Is buying a house worth it? Forbes reached out to more than 20 financial experts and real estate professionals and asked them that question. A hefty majority, 57 percent, said that buying a home is a good investment. Roughly a third (38 percent) took a more moderate line, saying that it depends on various factors. Meanwhile, 5 percent argued that residential homes were inferior investments, particularly when they were held up against other, more profitable options. What do you think? Is buying a house worth it?
Is Buying a House Worth It?
If you have the interest and financial means to become a homeowner, buying a home could be a smart move. Deciding if it’s the right one for you involves recognizing the pros and cons of homeownership and deciding if you’re ready for it.
The Advantages of Buying a Home
Owning a home has long been part of the American dream, and it clearly has its perks. According to HomeLight, owning a home offers numerous advantages:
- Roots: Owning a home gives you a chance to be part of a community and establish deep relationships within your neighborhood.
- Wealth: Properties generally require maintenance, but they tend to appreciate over time. That typically makes them a viable way to build wealth over time.
- Freedom: As a homeowner, you’re in charge. You get to make choices about style and priorities. Whether it’s a matter of being environmentally friendly or fashionable, you set the rules and make the final decisions.
- Forced Savings: In some ways, a mortgage is a forced savings account. As you pay back your mortgage and pay down your debt, you’re building up equity and value. Technically, you could access it by refinancing, but that’s not as easy as simply making a withdrawal from a bank account.
- Privacy: As a homeowner, you no longer need to worry about a landlord wanting to stop by to inspect the property to make sure that you’re treating the place properly. It’s your space, and you can enjoy the additional privacy without anyone looking over your shoulder and judging how you’re using it.
- Pride: There is pride in ownership. Owning a home means that you can relax and put your own stamp on the space. It creates a sense of independence and freedom that you can’t put a price on.
The Disadvantages of Buying a Home
Why would you hesitate to buy a home? As InCharge indicates, there are some potential downsides:
- Upfront Costs: Buying a home means coming up with money for a down payment, closing costs, moving costs, and other expenses. You may need to spend some time saving up for these upfront costs.
- Limited Mobility: Owning a home limits your mobility, making it more difficult to quickly move for work, school, or other opportunities.
- Illiquidity: Homeownership does build wealth, but that wealth is hard to access, sell, or change quickly.
- Depreciation Risks: Property normally rises in value over time, but there is no guarantee that it will do so. Depreciation is always a risk.
- Maintenance Costs: While renters can leave many household chores to their landlords, homeowners must make arrangements to deal with all maintenance and repairs as well as their costs.
Are You Ready to Be a Homeowner?
How do you know if you’re ready to be a homeowner? Money Crashers suggests you start by considering whether you have the financial means. What is your financial picture? Do you have the kind of credit score and stable income needed to get approved for a mortgage? Will the mortgage that you can get approved for be enough to purchase a house that you’d like to own? Then, think about your lifestyle. Are you confident that you want to stay in one place? How committed are you to the idea of being a homeowner?