Should I Buy a House? Should I Rent? | Lessons To Learn
We have been conditioned to believe that a part of the American Dream is buying a home, but is purchasing real-estate the best investment for you? The answer is, “It Depends.” Depending on knowing what type of person you are, will help answer the question, “Should I buy a house?”
Are you a Fixer?
If you are someone who knows how to fix things, has all the right tools, and more importantly enjoys fixing things, I think it would be safe to say that real-estate is a smart play. The reason why is that labor costs to have someone fix things around your home can range from $50-$100/hour. This is money that you save by putting in sweat equity into your investment!
“Tired of paying Rent?” “Want to build equity?” These are some of the key selling points for buying real-estate. I am a huge advocate that you should not throw money away, but you also need to make sure whether you are making the right decision to help you achieve your goals as fast as possible.
Please make sure that you are accounting for all of the costs! If you end up buying a house that is outside of your price range, this may lead to causing unnecessary stress in your life.
Stress can release toxins into your body, this can result in decreasing your health, placing you into an unattractive mood, and you need to make sure you are 100% confident before moving forward with a large purchase!
For example, let’s say that you are paying $1500/month in rent and when you go to look at homes to buy the mortgage, insurance, taxes, repairs, etc. comes to $1500/month, then it appears that it would make sense to move forward.
However, don’t fall into the trap that the mortgage will be $1500 then you also need to take into account insurance, taxes, repairs, this can lead to having you overextend outside of your budget!
How I almost lost my home
3 years ago, I decided to make my dream become a reality and purchase my first home! Overall, I am very happy that I took the risk to start doing “adult” things and purchase a piece of real-estate. Unfortunately, I almost made a huge mistake.
I had no experience purchasing a house and trusted my mortgage broker to help me with the process. Being that my house was a new construction unit the “estimated payments” did not correctly reflect the amount in taxes that I had accounted for.
This was devastating to find out that for 2 years, I had been making the wrong amount of payments toward my home, and I ended up owing about $8000 in taxes!
I immediately felt crushed, because I was never told that this was going to happen by my mortgage broker. Luckily, I had money in savings in order to make the tax payment, but I know that a lot of people would not have been so fortunate.
Joshua Krafchick, CRPC©, EA