4 Thinking Points
Before Buying a House
by Roger Sorensen
So you’ve been renting an apartment for a while and your friends
are all buying houses and settling down to nice, quiet suburban
lifestyle. Is this something you should be doing too? To put even
more pressure on you, every other evening news cast is talking about
the rapidly increasing value of houses in your area.
Before you rush out and buy the first house you can get a loan for,
perhaps it would be wise to stop and decide if buying a house is
really what you should be doing. To help you, here are four things
to think about.
1. How long will you live there?
If your job requires frequent moves, or you are pretty sure you
will not be in the same city in five years, do not buy a house.
Real estate prices do sometimes dip and if you move you may have
to sell your house at a loss.
2. Are you a Flipper?
Flipping is the art of buying a house, living in it for a time as
you fix and improve it and then selling it for a profit. You then
buy another house, live in it for a time, and sell it for a profit.
The risk here is similar to that in the previous paragraph; the
resale value of the house may go down. So if you are going to be
a flipper, be sure to buy a house you would want to live in for
the next ten years.
3. Does renting cost more than owning?
Sometimes you can find a house that is actually cheaper to own than
the place you are currently renting. If you are purchasing a house
purely for the sake of less cash outflow each month, be sure to
consider all the costs of ownership: mortgage, insurances, maintenance,
snow removal, etc. If you still find that owning is more cost effective
than renting, go for it.
4. Is it what you really, really want to do?
Occasionally owning a house is what you really want to do, even
if it doesn’t make economic sense. In that case, make sure
you do your homework, consider the three thinking points above,
and make the best choice you can. Buy the most house for the least
money in the best neighborhood.
Buying a house can be an emotionally charged time in your life.
It is also an enormous user of your resources. Take your time and
be confident that you are ready to move into another stage of your
life where you can be proud to say “This is my house.”
About the Author
Roger Sorensen is America’s Financial Guide. Learn more at
his website www.Slave2Work.com – ask and receive answers to
your personal finance questions, read his writings, or join the
newsletter Money Basics. “How-To Be Debt Free!” is now
for sale, read about it today at www.Slave2Work.com/debtfree.html.
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