Smart Moves by Ellen James Martin

The Pros and Cons of Big and Small Houses

Eric Tyson and Michael Crowley are both empty nesters, with offspring away at college. Both are owners of whopper-sized houses. But the two have very different visions of the best housing situations.

Crowley, a divorced real estate broker, lives alone in a 5,700-square-foot Victorian house with three family rooms, four bathrooms and six bedrooms. Most of the bedrooms are empty of furniture and never used. That's one reason he's looking forward to the day his son graduates from college. Then he'll sell the house and move to an 1,100-square-foot condo he already owns.

"I can't wait to be free of a mortgage and all that home maintenance so I can travel more," says Crowley.

Tyson, a personal finance author and the father of three college-age sons, owns a traditional 5,500-square-foot house. But he and his wife have no intention of downsizing. They admit to a sentimental attachment to the suburban property where they raised their children, and love owning a place with ample elbow space to accommodate visiting friends and family members.

Both Crowley and Tyson acknowledge that ownership of a huge house imposes a lot of costs in terms of time, money and energy. Both face high utility bills and rising property taxes. For Crowley, those expenses are a deal-breaker. Not so for Tyson, the author of "Personal Finance For Dummies."

At this point in the economic cycle, there are many crosscurrents of thought among Americans of different ages as to whether it's better to live small in a low-maintenance housing unit or to enjoy the benefits of a large property with less convenience, but loads of living space.

For buyers with the wherewithal to choose between ownership of a compact place or a big one, here are a few pointers:

-- Consider both the pros and cons of the two options.

Mark Nash, a longtime real estate broker and author of "1001 Tips for Buying and Selling a Home," says nearly all buyers face trade-offs.

"Making a priority list is the absolute key. You have to decide which features are the most important for each person in your household. Your best home-style is going to be determined by your lifestyle," he says.

If you're married or living with a partner, Nash recommends you sit down with the other person and each rank your housing priorities. Then compare notes and, if there are differences, compromise.

Though Nash is single, he faced his own set of trade-offs some years back when he decided to sell his fancy 3,200-square-foot house in an upscale city neighborhood in favor of a 1,000-square-foot condo-apartment in a middle-income suburb. He could have moved to a larger home, but his higher priority was to save enough money to also buy a modest lakeside getaway.

"By downsizing to the condo, I bought myself some breathing room financially. At the time, going smaller was definitely the right decision for me," Nash says.

His housing transition came with some sacrifices. Though he liked his neighbors in the condo complex, he missed the greenery that surrounded his city house. He also missed the privacy of a single-family property.

"Sometimes I wanted to be alone, but that was hard living so close to other people in a condo building. Every time I stepped into the hallway, people wanted to talk. I'd also hear noise coming from their apartments, which felt like a minor invasion of my privacy," Nash says.

-- Ask yourself how much space you truly need for entertaining.

Among those who hanker for a large home are buyers who love to throw parties, as well as people who believe that home entertaining is central to the fulfillment of their professional obligations.

"I know CEOs who think they must have a very big place to show off to clients or colleagues. They feel the need for this, even if their spouses don't want all the complications of big house upkeep," Nash says.

If home-based entertaining with large events is something you value highly and you're comfortable with the payments on a big property, why not go for it? But if you're interested in the financial benefits of living smaller, Nash suggests you consider some less expensive options for your parties.

"Why not take your guests to your favorite restaurant and rent a space for your parties? That could be a lot less expensive than maintaining a big house just for entertaining," he says.

-- Remember your storage needs before you buy.

Sid Davis, a real estate broker and author of "A Survival Guide For Buying a Home," says many homebuyers like big houses because they place a premium on having lots of storage space.

Assuming you can afford it, Davis says buying a large house for extra storage space could be a reasonable idea. After all, a large house could save you a significant sum over the rental expense required for the long-term use of a self-storage unit.

But he cautions against the assumption that ownership of a big house will let you keep accumulating ever more possessions.

"Face it, no matter how big your storage areas are, eventually you'll run out of space if you keep shopping without ever purging. So don't deceive yourself about that reality," Davis says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)