“You are going to make the biggest investment in your life” – I remember my agent claiming so when I was looking for home seven years ago. I had, however, doubt over his claim.
A home is more than just an investment for you. A lot of non-financial factors are involved here and that too go into the process of decision making. A home is often perceived as a security and it is something that an investor claims to be his/her very own.
Now if I want to sell it, I have to clear $10,000. At this point, it is no longer an investment for me. I bought our house when market was high, in anticipation that our investment would attract more value. But right now, I own a house that is lesser in value compared to what I have already paid for it.
I’ll consider myself fortunate to get what is owed on my mortgage. And even then, I’ll have to clear commissions and closing costs during sale of the house. I can take initiatives for selling it on my own but I cannot avoid that closing costs. Furthermore, ‘Sale by Owner’ requires a lot of work than having an agent dealing with the matter.
Buying a house – It could be a gamble
Truly speaking, you will take a big risk – better to say, play a gamble – if you invest for a house as housing market is now crapshoot. You can never be sure whether you will gain or suffer loss.
Majority of us hardly buy a house just to sell it two or three years later. If you want to enjoy more out of your house, you have to live in it for a long period of time. And there is wise advice from a wise person – If you are not going to live in a house for a long time, don’t invest on it as it is more likely that you will have to go through down cycles.
If you don’t want to stay in the house during tough times, chances are almost zero that you will make a fortune out of a sale. By the time when you will pay for taxes, repairing costs, interest, maintenance and other utilities, it will get more difficult to reach a ‘break even’ point.
Before taking a plunge to buy a home, consider how much you will get to gain out of your primary residence. If research and calculation give a hint that a house won’t be a good financial investment on your part, you will be less frustrated in times of its sale.