Here we are in a NEW decade!! It may be 2020 but the myths versus the reality of placing money into real estate ~ particularly when it comes to where YOU live ~ have not changed. If we are using the metaphor of stormy waters…this one is a mixed bag of smooth sailing along with squalls hiding around corners. Where you drop anchor, permanently or otherwise, is one of the biggest decisions you can make with your hard earned treasure. The “investment” is personal, emotional, and takes a tremendous amount of thoughtful research to make it work for you!! Our indefatigable lighthouse keeper, Ms. Katherine Vessnes, is here to shine the light to help guide our travels. Have a listen…

About Ms. Vessenes:

Ms. Vessenes works with over 300 physicians and dentists from Hawaii to Cape Cod. Her firm uses a team of experts to provide comprehensive financial planning to help doctors build their wealth and protect their wealth while reducing taxes now and in the future. Katherine is a longtime advocate for ethics in the financial services industry; and has written three books on the subject of investment strategies. She has received many honors and awards including: numerous tributes from Medical Economics as a top advisor for doctors, multiple 5-Star Advisor Awards, honored as a Top Woman in Finance, in addition to being selected to be on the CFP® Board of Ethics. Katherine can be reached at: Katherine@mdfinancialadvisors.com or 952-388-6317. Her website: www.mdfinancialadvisors.com.

Quick Summary:

Home Ownership Myths

• Renting is throwing your money away

• If your mortgage payment is the same as your rental payment, then you are ahead to purchase.

• When buying you should put down at least 20%.

Data on WHY These are Myths

• Study of 600 millionaires found most had never purchased a home that cost more than triple the amount of their annual income!

Home Ownership as an Investment

• Owning your own home is NOT an “investment ”.

Home Purchase

• Takeaways :

  • Don’t be “home poor”

  • Do a realistic budget first to see what you can afford without sabotaging your savings plan

  • Budget for repairs (maintenance is 1.2 % value of home)

  • Sobering reality: Even if your mortgage payment equals your rental payment, owning a house is much more expensive than renting.

Renting

• Rent when you:

  • Are in town for a few years

  • Have moved to a new area/new job and are not familiar with the town, schools, etc.

  • Are just starting your career

  • Have a lot of debt you are paying down

Buying

• Buy when you:

  • Are an attending physician with a steady income

  • Have found your “forever home” in your “forever town”

  • Have carefully looked at the real costs

  • Can pay for a house and you can save, invest, cover emergencies, have fun, and travel

  • Find a house in a good school district, so you don’t have to pay for private schooling