Homeowners would rather have an asset than a liability. When you purchase a home in Florida, you hope to have an investment, rather than a money pit or liability. The real estate market can be difficult to navigate at times. Most focus on the needs of their families. In addition, they consider budget and affordability, rather than considering liabilities versus investments.
According to HSH, buying a home may begin as a liability. An asset is property of value that you own whereas a liability is what you owe to another party. When you buy a house, your mortgage is a liability. Liabilities are obligations to third parties. An asset, on the other hand, is a controlled resource that offers future economic benefits. In reality, your home may be both a liability and an asset.
With a new home, you owe the bank because of the mortgage, not to mention, you may owe taxes and other costs. A new home comes with maintenance costs and taxes. While these areas are clear liabilities, real estate is still an investment. Whether you plan to live in a home or sell it, most homes do increase on marketing value eventually. While you put a lot of money into a home and may begin as a liability, the goal is to create an asset out of all homes. To take advantage of an asset at home, you have to sell your home or take out a new loan.
This information is to educate homeowners on the importance of purchasing an investment rather than a housing liability. It is not legal advice.