Mika
VIP Contributor
A popular belief is your house is your asset. When you live in your own house, you don’t have to pay rent, when you sell your house, you make money. This is the reason why a lot of people’s number one financial decision is to buy a house. However, most people cannot afford to pay the full amount; therefore, they get a loan to buy a house and pay a percentage of the principal amount along with interest on the loan regularly for 15-20 years.
When you buy a house on loan, you will be paying interest on your loan, you will also be paying taxes, and insurance fees, and spending money on house maintenance. Therefore, having a house will make you spend money. When you have to spend money, it is not an asset but a liability.
Interestingly, your house can also be your assets provided you rent out your house, and collect rental income. When you collect rental income, you can not only pay for the house-related expenses but also make profits.
When you buy a house on loan, you will be paying interest on your loan, you will also be paying taxes, and insurance fees, and spending money on house maintenance. Therefore, having a house will make you spend money. When you have to spend money, it is not an asset but a liability.
Interestingly, your house can also be your assets provided you rent out your house, and collect rental income. When you collect rental income, you can not only pay for the house-related expenses but also make profits.
