In this world, every working individual would like a have their dream home one day. They work hard in their life to buy a house in their life & they say “this is my biggest asset”, Well somewhat they are true. But ever wonder if it’s really worth it or not. So, let me start with the definition of an asset- “Something valuable that an entity owns, benefits from, or has use of generating income.” Ask yourself, does it fulfill the definition of your home?
Is your home a valuable entity or the land? because the value of land will appreciate overtime not your home!
What benefits do you get form your house other than shelter, which you can easily rent out at much lower cost than your monthly EMIs. Still you don’t have to lose out from your life savings for the down payment of your home?
Is your own home generating any income? Unless you are renting it out! Which most people don’t. But apart from paying your big buck EMIs, you pay taxes for your property, repair & maintenance every now & then.
So, your biggest asset now seems to be your liability?
Study suggested that almost 70% of millennial regret after buying their house. Here is what expert says: “Millennial are so eager to become homeowners that some may be inadvertently cutting off their nose to spite their face,” says Ryan Bailey, head of Bank of the West’s retail banking.
Reason behind the regrets:
Reason 1: Overspending on down payments of the house. The survey found one in three millennials dipped into their retirement accounts to pay for their homes.
Reason 2: Underestimating going cost. When you buy a home, the expenses don’t stop once you move in, Millennials understand basic costs, such heating and electric bills, insurance etc. Also, when you’re a homeowner, you can’t call your landlord to fix things, so you want to make sure you have a little extra cash in the bank.
Reason 3: Settling for something that you don’t like. Most common is when a home buyer buys a house far from the city reach just have an own house because buying house in posh locality will cost more so they settle far away. This regrets a lot because daily commuting would not be easy.
Hence, buying a house always seems pleasant but be aware of the facts & consequences. Happy buying houses!!
Source: CNBC, Bank of the West,