{"id":6603,"date":"2015-05-09T10:04:24","date_gmt":"2015-05-09T17:04:24","guid":{"rendered":"http:\/\/couponshoebox.com\/tips\/?p=6603"},"modified":"2015-05-09T10:03:18","modified_gmt":"2015-05-09T17:03:18","slug":"when-buying-a-home-isnt-a-good-investment","status":"publish","type":"post","link":"https:\/\/couponshoebox.com\/tips\/when-buying-a-home-isnt-a-good-investment\/","title":{"rendered":"When Buying a Home Isn’t a Good Investment"},"content":{"rendered":"

If you’ve ever talked to a real estate agent, you’re likely to come away thinking that buying a home is the best investment you’ll ever make. Buying a home can be a good forced savings plan (at the end of your mortgage, you have a big asset that you can tap into later, usually be selling for a large chunk of capital), but the home you live is rarely a true financial investment.<\/p>\n

It’s even worse in certain circumstances. I bought my home thinking of it more as an emotional investment, and something that could allow us to break even over rent. In the end, while it did provide some emotional satisfaction and stability, it ended up costing more than I would have liked — and costing more than we would have spent in rent for the years we were in the house — with no return.<\/p>\n

Before you buy, says Rocky Lalvani, a Financial Coach and MBA, carefully think about the situation. There are 4 red flags that indicate that buying a home is probably not the right move for you:<\/p>\n

1. You Plan to Move Soon<\/h3>\n

This is one of the biggest reasons to avoid buying a home. Lalvani says you should plan to live in an area for five to seven years if you plan to buy. “By the time you pay selling costs and everything you spent on making the house yours, it’s hard to get ahead,” he points out.<\/p>\n

2. You are in a Low Rent Area<\/h3>\n

Lalvani says that if you live in an area where rents are considerably less than your monthly mortgage would be, you should think twice. This is especially true if the taxes, upkeep, and insurance far outstrip rents. You might be better off renting and then taking the difference and investing it<\/a>. You are more likely to see real gains over time, including gains that beat inflation.<\/p>\n

3. The Home You are Considering is Expensive for the Neighborhood<\/h3>\n

You don’t want to buy the most expensive home in a neighborhood, says Lalvani. “The cheapest home tends to do best on a resale.” If the cheapest home in a neighborhood isn’t quite what you want, look for something that is midrange. Stay away from the high end, because you’ll want to sell it, and buyers may not go for the expensive upgrades.<\/p>\n

4. The Area is in Decline<\/h3>\n

One of the best things you can do before you buy a home is research the location. Real estate is very local, and you want to take a look at the neighborhood. What’s nearby? Have home prices been stagnant? Are they in decline? Are a lot of people moving out to be in better school districts? You don’t want to jump on board a sinking ship; you might not be able to get rid of the home later if the area continues to decline.<\/p>\n

In the end, the decision to buy is very personal. Carefully consider your options, and don’t be afraid to decide to rent if that will work out better for your situation.<\/p>\n","protected":false},"excerpt":{"rendered":"

If you’ve ever talked to a real estate agent, you’re likely to come away thinking that buying a home is the best investment you’ll ever make. Buying a home can be a good forced savings plan (at the end of your mortgage, you have a big asset that you can tap into later, usually be […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[174],"tags":[520,265],"_links":{"self":[{"href":"https:\/\/couponshoebox.com\/tips\/wp-json\/wp\/v2\/posts\/6603"}],"collection":[{"href":"https:\/\/couponshoebox.com\/tips\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/couponshoebox.com\/tips\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/couponshoebox.com\/tips\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/couponshoebox.com\/tips\/wp-json\/wp\/v2\/comments?post=6603"}],"version-history":[{"count":1,"href":"https:\/\/couponshoebox.com\/tips\/wp-json\/wp\/v2\/posts\/6603\/revisions"}],"predecessor-version":[{"id":6604,"href":"https:\/\/couponshoebox.com\/tips\/wp-json\/wp\/v2\/posts\/6603\/revisions\/6604"}],"wp:attachment":[{"href":"https:\/\/couponshoebox.com\/tips\/wp-json\/wp\/v2\/media?parent=6603"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/couponshoebox.com\/tips\/wp-json\/wp\/v2\/categories?post=6603"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/couponshoebox.com\/tips\/wp-json\/wp\/v2\/tags?post=6603"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}