Dave Ramsey Says These Are the 3 Biggest Downsides of Owning Your Own Home
- Buying a home can be a great thing for your life and your finances.
- There are some drawbacks to homeownership, though.
- You'll lose the flexibility of renting, your costs will be higher, and all the responsibilities of ownership will be yours.
Thinking about buying a home? Be sure you're aware of these disadvantages.
If you're excited about buying a home, you're probably thinking about all of the advantages of ownership. And there are plenty. You can personalize your space, of course. And your mortgage payments will help you build equity and acquire ownership in an asset that will hopefully turn out to be very valuable.
But while there are undeniably benefits to ownership, there are also drawbacks as well -- and you should be aware of these too. In fact, finance expert Dave Ramsey has outlined three big downsides of owning your own place that you should consider before you make an offer.
1. You're stuck with less flexibility
The first big con of homeownership that Ramsey points out is that you're making a much bigger commitment when you buy rather than when you rent. And the responsibility you are taking on can result in it being more difficult to move permanently or to travel temporarily for long periods.
"Want to go to Southeast Asia for six months on a whim? Leaving your house isn't as easy as getting out of a lease, packing your backpack, and getting a one-way ticket to who-knows-where," Ramsey warned. "Same goes for work-related relocations. You'll have to rent out or sell your house -- or else prep it to stay vacant for a long time."
Ramsey is right that this decreased flexibility is a big downside of homeownership. Selling a home takes time and costs money, and you can't predict exactly when you'll find a buyer. So, unless you are committed to staying in your property for several years, you absolutely should stick with renting.
2. Your expenses will be higher
As a homeowner, you have many costs that renters don't. And some of the bills you'll have to pay will be much higher than what you were used to.
"Remember how little renters insurance cost you? We hate to break it to you, but homeowners insurance will be a lot more," the Ramsey Solutions blog reads. "Combine that with a possible flood policy, homeowners association (HOA) fees, property taxes and higher utility bills, and you're looking at more monthly expenses."
Again, Ramsey is spot on. However, the key thing to remember here is that part of your monthly payments go toward acquiring ownership of your home. So while you have to pay more, you'll end up with something to show for it in the end -- which isn't the case with renting.
3. All of the responsibilities of ownership fall on you
Finally, the third big con that Ramsey points out is that you'll have to be your "own landlord," and there's no one else you can turn to in order to solve problems that arise in your home. It will be on you to arrange and pay for repairs.
"When your roof leaks, it could be a full-on crisis that'll force you to drain your savings to pay for a new roof. If you're renting, a leaky roof is simply an inconvenience solved by putting a bucket under the leak until your landlord fixes it," Ramsey said.
You'll need to plan for this by saving up a home repair budget so you don't end up in debt or facing financial disaster when things go wrong.
You should be sure to consider these big cons, because if you aren't ready for higher expenses, more responsibility, and a commitment to stay in one place, then purchasing a home is definitely not the right choice for you.
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