Is Buying A House Like The Purchase Of A Lottery Ticket?
First, when buying a home, you are likely to use a lot of money that you may not recover soon. You will do a lot of renovations which will take much of your money. You may sell the house at an appreciated value but remember it is hard to recover it all.
Secondly, putting all your money in housing investment can turn out to be risky. At no point can you claim a loss if you have sold your home.
This situation is not the issue like when you have invested in stocks or put your money to business because you will have some other gains to comfort you even in the coming years.
You can choose to invest in other assets or even in stocks because they will as well appreciate as the house will do. Even though the appreciation of homes entirely is based on the rates of inflation, this will also apply to stocks market and other assets.
Also, if you a buy a house that is subject to a mortgage, it could become a hindrance to getting another loan for things like school fees a mortgage will instead increase your credibility ratio. It could be better you rented a house and knew that paying rent is an expense as you become more flexible and decreased liquidity.
In conclusion, I am not trying to deny that house buying is not a sound investment but then it will not be the best in all scenarios. Since it comes with its good things like tax -free appreciation and tax breaks, it comes again with its costs.
Buying a house is a huge investment. You have to consult before you make that ambitious decision. Otherwise, you can rent a home, and you will still be okay.
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