I think that yes a house can be a sensible asset as long as you are not buying too much house. The utility benefit can be great in terms of saving on potential rent (depending on where you choose to live). A mortgage is the minimum you’ll pay for accommodation, whereas rent is the maximum. But a sensible house in a good area may also appreciate in price (but its kind of irrelvent unless you plan to downsize in the future as you’ll always need somewhere to live). One of the biggest benefits comes from the peace of mind you get from not being evicted!
Generally if you plan to live in a home > 5 years then it’s a better investment to buy the home. Essentially there’s the costs of buying and selling a home and those are hard to recoup in only a couple of years. >5 you usually have good appreciation on your home prices.
I just purchased my first home at 24. It made sense when the cost of rent equaled the monthly obligation of owning a home. I know I am staying in the area for 5 or more years so I am happy with the risk. I also have the possibility of renting this home out when I eventually out grow it.
Renting a cheap room in my 20s and early 30s was easy, but as I get older, the weirder it would become. Picture a man in his 50s living like a 25yo – yeah, a little cringe-worthy. Hence, buying a home seems to make more sense as you age. Once you become quite old, renting an apartment could be wise so that you monetize your home equity and don’t leave a house to your kids/heirs.
For a younger person from a financial perspective, once someone marries and has kids, buying a home makes sense since you’ll have potentially two incomes to cover PITI. You also have the consumption aspect of homeownership – the enjoyment of having your own house and making memories in it.
It’s always wise to try to stay in a house for at least seven years or so to avoid racking up transaction costs.
For me, I’ll continue to rent a room on the cheap for a while. If/when that special gal comes along later in my 30s or 40s, then I might look to buy a house.
When I became an adult and started considering home ownership, way back in the 80’s, the rule of thumb was you should live in the home for at least 7 years to make if worth while. Other indications are you have a steady job/career with good prospects, you are able to save for a deposit and settlement costs, you are interested in home ownership and it’s inherent responsibilities, and you can afford the mortgage payments within about 25% of your income.
When you are debt free and have 3-6 months of emergency funds in the bank.
I think that yes a house can be a sensible asset as long as you are not buying too much house. The utility benefit can be great in terms of saving on potential rent (depending on where you choose to live). A mortgage is the minimum you’ll pay for accommodation, whereas rent is the maximum. But a sensible house in a good area may also appreciate in price (but its kind of irrelvent unless you plan to downsize in the future as you’ll always need somewhere to live). One of the biggest benefits comes from the peace of mind you get from not being evicted!
Generally if you plan to live in a home > 5 years then it’s a better investment to buy the home. Essentially there’s the costs of buying and selling a home and those are hard to recoup in only a couple of years. >5 you usually have good appreciation on your home prices.
When you can AFFORD it!
I just purchased my first home at 24. It made sense when the cost of rent equaled the monthly obligation of owning a home. I know I am staying in the area for 5 or more years so I am happy with the risk. I also have the possibility of renting this home out when I eventually out grow it.
It makes sense to own your home if you like to grow food and need a yard.
Renting a cheap room in my 20s and early 30s was easy, but as I get older, the weirder it would become. Picture a man in his 50s living like a 25yo – yeah, a little cringe-worthy. Hence, buying a home seems to make more sense as you age. Once you become quite old, renting an apartment could be wise so that you monetize your home equity and don’t leave a house to your kids/heirs.
For a younger person from a financial perspective, once someone marries and has kids, buying a home makes sense since you’ll have potentially two incomes to cover PITI. You also have the consumption aspect of homeownership – the enjoyment of having your own house and making memories in it.
It’s always wise to try to stay in a house for at least seven years or so to avoid racking up transaction costs.
For me, I’ll continue to rent a room on the cheap for a while. If/when that special gal comes along later in my 30s or 40s, then I might look to buy a house.
When I became an adult and started considering home ownership, way back in the 80’s, the rule of thumb was you should live in the home for at least 7 years to make if worth while. Other indications are you have a steady job/career with good prospects, you are able to save for a deposit and settlement costs, you are interested in home ownership and it’s inherent responsibilities, and you can afford the mortgage payments within about 25% of your income.