Most people buy into the myth that buying a home is the best investment you can ever make...but more often than not that idea is just a myth.
Take the US as an example. The average house in N. America appreciates 5 to 6 per cent per year, which sounds great at first glance. In 10 years the value of your house will almost double.
But most people don't take into account the interest rate where the average homeowner is paying approx. 6% annual interest on a typical 30-year fixed mortgage.
So the interest alone is wiping out the gains on your annual 6% appreciation. On top of that you are paying 1% property tax year every year, maintenance and repair costs, etc.
Making matters worse is that for the first ten years or so most or all of your payments are applied to the interest, so you wont have any actual ownership or equity of the home,
or very little...for the first ten years. And consider that much of the appreciation of your house is simply due to inflation. So if inflation is 5% per year then that alone is undermining your actual appreciation.
I have purchased (built) my house with cash, if you work hard and most importantly - smart, you can do it.
I'm not looking at what it's worth because I am never selling it but looking at what people pay in the neighborhood I know it's worth at least 5x from when I purchased it.
As for maintenance costs, It's really cheap if you do it right in the first place (good materials), in ~10 years I had only few minor faults that cost me close to nothing.
In my family home that's about 60 years old there was not much needed as well but again, good materials were used.
Here in Europe we build houses with quality in mind (except houses built by developers for sale) and they last 100+ years no problem.
From what I've seen in the USA, the quality is very poor so you may have bigger expanses in terms of maintenance.
I wouldn't sell it even for 100x - it's my home, from time to time I get some real estate dealer cards in my mailbox and once even from some family looking to buy a house (dealer in disguise ?
).
If it was for sale, it would be on the market! dumb people
I'm not saying that owning a house is a bad thing, there are certainly benefits to home ownership. It provides you with a place to live, you can borrow against it,
you can pass it down to your kids, etc. If you just want to have a place to live and call your own then owning a house may be a great idea for you, but don't think of it as some kind of
incredible financial investment because it is not as great as you may think.
Borrowing against your house (mortgage) is the worst and most idiotic thing you can do in your life, you're better off borrowing money from your local gangsters.
You need to own at least one house for yourself, otherwise you are homeless guy renting apartments (burning money).
