Provided by: Douglas Boneparse
When buying a home, think of it as a place to live, not as an investment.
In an interview with CNBC’s Frank Holland on CNBC Make It, Douglas Bonepers, certified financial planner and co-author of The Millennial Money Fix, said that a home is simply a “roof over your head.” , said it is a place to make memories. Your Money virtual event on October 17th.
Homes typically sell for hundreds of thousands of dollars, but Bonepers advises buyers not to think of them in the same way as a 401(k) or stock index fund.
Rather, it is a “home base” that provides stability, especially for young families. Homes also have sentimental value, he says, but otherwise “it’s very difficult to calculate the return on investment.”
“If you can sell your house and make money years from now, that’s great,” Vonepers said. But it’s very difficult to track “every little repair or addition you’ve made to the house” over a “20 or even 30 year” ownership period.
Bone Perth makes an exception for rental properties because they can generate income for the owners.
It’s also worth noting that owning a home has become prohibitively expensive for many people.
“For the average American, buying a home has never been this difficult,” Vonepers said. “And I don’t see that changing anytime soon.”
Currently, homes are selling for a median price of $416,100. According to the latest U.S. Census Bureau data.. And considering that, Median home down payment in the US is over $25,000the initial costs of homeownership are too high for many buyers.
In addition to the down payment, there are also many ongoing costs unique to homeownership, such as mortgage payments and interest, property taxes, utilities, homeowner association fees, and ongoing repairs.
All these expenses can make homeownership impossible. “You have to save really hard to make that down payment and be able to comfortably live in that home every month,” Vonepers said.
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