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6 reasons why you should not buy a house
Owning a home could be an example of the American dream, but it is not engraved in stone! So, if you have played with the idea of giving up ownership of a house, then, in any case, go for it. However, given that home ownership is perceived as a hallmark of wealth, giving it up is meant to bring you a lot of controversy. People in your circle might even criticize. But no matter what the larger population thinks, here are good reasons to never buy a house. Property costs do not end with the initial payment. It comes with lifetime costs, which, compared to renting, will create a stain on your finances and take 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 homeowners between $ 2,300 and $ 4,600 a year. Add recurring costs, such as insulation, heating and cooling costs, homeowners insurance, property taxes, HOA fees, mortgage payments, and yard maintenance, and you may end up spending more annually than a tenant living in -a house similar to yours. Moreover, there is no option to give up. Once you have bought a house, you incur these costs, unless you decide to sell it. On the other hand, when you rent or rent a house, you can give up at any time. For example, when times get tough, you can switch to income-based apartments at any time until you’re back on your feet. A house is not a real estate investment Pro-home people will try to convince you that your house is an investment. While there is some truth in this regard, buying a home as your primary residence is not the same as buying a home for rent or resale. Why? Well, when you buy a home for real estate, it brings you a return on investment. For example, when you buy an apartment and rent it or rent it, it gives you a return on investment at least every month or every six months based on the terms of your agreement with your tenant. But when you buy a house to live in. , you will be invested, but you will not get any return. If there is anything, you will be the one to put money into it through maintenance, mortgage payments and all the other costs mentioned above. In addition, a house can never be an investment if you do not intend to sell it at any time. What makes an investment an investment is control over its 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 main residence is different because you can’t wake up one morning and decide to sell it unless you’re pressed for cash, which means that in most cases, you’ll get any offer that will lead to loss. Also, when you sign a home purchase agreement, your money is automatically blocked and the only way you can get it back is by selling it or taking out a equity loan. When you rent or lease, you release your cash and you can use it to invest in opportunities that increase your wealth. Sure, you could argue that rent is expensive, but that’s not a good enough reason to buy a home, because there are a lot of modern, well-equipped, low-income apartments that will help keep costs low. Home values are not always high It is true that a home increases in value over time. Due to inflation, a house bought for $ 100,000 is currently worth over $ 600,000. This means that selling will bring you good profits. However, keep in mind that the real estate market is incredibly volatile. The value of your home can now rise, then drop sharply due to a collapse in the real estate market and / or other external factors. For example, during the great financial recession of 2007-2009, real estate market values fell sharply, which saw sellers suffer massive losses. Existing listings 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 it to increase in value, but instead you find that its value is incredibly low when you need to sell it. The outcome? You end up selling it at a loss. Keep in mind that some factors can’t control you. For example, the real estate market may not collapse, but because of other components, such as increased crime, the value of homes in the neighborhood where you bought your home decreases. Such an event will make it almost, if not, impossible to find a buyer who is willing to take it out of his hands, even at a purchase price. In other words, if you do not have a magic crystal ball, it is not known what will happen next to the general or local real estate market. So, if you buy a house now in the hope that its value will increase in the future, then it is better not to buy one, because you could be massively disappointed. It connects you if you are not rich and you can afford to buy a house in different parts of the country, the property binds you in one location. If you have a great job or an entrepreneurial opportunity, you just can’t pack up and go. First, you need to put your home on the market and find a real estate agent to help you sell it. You also need to worry about market values, and since you’re in a hurry to move to the next location, you may be selling to the first buyer because you don’t have time to wait for better deals. But when you rent, all you have to do is pack up and go. Even if you don’t move, buying a home automatically means that you will be dealing with the surrounding community for the rest of your life, especially if you do not intend to sell it. For example, even if you don’t like your neighbors, you have no choice but to learn to endure them. When you rent and you don’t like your neighbors, the option to leave is always viable. Property is not for everyone Not everyone is excluded for property. It comes with responsibilities that some people simply do not have the skin to manage. For example, when buying a home, especially in a HOA community, you need to make sure the yard is well maintained, clean the gutters, repaint your exterior regularly, and other similar tasks. Not everyone is excluded for this level of responsibility, and if this describes you, then never buy a home. The property does not define you Proposing that a modern apartment is wonderful, but you can still enjoy living in it without having to deal with the stress of the property by simply renting. Property does not define your success in any way. So, if you’ve never wanted a home, don’t buy it because your colleagues own more homes. After all, home ownership does not leave much to be desired. See more from Benzinga * Click here for trading options from Benzinga * Amazon opens three San Antonio facilities * Psychology behind the M1 Finance platform and focuses on financial well-being (C) 2020 Benzinga. com. Benzinga does not offer investment advice. All rights reserved.