One thing where I have swam against the current on homes.
It is not the biggest investment you will ever make.
It's the biggest expense. (Keep cars out of this)
People lie about the price of their homes.
They like to say, I paid x, and it's worth XXXX now.
Bullshit.
Principal + interest, you paid 2 or three times sale price.
You only gained 1/3, not 4x.
And you paid maintenance, taxes, and insurance.
Probably improvements too.
And your house ain't word a dam nickel until you
sell it.
Then, you are homeless until you buy another.
At current prices.
Or rent, at current rates.
Yes, buying is normally the best move.
But don't be fooled into thinking it's gonna make you rich.
Unless, you buy junk, rehab while living in it, and sell.
Working your way up.
Even then, consider labor and expenses.
You will earn every cent you gain.
I have a friend that had this same philosophy. Homes are a liability not an asset he used to always say. They don't bring in any money and there's always another expense. When I sold my residence that was almost paid off 3.5 years ago I had around $250,000 in equity that went into my bank account when the deal was done.
I moved into one of my own rentals and started building my dream home. Not a dream home by many standards but for a guy who grew up in a singlewide it is a dream home. Said friend told me I should just invest the money and then rent. He said rent was a fixed cost and I didn't have to worry about repairs or other things. He made a bit of sense almost but I told him I was worried that inflation was coming and I wanted money in a home to tie me to the market. I said if homes get really expensive the only way I'll be able to afford one is if I was already in one and rode the market up.
I built for $350,000 which was a bit more than I had in cash but I paid the rest off quickly. Now the home is appraising close to $700,000. If I want to move or buy a new house now I've got a good size chunk of cash to put towards it if I sale the one I'm in. Meanwhile my friend continues to rent and told me the other day that if the market stays this high he will probably never be able to buy a home.
First time home buyers have it rough in this market. Those of us that have been building equity for years can role that equity into something new and often still afford to buy in this market. I'm glad I'm not trying to buy my first home now. I'd be worried to spend $600k plus because there is room for lots of downside if things get bad. For years my home and house payments and expenses felt like pure liabilities. Now that I own it and in this market it feels a lot like an appreciating asset.
Bb
