…it’s about getting a return of your money.
Sometimes people think that owning a house will mean that getting an increase, or return, on their money is key.
Home Gains
It’s human behavior to want things we purchase to go up in value.
That’s how the Behavioral Finance field got established; studying how we make the economic choices we make and why.
Whatever home you found yourself owning, you hopefully didn’t buy beyond what you could afford.
If you bought within your means, yet are discouraged by the initial assumptions you had regarding the home purchase, it’s just a function of resetting your expectations.
Did you buy the home to get a return on your money or as a place to live?
Or both?
I suspect most people bought their homes for both.
However they now have to adjust to a diminished hope regarding how much money they might make off their home purchase.
Additionally, they need to remember, though, and now realign to is this truth: Your house isn’t about getting a return on your money.
Return Of Your Money
It’s about getting a return of your money.
And therein lies the distinction.
If you expect to make a fabulous profit off your house whenever you sell it, I encourage you to talk to a realtor to gauge how realistic your expectation is.
However, if you expect to someday get a return of your money, you are in better shape.
Why? Because it’s not unrealistic to assume that when you will sell recovering your costs, even if just a portion of those costs.
If you bought at the peak of your market, or bought in a market with little hope for economic recovery, it may take longer.
But, if you bought a house where there is scarcity, you may do just fine, and get a return on your money.
Furthermore, if you are in a market where there is economic viability, new industry, and quality employers; even better.
Deciding when to hold onto a house and when to sell is a complex decision. It should be made dispassionately with respect to sale price and whether or not you will make a return on your money or a return of your money.
Acknowledging your expectations will keep you from making rash financial decisions. Rash financial decisions that don’t lend themselves to your financial future.
However, you may not net a return on your money. But you likely will still get a return of your money. That’s assuming you didn’t enter at the peak, and plan on keeping your house through the recovery.
Next Step
Ready to take the next step and work with a fee-only CFP? Reach out to schedule a Discovery Meeting to learn more.