Is Your Home An Asset Or A Liability?

Is Your Home An Asset Or A Liability?

Most Australians go through life thinking that their home is an asset. But this is a big mistake!

A real asset is something that is worth something and also generating you an income. Some examples of real assets are share portfolios that pay dividends and investment properties that have surplus rental income, and perhaps even YOU if you generate an income by working. But does your family home generate an income? No.

In fact, your home is a liability, not an asset. Even once it has been completely paid off, you will still need to pay rates each year (that’s $2,000 on average), insurance (probably totalling $1,000), maintenance, and more. The older a property is, the greater your yearly maintenance costs, as carpets, curtains, and air conditioners need fixing or replacing… the gardens need maintaining, and paint needs a refresh.

If you are pumping all of your earnings into paying off your house (plus all the expenses it generates), instead of acquiring real assets that will produce an income, you’ll end up owning your home but you’ll be stuck working indefinitely to pay for it.

What’s the alternative? Acquire real assets! Instead of focusing on your own home, look at other options like renting the home you live in, and buying an investment property (often this makes more sense financially).

Stop looking at your home as an asset, because this mindset isn’t going to serve you long-term.

If you want to be financially free, you will need to generate a passive income so that you don’t have to keep working. The only way you can do that is with real assets.

Want to learn more about how property investing can secure your financial future?

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Daimien Patterson is the CEO of Integrity Property Investment, a property investment company based in Australia. He regularly produces books, blogs and videos on the topic of property investing, helping thousands of people create financial security and freedom through education and property investment. Get started today.  

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Legal Disclaimer: This information ('the information') is presented for illustrative and educational purposes only. It is not presented nor should it be treated as real estate advice, legal advice, investment advice, or tax advice. All investments involve risk and potential loss of money. If you require advice in any of these fields you should contact a suitably qualified professional to assist and advise you. Your personal individual financial circumstances must be taken into account before you make any investment decision. We urge you to do this in conjunction with a suitably qualified professional. Daimien Patterson, IntegrityX Enterprises Pty Ltd, and their associated trading names, companies, researchers, authorised distributors and licensees, employees and speakers do not guarantee your past, present or future investment results whether based on this information or otherwise. Daimien Patterson, IntegrityX Enterprises Pty Ltd and their associated trading names, companies, researchers, authorised distributors and licensees, employees and speakers disclaim all liability for your purchase decisions. You should do your own independent due diligence and seek the advice of qualified advisors before making any investment decision.