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When you own a house, you get to decorate it the way you want, you are building equity and as a result building wealth.
But while there are these advantages of owning, there are also some disadvantages as well.
There are three things that are unavoidable about homeownership.
1. Property taxes
In many parts of the country, property taxes can be very expensive. In some places, they cost as much as the monthly mortgage payments.
Even if you can pay off my mortgage over time, you are stuck paying property taxes forever, and you can’t do anything when they go up.
Many people pay property taxes as part of their monthly mortgage payments. Lenders collect the money and keep it in an escrow account to pay the property tax bill.
You can also choose to pay these taxes directly. To minimize the pinch of such huge money at one time you can save towards property taxes each month in a high-yield savings account.
2. Ongoing maintenance costs
Maintain your property’s value, by keeping up with home maintenance. Fix minor issues immediately.
Clean out the gutters, change the HVAC filters, have the air conditioning units cleaned and serviced annually.
If you are a homeowner you are stuck with all of these expenses the whole time. Be prepared to cover these expenses so you never have to borrow money, or even tap into your emergency fund.
3. Dealing with repairs
Another big downside of homeownership is you have to manage repairs when things go wrong.
Instead of calling a landlord, you need to find a plumber or electrician, set up a time to get quotes, and cover the bills.
In spite of these downsides, homeownership can be a great way to grow your net worth.
But before you buy, be prepared to handle the responsibilities that come with homeownership.
Reference Source: The Ascent
