Omolabake Fasogbon
Often times, man is faced with the dilemma of either buying a car or building house first, especially if there are not enough resources to cater for both.
While both are human’s desires, there have always been arguments for or against which of them should be prioritised, with theorists spelling out repercussions for either decisions.
Justification for man’s choice has therefore birthed several popular sayings like: “You can sleep in your car, but you can’t drive your house,” “a car is a symbol of independence, a car is just a status symbol, “A house is a necessity while car is a luxury,” amongst others.
Of a fact that, there is no hard and fast rule around a choice, as lots of factors informed individual’s decision. Financial experts reckon that humans’ verdict often depends on their respective needs, circumstances and financial goals.
For instance, Managing Director of Oasis Technical Automation Enterprise, Omosanya Idris Oladimeji, a successful businessman controlling businesses across the globe does not own a house despite his influence in the sector he operates. Yet, he has workers who under him are able to own a car and build a house.
His reason, “I really don’t see the need for building a house now. Car remains a major necessity to run around and make more money to plough back into my business. As much as I have the option of renting a house, why expend money on building when I can invest it on business and generate more profit. When I feel I need a house, I can easily buy one.”
THISDAY also spoke with some finance experts who shared their perspectives from economic viewpoint.
According to the Personal Financial Planner at Emerging Africa Group, Toluwa Sanni, owning both car and house is a smart decision, the priority should however be determined by surrounding circumstances.
“If you have a 9am -5pm job far away from home or a business where you need to transport yourself often, then, it might make more sense financially to buy a car and then rent a house while you save up on transportation costs to buy a house in the future,” she averred.
She opined that getting a car in this case would enhance productivity that would guarantee promotion, and in case of entrepreneur, expand business faster while being able to save money for future house.
“What would be financially irresponsible in this case would be to go for a luxury car over a standard car which would be impractical,” she added.
Sanni, added however that one who works from home or lives close to the office would make a good decision to save for a house, being an asset that appreciates more overtime than a car.
“Note also that most homes cost a lot more than buying a car and so it is much easier to save up for a car, buying a home is more of a long term investment for when you have more money saved up,” she stated.
To Managing Partner at Empyrean Professional Services, Mr. Bamgboye Emmanuel, owning a car may be a gateway to opportunities that will provide wealth for building a house.
“Car is a necessity, not a luxury. If buying a car will bring economic benefits to you or your business, why won’t you buy it before buying a house? We live in a clime where people judge you by your outlook and appearance. You need a steady source of income to build a standard house in Nigeria,” he said.
President, Association of Certified Fraud Examiners (ACFE) South-West Nigeria Chapter, Dr. Titilayo Fowokan, goes against getting a car first before a house on the reason that the latter was a viable sustainable income stream.
“A car is a wasting assets as the wear and tear reduces its life. Once you get to the end of its useful life, your net realisable value is low compared to a house that appreciates. Depending on the location of the house, the realisable value can double the purchase value over time.
“Purchasing car can be deferred in the presence of other alternatives like public transportation which will save the cost of repairs and maintenance, including wear and tear. Car to some people is a luxury.
“Shelter is a basic need of man just like food and clothing. Having a house helps to achieve the first level of needs according to Abraham Maslow’s hierarchy of needs,” she argued.
For his part, Managing Director of Refin Homes Limited, Tunde Macaulay, said an individual’s priority should be determined by several factors including available payment options which could be savings, debt or both, age or career stage of buyer as well as maintenance reserve,’ amongst others.
Still, he feels prioritising a house would make a good financial decision.
“If a buyer has the capacity for either one, I would say buy the house first. The value of car starts depreciating the minute you take it from the dealers’ showroom, while more often than not, a house would appreciate in value,” he maintained.
Similarly, a professor of Accountancy at Lead City University, Prof. Godwin Oyedokin, prioritised house over a car. He maintained that this decision comes with a lot of gain for a budget-minded person.
“A house owner has an edge in terms of financial stability, investment potential, building equity and tax benefits,” he said.
He added however, that a car may be a necessity in a situation where there is limited access to public transportation.
In the situation of one’s readiness to acquire both car and house at the same time, Founder and CEO of TheMoneyManual.com, Todd Stearn said, “buying a car first can impact your ability to secure a loan for your home purchase.”
Discover more from HOT SOURCE NEWS
Subscribe to get the latest posts sent to your email.
