- When you buy your first home, remember that it is an investment, and you should get more out of it than what you put in.
- Don’t make unnecessary or too costly of home updates to your home.
- Buying a home can be one of the smartest, financial decisions you’ll ever make.
When you’re preparing your home for a sale, the last thing you need is to hear are myths about real estate. And there are two myths that come to mind—and I’ll call them exactly what they are: lies. These lies have been circulated so much that people believe they’re the absolute truth. I’m here today to show you the one truth about buying and selling a home that will help you understand why buying a home is actually the best financial decision you’ll ever make.
Lie 1: Buying a home is going to be a waste of money and a burden of debt.
During the mid 2000s, people were buying homes they could not afford with money from banks that they could not pay back. This led to lots of families buying homes out of their price range, which, in turn, added to the housing market crash. This left people feeling afraid and hopeless in terms of debt and the value of their homes. With the fear came the belief that buying a home is problematic and leads to debt.
How to Avoid: Since the housing crash, banks have become stricter on who they will give a mortgage and how much they will allow you to borrow to buy a home. This is actually a good thing. This means you should only buy a home that you can put money down for and pay the monthly payments on time. So it’s always best that you don’t bother trying to buy that $500,000 home when you’re only making enough for one in the $300,000 price range.
Lie 2: Spending Thousands on Home Updates Adds More to Resale Value
This couldn’t be further from the truth! People spend tens of thousands of dollars on updates—like exotic pools, outdoor kitchens, or new plumbing for selling purposes. Not only is this usually a gigantic waste of money, but it tends to add only slight value to the home instead of the “major benefits on home resale value” that the plumbing company down the street attempted to sell you on.
How to Avoid: Steer clear of the over-the-top home updates and only fix and make adjustments to the home that will actually add resale value—like new carpeting, a beautiful paint job, bathroom updates, or maintaining the front yard. So just remember to only go with home improvements that actually pay off and not “improvements” that waste your time and money.
Truth: Buying a Home is the Best Possible Investment You Can Make
If you’re afraid of saving $20,000-$40,000 for a 20% down payment on a home, you’re not alone. People are afraid to save just a few hundred dollars a month for something that seems out of reach. But I’m here to tell you that saving just a few hundred dollars a month, and cutting unnecessary expenditures, can grow to be thousands of dollars saved within just a few years. And if you’re able to come up with 20% of a home’s worth for a down payment, you can likely purchase that home and get a mortgage depending on your credit history.
After living in your first home for some time, and paying your mortgage on time every month, you can plan to sell it once it’s time for you to move your family to a bigger or better home.
By selling your home at the best possible time in the market for sellers, you’re able to make the most money for your home. Hopefully you’ll make more money on the sale of your home than when you purchased it, and this is why buying a home is always the best possible investment that you can make. It allows you to put only a percentage of the cost down, make monthly payments, and you can sell your home a years later, and you’ll likely end up with more money or purchasing an even better home then you’ve ever expected for yourself with the money made from the initial sale.Two Lies and a Truth about Real Estate by HouseHunt