Is a House a Worthwhile Investment? ...


Although some people might encourage home buying, there are good reasons not to invest in a house. Not that home buying isn't a good investment -- sometimes it can be. But if you buy at the wrong time, you could lose money. Ultimately, you have to decide whether a home purchase is right for you. However, it's important to be realistic. Here are seven reasons not to invest in a house.

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It's NOT Always a Good Investment

The truth of the matter is, home purchases are not always good investment. This is one of the main reasons not to invest in a house. If you decide to purchase, research the local market. Too often, people buy homes, only to see their property values decline in a few years. And if home values don't improve, it can be difficult to sell or they lose money on the deal.


You'll Pay a Mountain of Interest

Unfortunately, if you pay $200,000 for a house, you don't actually repay the bank $200,000. Every mortgage loan has an interest rate tied to it, which is basically the bank's fee for providing funds. Even with a low interest rate, you'll ultimately pay hundreds of thousands more than the original purchase price. Sure, you can write off mortgage interest and reduce your taxable income, but this savings doesn't compare to the interest you'll pay over 30 years.


It's Tempting to Buy More than You Can Afford

Even if a mortgage lender pre-approves your application and offers a specific amount, this amount might be too much for your budget. Mortgage lenders don't take into consideration other expenses, such as childcare expenses, insurances and other monthly payments that don't show on your credit report. When shopping for a home, it's easy to get caught in the excitement and overspend.


Permanent Maintenance and Repairs

You can buy a newly built home, but there's no escape maintenance and home improvement costs. And unfortunately, these costs can drain your bank account. As a renter, you're not responsible for many of these expenses.


You Might Wipe out Your Savings Account

Buying a home isn't cheap, and some people clean out their savings account to make a purchase happen. You have to pay a down payment, which can be as high as 5% of the purchase price, and there are closing costs which can average between 2% and 5% of the purchase price, according to Zillow. It might take years to save money to purchase a home; and after the purchase, you're left with nothing in the bank.

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Warren Buffett

Doesn't Offer the Flexibility to Move

Home buying might be an excellent investment if you're looking to stay in one place for many years. But if you enjoy bouncing around from place to place, or if your job requires frequent moving, buying might not be worth the investment. It can take years to recoup money spent for down payments and closing costs. If your house declines in value before you're able to recoup, you may have to sell for far less than you paid.


You May Get Stuck with the House

When you're renting, simply give your landlord a 30-day notice once your lease is about to expire and you're free to move. It's not that easy when you own. You have to sell the property and this can take many months, depending on the local real estate market. And sometimes, homes don't sell.

Everyone's situation is different. For some, buying a home is a terrific investment. But it's not a good investment for others. Weigh the pros and cons, and then decide if it's the best decision for your family. Do you think home buying is a good investment, and why?

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Where Thoughts and Opinions Converge

Obtaining a mortgage is not as simple prior to the economic crisis. Just like any investment there are risk but if you intend to invest long term home ownership is rewarding.

Don't buy in haste. Property buying is a good investment, you can always rent it out!

This is b.s

This is nonsense all your points are bullshit

With an fha loan the down payment is 3.5%. There is also "seller concession." That means the seller covers the closing cost in cash, but it gets rolled into your total price. For me, I bought a duplex. I rent the bottom apartment and my family and I live upstairs. The rent from the tenants cover or mortgage. When we want to move (into our next duplex) we will rent out the upstairs, too.

This is silly

This is horrible advice. Obviously don't buy a home until you can afford it without wiping out your savings (i.e. The definition of "being able to afford it), but building equity is one of the best things you can possibly do.

This is why I will always rent

One good reason - giving your landlord your hard earned money and nothing to show for it. Buying a house is cheaper as mortgage costs less then renting. Even if there is interest you will still have bricks and mortar. If you rent you are subject to eviction, revenge eviction ( needing something done so getting kicked out) hiking up the rent, never having security knowing that even as a long term renter that is your space.if times are hard you can resell your own house. I would urge anyone with the means to purchase even the smallest place. It makes good financial and psychological sense.

Renting is just as good as burning thousands of dollars a year with no investment to show. Many mortgages are the same or less than the cost of renting and at least this is putting living expenses to a good cause. Of course you will pay interest but it's also very difficult saving for a house when your rent money is practically being thrown into a black hole of highway robbery.

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