9. Home Ownership - Benefits and Costs

Buying a house is part of the American Dream. Owning a home can offer a sense of pride and accomplishment, as it is often seen as a major life milestone. Tangible benefits are:

1.      A place that you can call your own (no need to move due to whims of a landlord OR increased rents etc.)
2.      No hikes in (rental) costs. Mortgage payments stay same through the course of the term (if you got the house when rates were higher, then refinancing will bring them down further)
3.      An asset that appreciates in value and help you build wealth in the long term
4.      No restrictions on interior redesign (paint, picture nails, floating shelves, …). You can customize to your heart’s content and as per as your needs
5.      Covered garage space(s) which is beneficial whether it is rain or shine.
6.      You can grow your own garden

 

That said, there are a number of costs involved in getting the above said benefits. They are:

1.      Downpayment (typically 20% of the house price)
2.      Closing Costs (documentation fee, appraisal fee, title fee, …)
3.      House set up costs (new Fridge, TV, game / media room, epoxy, security system, …)
4.      Mortgage & Interest payments / commitment for 30 years (potentially PMI in case of down payment < 20%)
5.      Escrow (Property Taxes, Homeowners Insurance)
6.      HoA Fees (Home Owners Association)
7.      Lawn Mowing, Pest Control, Filters replacement, …
8.      House Upgrades (bathroom / kitchen re-model, …)
9.      Repairs (appliance breakdown / replacement, …)
10. Higher utility bills (larger space è heating / cooling)
11. Refinance Costs (once interest rates go down) which could be one or multiple times

 

My comprehensive LEADERS (Living Expenses, Emergency Funds, Accidental Death, Effective Retirement, Sunset) framework helps you move from a reactive è planned è proactive / predictive model in ensuring that you can enjoy your home without worrying about breaking the bank.

Don’t forget, for the first 10 customers, I will help you ensure this is a cost neutral proposition (minimum of 1X savings in year one) through comprehensive portfolio review.

What other benefits do you see in owning a house? What additional costs do you foresee / anticipate? Share your thoughts and comments.