Homes: Asset Or Liability?
Many individuals believe that the best asset that they will ever own is their homes, which will have been lovingly paid for over a number of years with their hard earned income. The idea of homes being the best asset that an individual will ever own is not true in many cases across the nation. In fact, there are many individuals that are finding that their homes are more of a liability than an asset and are jumping ship on their mortgage agreements in record numbers.
So, how do you determine whether owning a home would be an asset or a liability? By looking at a few features of home ownership and determining what is best for your needs. During your review, you may find that becoming a renter is more in your best interest than becoming a home owner. Although home ownership has been marketed as the ultimate realization of the American dream, many individuals are finding that they would prefer to live their life in a rental or condo unit because of the benefits they see.
Additional Maintenance Costs
The additional cost of maintaining and repairing the structure on a regular basis to keep the home attractive and prevent the lawn from turning into a jungle is one thing that many individuals do not take into consideration when looking to purchase a home. This cost can range anywhere from a few hundred to several thousand dollars each year, which can be to much to bear for home owners that are strapped for cash and barely making ends meet.
Additional Bills
Many first time homebuyers do not realize that they will have many additional bills that they will be responsible for paying in addition to their mortgage payment. When an individual rents an apartment, the only bills that they have to pay are their monthly rental payment and their electricity bill. Everything else associated with the apartment complex is paid for by the rental company. Most home owners are responsible for their mortgage payment, an electricity bill, a gas bill, a water bill, a sewer bill, a trash bill, and annual property taxes.
If you are not prepared to sacrifice the time, energy, and money that is needed to be a good home owner that maintains their property and pays these numerous bills on time regularly, then you will be much better off as a renter. If you are prepared for these issues and want to build equity in a home that you can customize however you want, then you are ready to purchase a home.
- Visualizing How the Things You Own, End Up Owning You Due to the popularity of the visualizing how your stuff owns you post from several weeks ago, I thought it would be beneficial if I documented exactly how I use a simple monthly calendar and a few personal finance metrics to visually represent how many hours, days, even weeks, I......
- Buying a Fixer Upper with an FHA 203k Loan Most people are familiar with using an FHA loan to buy a home. If your home and income qualify, it can be one of the most competitive financing products out there. However, what if you find a beautiful piece of coal that just needs some polishing to become a diamond?......
- What You Need to Know About Reverse Mortgages One of the newest financial innovations being advertised on the market today is the reverse mortgage. Commercials showing happy seniors holding handfuls of money say that reverse mortgages are a great thing if you are above a certain age but the commercials are not long enough to fully explain what......
- Tips For Understanding the Home Buyers Tax Credit In recent months, the federal government implemented one of the biggest financial incentives in history to assist first-time home buyers. Those who qualify for the credit can get up to $8,000. In order to get the tax credit, you have to know the rules. Here is a brief rundown of......
- 3 Credit Lessons from the Economic Crisis Governments are meant to lead by example, regardless of whether they intend to or not. Sometimes they give us examples of what not to do as well as examples of what to do. Wall Street executives also happen to be unwitting role models to people all over the world. Still,......
