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Buying a house should be a great thing for you — if you do it right. Not only do you get to own your own place and customize it the way you want to, but you can also build equity in your property as you make payments to the mortgage lender. This, in turn, helps you build wealth — which partly explains why homeowners end up with about 40 times the net worth of renters.
Unfortunately, not everyone ends up happy with their home purchase. And that’s a big problem, since this is one of the biggest and most influential purchases of your life. To make sure you don’t end up wishing you’d made different choices, watch out for these key signs that you could come to regret buying your property.
1. You spend too much on it
Spending too much on your home is one of the biggest reasons you could come to regret your purchase. That’s because you’re most likely going to be stuck making a mortgage payment for the next 30 years or so after buying your property.
If you spend more than around 30% of your income (at most) on housing costs, you could find yourself “house poor.” With so much money committed to covering your home expenses, you could struggle to even buy furniture for your place — much less do important (and costly) things like saving for retirement.
To avoid ending up with this regret, figure out what your housing costs will be for any property you’re interested in. If they’re more than you’re paying now, do a “practice run” by putting the extra into savings for at least a few months. If you can comfortably live on what’s left over after covering the bigger house payment, then you can move forward. If you can’t, walk away before you end up stuck in a house that causes you decades of financial stress.
2. It’s in an inconvenient location
If your house is not convenient to work, school, family, restaurants, and leisure activities, you could find yourself really regretting buying it. One study found adding 20 minutes to your commute could make you as unhappy as a 19% pay cut, and that makes perfect sense. Having to sit in the car and waste your precious hours in traffic is just a recipe for misery.
Pay attention to both how far away the home is from the places you go and also what the drive is like, as a 15-minute drive on pleasant country roads is a lot different from spending 15 minutes sitting at traffic lights. Do a test run of your commute from the house to your job and other common destinations at a few different times of day to make sure the ride is reasonable and comfortable for you.
If you find you cannot easily get where you want to go from a house you’re considering buying, pass it up and search for a different place with a better location. Remember, you can change a lot about a house, but not where it is.
3. You don’t know what the HOA rules are
Finally, if your new home is in a neighborhood with a homeowners association, you’ll want to find out exactly what the rules are. Some HOAs are very strict in what you can do with your home, even limiting things like what color you can paint your house or what color your curtains must be.
You don’t want to move in only to find out you can’t keep your boat in the driveway or that your dreams of a natural garden in your front yard will be thwarted by rules against it. Check out all of the details before you commit.
Fortunately, now that you know about these red flags, you can make a better choice about which house you buy — and will ideally end up in the perfect place for you.
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