A homeowner who spent $1 million on a house and renovations explains why real estate won't make you rich. Between taxes, maintenance, insurance, and a 7% realtor commission when you sell, the math doesn't work. Start a business or invest instead.
Buying a house is not the financial safe haven that we were promised as kids. In fact, it was that promise of being a safe haven that really screwed everything up for our generation. There's something very psychologically safe about owning your own home. There's absolutely benefit to that, but financially, it's not the best move. And so if your goal is to get ahead financially, buying a house should not be your first move. Starting a business and investing for the long term is probably your first move, and owning your home can be seen more as a luxury. I bought my house in 2017 for $750,000. $125,000, and I put about $250,000 into the renovations of that property. So I'm in for about $1 million. Now factor in maintenance and taxes and insurance and all the things that break along the way. And was that really a good investment? I might squeak out a tiny little profit. And if I were to sell it, I would pay 7% to a realtor and a bunch of closing costs. I'd be lucky to get out any profit at all. Makes way more sense to take that money and put it into an asset that's going to appreciate over the long term.
