, very often they mistake spending money for the house as being worthwhile or enjoyable. When was the last time you heard a child say "Well, we never got to go to Disney Land, I never got karate lessons, but we sure had a terrific extra pair of bathrooms in our house."

When it comes to picking fixtures, flooring, doors and windows for a new home, I have seen many a husband and wife pick expensive finishing touches that eliminate renting a boat for the summer. High-end fixtures are no better nor more functional than lower priced, quality fixtures.

Investing in a Monolithic Dome vs. Conventional Home

Most homes are good financial investments. They are good because in general they go up in value if they have been constructed well. This is especially true the first few years as landscaping and beautifying the property is taking place. The location also makes a big difference.

Conventional houses usually rise in value just a little more than inflation - and have much higher maintenance and energy costs than Monolithic Domes. The Funds lost in the traditional house's "money pit" are rarely recouped at the final sale of the house.

Betting the sale price of your Monolithic Dome Home will rise at the same rate as an English Tudor is still a risk. Many Americans are not ready for a Monolithic Dome. At the same time, Monolithic Dome resale values all over the country ARE on the rise.

In addition, history has shown us if you build a Monolithic Dome Home of similar or higher quality than the surrounding neighborhood, if you keep it cleaned up with good landscaping, it WILL go up in value.

Money now is better than money later.

Monolithic Dome homeowners save in maintenance, utilities and insurance costs. Every month your dome home will be making money for you in TODAY'S dollars. One dollar saved today is worth a great deal more than one dollar made in the future.

Summary

To recap, build a house that is appropriate to the needs of a family, don't be blinded by the television shows and the advertising that promote bigger and more expensive as better. The size and the expense of the house is not the goal. The goal should be to build the house that is actually needed for the family and use the rest of the money in the family budget for other things.

Many a child has not had the money to go to college because of the cost of the parents' home. One thing is for sure, THAT is not a good investment strategy.