Common (And Costly) Home Buying Myths, Debunked

It wasn’t so long ago that buying a home was a sure-fire way to make a lot of money. But when the housing bubble burst and led to thousands of foreclosures all over the country, things changed dramatically, Yes, house prices are rising again in many areas overall, but the reality is that buying a home isn’t the risk-free addition to your life it might have been a decade or so ago. With this in mind, here are some home buying myths that could end up costing you money - read on to find out more.

It’s always cheaper to buy than to rent

First of all, don’t assume that by buying a house you will pay less than you do on the rental market. Specifically, this applies to hugely popular areas where the cost of renting is often dwarfed by the cost of a mortgage loan. As a rough guide, if a possible house on the market costs 15x or more than the price of renting one over an entire year, it’s cheaper to rent. A typical example is Manhattan, where renting a home is around 24x less than the cost of buying one.

It’s always a great investment

As the financial crisis of 2008 taught everyone, while buying a home is often thought of as a good investment, it can be a lot riskier than most people imagine. Don’t forget, houses lost a third of their value in that particular crisis, and there is every chance of something similar happening again. And even if your home increases in value, there are still a lot of costs to consider. Expensive roof repairs, heating replacements, possibly foundational issues - they can all cost a fortune and result in you losing money when the time comes to sell.

Realtors are unnecessary

While it’s true that you don’t need help or advice from real estate agents, if you go down this route you will miss out on a lot of experienced help when you are looking for houses for sale. Realtors understand the local markets and have inside knowledge of the best places to buy. And, while some might have picked up a bad reputation over recent years, there are still plenty of real estate agents out there who offer fantastic services and can give you a price advantage in a competitive buying environment.

Location is critical

Sure, location is important. But the reality of living in an area with high-quality schooling, excellent facilities, and low rates of crime is that you will rarely get a good deal. You are far better off talking to a realtor about an up-and-coming area to find a location that has a potential for growth. The returns you will get from looking to the future will far exceed those you get by buying in a trendy or established area.

Fixer uppers deliver profit

Finally, another dangerous myth is that if you buy the worst home in the best neighborhood, a little bit of work can help you reap huge profits. But homes in bad condition can often come with incredible problems that will end up costing you a fortune to fix. Ultimately, you could end up paying even more than you would pay for a home that is already in a great condition - in the exact same location.