Your Home is NOT an Investment

By
Real Estate Broker with Long & Foster REALTORS®, Gainesville, VA VA License # 0225089470

Your Home is NOT an Investment

Somehow, during the real estate boom, the prevailing thought in society became that your home was an investment.  It kept appreciating and you could draw equity from it for other things.  Or, you could flip it in two years and go by an even higher priced home with the money you made off of the sale of the former.

Here's a news flash.  Your home is NOT an investment.  Here's why:

Your home is not easily liquid, as investments should be.  When you need to cash it out, you need to find a buyer for it and also need to find another place to live, which can be costly.  When you sell stock, you just sell it and get the money.  No moving necessary.

Your home is serving a purpose.  The reason you bought it is to have a roof over your head.  Yeah, in the long run, you will build equity in it, but again, it's meeting a primary need, SHELTER.  Even if you live in the home for thirty years, by the time you sell it, you will need to find another place in which to live, which will likely eat up that equity. 

Buying a home is still a sound financial and life decision.  You lock in your housing payment and the place you will call home.  You get a mortgage interest deduction on your taxes.  Rent can't do that.   And you know rental rates only increase over time.

It's a nice benefit to build equity over the years in a home, but let's not lose sight of what you are buying when you buy property.  You are buying a place to live.  Yeah, it's the largest purchase you will ever make.  But if you have ever leased a home, and seen the annual total on your rent, you know that no matter where you live, housing will always be your largest expense.  Might as well lock in the payment and have a place to call your own.  Just remember, it's not a blue chip stock that is going to wildly appreciate and put you on easy street.

Posted by

Chris Ann Cleland, Associate Broker- Licensed in Virginia, GRI, SFR, Northern Virginia Short Sale Specialist. Affiliated with Long & Foster, 7526 Limestone Drive, Gainesville, VA 20155.  To contact Chris Ann, call 703-402-0037 or email chrisann@LNF.com.  Or you can visit her website:  www.nvarealestate.net.

Header photos taken by Chris Ann Cleland.

The opinions expressed in this post are those of Chris Ann Cleland, not those of Long & Foster REALTORS®.

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Topic:
Home Buying
Location:
Virginia Prince William County
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Realtors®
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Tags:
buying a home as an investment
buying real estate
buying a home in northern virginia

Comments 14 New Comment

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Ambassador
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Chris Ann Cleland
Associate Broker, Northern VA
Long & Foster REALTORS®, Gainesville, VA

Scott:  I think the ATM logic goes hand in hand with those thinking their homes are there to make them piles of cash.

Alan:  Reasonable appreciation will definitely return.  I just don't think many people give thought to the fact that while their asset is appreciating, so are the assets they will want to purchase in it's place when they sell.

February 06, 2012 10:27 AM
Rainmaker
256,173
Coral Gundlach
Century 21 Redwood Realty, Arlington Virginia

Chris Ann 2nd your point in #10 is so spot on...and it's exaclty why we all should buy our retirement home now!  

February 06, 2012 07:55 PM
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Chris Ann Cleland
Associate Broker, Northern VA
Long & Foster REALTORS®, Gainesville, VA

Coral:  I'm not able to look that foar ahead.  No clue where I want to retire. 

February 07, 2012 01:43 PM
Rainmaker
483,372
Curtis Van Carter
Napa Valley's Broker Extraordinaire in Yountville
Coldwell Banker Brokers ofthe Valley, Yountville Napa Valley

Chris Ann

Too many of homeowners forget why they bought. The pleasure of being able to do what you what, fell the pride of owning and as you so aptly pointed out not worrying about next's month rent amount.

Good post, cheers cvc

February 07, 2012 02:01 PM
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Chris Ann Cleland
Associate Broker, Northern VA
Long & Foster REALTORS®, Gainesville, VA

Curtis:  I hate the words, "The largest investment you'll ever make."  It really should be, "The most amount of money you will ever spend in your lifetime will be housing.  You might as well own it."

February 07, 2012 02:10 PM
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Chris Ann Cleland

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