You might be wondering why I took a video in the dark? I made a mistake and I learnt it too late. I think many homeowners may also have made the same mistake that I did.
I’m going to share with you the 3 lessons homeowners learn too late about their property.
The first lesson is that owning a home is more than just the mortgage.
It does not mean that can afford the monthly repayment doesn’t mean you can afford the house. You have to consider there are property taxes, maintenance fee, town council fees or even management fees for private homeowners.
The general rule of thumb is the bigger the house, the more the taxes will be.
What I would recommend is to ask the current seller or the current owner what are the monthly fees they incurred at this current moment. For example, the maintenance fees, or the sinking funds, ask them how much does it cost to maintain the property.
The second thing would be to have extra cash or have at least 6 months of your pay as an emergency fund.
Why have this extra cash?
This is mainly for repair costs. Not those minor repair cost but the major ones that can cause major inconvenience to your life. For example, the water pipe burst or electrical blackout where it requires professionals to help you to fix the problem.
I personally have lived in a prolonged period of time without electricity and I don’t want anyone to experience that as well.
Last, but not least, understand that having a home is not an asset.
It is actually a liability because you keep on paying the mortgage and there are expenses that you need to pay which I have mentioned at the first point. And also the accrued interest that will eat up your cash proceeds. As long as it is not generating income for you, matter a fact, anything that does not generate income for you is not an asset.
For your property to be an asset, you have to rent it out to tenants who would pay rental monies. That is what you call an asset.
At this moment, if your home is not generating any income, this is known as a liability.
So if you have guessed it, I turned off my lights to save on electricity bills.