Benzinga
6 Reasons Why You Shouldn’t Buy a Home
Owning a home may be the epitome of the American dream, but it is not set in stone! So, if you are toying with the idea of giving up your own home, then please go ahead. However, as home ownership is perceived as the hallmark of wealth, giving it up will bring many controversies. Individuals in your circle may even criticize. But regardless of what the majority of the population thinks, here are good reasons to never buy a home. Homeownership costs are lifelong Homeowners often argue that paying rent is expensive, but homeownership is just as expensive. Homeowner costs do not end with this initial payment. It comes with life-long costs, which, compared to rent, will affect your finances and take away your peace of mind. For example, utility bills such as electricity and water are unavoidable and must be paid every month. According to Zillow, these bills alone cost owners between $ 2,300 and $ 4,600 annually. Add recurring costs like insulation, heating and cooling maintenance costs, home insurance, property taxes, HOA fees, mortgage payments and yard maintenance, and you’re likely to end up spending more annually than a tenant who lives in a house similar to yours. Furthermore, there is no exclusion option. Once you buy a house, you commit to these costs, unless you decide to sell it. On the other hand, when you rent or rent a house, you can always choose not to participate. For example, when times get tough, you can always move to rent-based apartments until you recover again. A home is not a real estate investment Pro-home individuals will try to convince you that your home is an investment. While there is some truth to this, buying a home as your primary residence is not the same as buying one to rent or resell. Because? Well, when you buy a house for a property, it brings a return on investment. For example, when you buy a condo and rent or lease, it offers a return on investment at least every month or every six months based on the terms of your contract with your tenant. But when you buy a house to live in, you will have invested, but you will have no return. If anything, you will be the one who will be applying for maintenance money, mortgage payments and all the other costs mentioned above. In addition, a home can never be an investment if you don’t plan on selling it at any time. What makes an investment an investment is its control over your property. In other words, a real estate investment is referred to as such because you can buy it when its value is low and sell it when the value is high, making a profit. But your primary residence is different because you cannot just wake up one morning and decide to sell it, unless you are pressed for money, which in most cases means that you will accept any offer that results in losses. In addition, when you sign a home purchase contract, your money is automatically blocked and the only way you can get it back by selling it or taking out a loan for purchase When you rent or rent, you release your money and you can use you to invest in opportunities that increase your wealth. Of course, you can argue that rent is expensive, but that is not a good enough reason to buy a house, as there are many modern, well-equipped, low-income apartments that will help you keep costs down. House prices are not always high It is true that the value of a house increases over time. Due to inflation, a home purchased for $ 100,000 is now worth more than $ 600,000. This means that selling it will bring good profits. However, keep in mind that the housing market is incredibly volatile. The value of your home may be high now, but it could drop dramatically due to a crash in the housing market and / or other external factors. For example, during the great financial recession of 2007-2009, real estate market values declined sharply, which led sellers to incur massive losses. Existing listing values fell from $ 7.1 million to $ 4.1 million, marking a 25% drop in the value of homes sold during this period. What does this have to do with buying a home? Well, you can buy a house expecting its value to increase, but instead find that its value is incredibly low when you urgently need to sell it. The result? You end up selling at a loss. Remember that some factors are beyond your control. For example, the real estate market may not break down, but due to other components, such as increased crime, the value of homes in the neighborhood in which you purchased decreases. Such an occurrence will make it almost, if not impossible, to find a buyer who is willing to take it out of your hands, even at a purchase price. In other words, unless you have a magic crystal ball, there is no telling what will happen next with the general or local real estate market. So if you are buying a house now with the hope that its value will increase in the future, it is best not to buy one, because you may be very disappointed. Tie You Up Unless you are wealthy and can buy a home in different parts of the country, ownership of a home ties you to a location. If you get a fantastic job or an entrepreneurial opportunity, you can’t just pack up and leave. First, you need to put your home up for sale and find a realtor to help you sell it. You also need to be concerned with market values and, as you are in a hurry to move on to the next location, you are likely to sell to the first buyer because you don’t have time to wait for better deals. But when you’re renting, all you have to do is pack your bags and leave. Even if you are not moving, buying a home automatically means that you will have to deal with the community around you for the rest of your life, especially if you do not plan to sell it. For example, even if you don’t like your neighbors, you will have no choice but to learn to tolerate them. When you rent and don’t like your neighbors, the option of leaving is always viable. Homeownership is not for everyoneNot everyone is tailored for homeownership. It comes with responsibilities that some people just don’t have the courage to deal with. For example, when you buy a house, especially in an HOA community, you need to ensure that the yard is well maintained, clean the gutters, regularly repaint the exterior and other similar tasks. Not everyone is made for that level of responsibility, and if that describes you, never buy a home. Home ownership doesn’t define you Having a modern condominium is great, but you can still enjoy living in it without having to deal with the stress of the property simply by renting. Home ownership does not define your success in any way. So, if you never wanted a house, don’t buy it because your colleagues own several houses. After all, home ownership leaves little to be desired. See more at Benzinga * Click here for trading options at Benzinga * Amazon opening three facilities in San Antonio * The psychology behind the M1 Finance platform and its focus on financial well-being (C) 2020 Benzinga. with. Benzinga does not provide investment advice. All rights reserved.