Owning a home is the American dream, but far too often people jump into home ownership simply because they believe it’s “cheaper than their rent payment”. It’s important to think past this month’s cash flow when making a decision that could provoke a financial burden. For example, once you buy a house, you are stuck there. Unless you are independently wealthy, have your house paid off and don’t need the money from renting it or selling it, you are stuck in your house until you sell it. Selling a house can be a long, stressful process, even in a booming housing market, let alone a housing slump. A tenant renting on a year lease with a 60 day notice can leave at anytime with the cost of minor breach fees. For instance, a tenant who gets that golden job opportunity that requires them to relocate. Since they are a renter, all they have to do is give notice and pack their bags. Moving out of town to pursue bigger and better opportunities is POSSIBLE if you’re renting. Owning a home traps individuals to that location.
The most painful aspect of home ownership might be that the buck stops with YOU. Whether it’s mundane repairs like replacing fixtures, fixing toilet leaks, and touch-up painting, or big ticket items like new roofs, furnaces, or siding – it all comes out of YOUR pocket. What does this cost homeowners on average? U.S. News and World Report says that homeowners spend from 1% to 4% of a homes value each year on maintenance and repair.