Barbara Corcoran: 2 Reasons Buying a Home Could Be a Bad Investment for You
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Gabrielle Olya
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Amber Barkley
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In most cases, Barbara Corcoran views buying real estate as a sound investment. However, there are certain scenarios where you might want to hold back on buying a home.
Here are two reasons why Corcoran says buying a home could be a bad investment for you.
You Plan To Sell in Less Than 2 Years
Real estate generally appreciates in value over time, but if you plan to sell within two years of buying, you likely will end up losing money.
“It always pays to buy a house if you’re going to be somewhere for more than two years. If you’re going to be in and out — you’re working at home, you’re going to take a temporary job — it never, never pays,” Corcoran said while appearing on Forbes’ “Women & Wealth” series. “It never pays, because closing costs outweigh any benefit you get from appreciation. So your rule of thumb is generally at least two years in the market before you [sell].”
You Can’t Realistically Afford the Mortgage Payment
While owning real estate is a smart investment, you should not do it if you can’t comfortably afford the monthly mortgage payment.
If you’re deciding whether or not to buy, “it all comes down to one thing — can you afford the mortgage payment,” Corcoran told Forbes. “Can you afford the monthly cost? If you can afford the payment, you’re buying the house; if you can’t afford it, you have to wait.”
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