uying a house is an investment, and for many people it is a good one. But, is it a good investment for you?
You should consider these factors:
Time in home
If you own a house for only a short period of time, you probably won't recoup the high costs of buying and selling it.
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The effect on your cash flow
You will need to have enough cash for both a down payment and your monthly housing expenses.
The down payment
Most people don't have enough money saved to make the 20 percent down payment that lenders ideally want. But even 5% of a $200,000 house is $10,000. Can you afford that?
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Monthly cash flow
You can expect that your initial mortgage payments will be higher than your current rental costs.
There are reasons why this isn't such a dreadful thing. There are usually tax savings, and other factors, which may make it cheaper each month to buy than rent.
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The investment opportunity
How would investing in a house compare to other investment opportunities?
A home as an investment
Buying a home is a relatively stable, long-term investment that has the added bonus of allowing you to have pets (How many mutual funds can claim that?).
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The opportunity cost
Investing in property, however, ties up a lot of your capital in one place. This money could be spent on other, and potentially better, investments.
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