Is homeownership something you can handle on your own?
- Buying a home solo can be tough financially.
- Shark Tank personality Kevin O’Leary thinks people who are single should proceed with caution before purchasing a home.
- He also thinks married people should be careful, too.
Homeownership may be a big goal of yours — whether you’re married or not. But if you’re single, buying a home could be a challenge.
When you’re married, you might conceivably have two incomes that mortgage lenders can take into account when considering you for a home loan. When you’re single and only have one income, qualifying to borrow for a home can be harder.
And then of course there’s the whole having-to-pay-for-your-home deal. On one salary, your housing costs might constitute a major financial burden.
That said, even if you’re single, you may be eager to buy a home because you consider owning property a good investment (whereas when you rent, you don’t get anything for the money you’re spending other than a temporary roof over your head). But before you start house hunting, you may want to hear what Shark Tank personality Kevin O’Leary thinks about buying a home when you’re single.
You may not be ready to commit
Many financial experts agree that owning a home can help build wealth, since homes tend to gain value over time. But O’Leary wants people to remember that while that’s true, homes don’t tend to appreciate in value overnight. Rather, it can take many years for a home to gain value. And that means if you’re going to buy a home, you should really be planning to live in it for a good number of years before selling it.
As such, O’Leary cautions against buying a home when you’re single since your life might still be in flux. You could conceivably buy a home on your own in a city you love, meet someone you want to spend your life with a year later, and find out that your partner’s job has plans to relocate them across the country. Suddenly, you’re stuck in a potential bind. If you sell your home shortly after buying it, you might lose money — and that’s not what you want.
Even if your home doesn’t lose value within a few years of you buying it, remember that when you sign a mortgage, you also pay closing costs. And those fees can be expensive. Often, it takes a few years to recoup those closing costs in the form of your home gaining value. So that’s why O’Leary cautions single people about buying a home when their living situations might change.
Married couples should be careful, too
Not only does O’Leary think you should hold off on buying a home if you’re single, but he also says to keep renting if you’re married but don’t have kids. The logic is similar: Until kids come into the mix, your living situation may be more likely to change.
Now, all of this advice can be taken with a grain of salt. You may be single but firm in your plans to stay in a specific city for a decade or longer. In that case, buying a home may not be a bad idea at all if you can afford one.
But if you’re not particularly committed to where you live, then holding off on buying a home could make sense. And that holds true no matter what your relationship status looks like.