When you listen to people talking about buying a house, whether it’s their first or fifth, they will usually say something along the lines of it being a good investment. It can be something to give your kids when you’re gone. It’s a place to call your own, where your family can make some incredible memories. However, is it really that great investment you think it is?
Is Buying A House Necessary?
Many people consider buying a house a must. A necessity. A right of passage. However, you don’t have to look at it like that. A house is more of an expensive luxury than an investment. That’s great, if you know you can afford this expensive luxury. Go out and buy a new home and make it yours. The definition of an investment is something that will make you a good return, and a house doesn’t always do that depending on the market and the area you’re in.
Of course you can invest in real estate, and many do. That isn’t the point. The point is that you don’t need to buy a house to have succeeded. You need to know what’s right for you, and not what’s right for somebody else. If a home is right for you then go have at it! You’ll get peace of mind and a wonderful place to live. Just don’t expect to make a huge return on your investment if you come to sell in the future.
A house will require ongoing payments to make it work, such as bills, mortgage payments, taxes, home repair, insurance, and the like. Regular investments don’t usually require this sort of thing. A house doesn’t generate cash flow either, which is what a traditional investment does. If that’s what you want, make sure you put your money into traditional investments, like stocks and bonds. Then, simply enjoy living in the house you’ve chosen for your family – it’s true purpose!
This post is in no way telling you that buying a house is the wrong thing to do. This decision works really well for some people, and they love their house for years to come. Others prefer to simply rent a place out so they can move quickly and easily, and have their landlord do all of the work for them. Whatever your decision may be, make sure you don’t throw the word ‘investment’ around lightly. You could call your home an investment if you’re making positive rental income from it, but not really in any other situation.
Your home is shelter, and a place for your family to come back to each day. It’s a place that can give you a source of pride and enjoyment. It could also potentially save you money on renting in the long run. It still isn’t what you would call an investment. Looking at things a little differently should help you to make better financial decisions for yourself, not financial decisions based on what others say you should do!