A house is a liability not an asset
In fact it's your biggest liability
Hey there,
So, my partner and I have been debating for a while now. Should we get a house or not?
The thing is owning a house seems like a huge undertaking. Houses are expensive and he’s pretty picky about the type of house he wants. He’s stuck on only semi-detached houses or bungalows.
No terraces, no single-storeys and only landed properties. Like that how la!
The kinds of houses he’s looking for within the city centre cost more than a million and I’m just wondering if it even is worth getting stuck with a 35-year loan for a liability.
A house is a liability
Liability??? Yep.
It is to Robert Kiyosaki so it is to me.
An asset is any tangible or intangible item that has value in an exchange.
A liability is something you owe or an expense you need to manage.
So which one does your “permanent residence” fit into?
To me, here’s why buying a house to live in is a liability and perhaps even your biggest one yet:
1. Ongoing expenses
Owning a house isn’t just about the mortgage; it’s about all the extra costs that keep coming at you. You’ve got property taxes, maintenance, insurance, utilities—it never really stops. These expenses can add up and drain your bank account.
2. Hard sell
Unlike cash or stocks, a house isn’t something you can sell quickly if you need money fast. It takes time to find a buyer, and that can be stressful if you’re in a pinch for cash.
3. The market can F you up
Sure, houses can go up in value, but they can also lose value if the market takes a downturn. Even if your home does appreciate, it might not keep up with inflation or the returns you could get from other investments, making it riskier than you might think.
4. No income generated
Unless you’re renting out part of your home, it’s not making you any money. Instead, it’s costing you, which isn’t what you usually want from something you consider an "asset."
5. Surprise expenses
Houses often come with unexpected costs—like needing a new roof or fixing the plumbing. These surprises can hit your wallet hard and make your home feel more like a financial burden.
My thoughts
So, after all this, I’m debating if I should rent or buy. But my mind is leaning towards renting because it provides more flexibility to move around in case of work or if you have terrible neighbours.
What about you? Are you team Buy or Rent?
Related
Is a house an asset or a liability - Clever Girl Finance
Is a house an asset or liability (explained) - The Better Men Project
Why homeowners are struggling to cover monthly expenses - CNBC
-Shini-