Elizabeth Dodson is a tech entrepreneur with over 20 years of experience in sales, marketing & finance. She’s also the co-founder of HomeZada, a software product that helps homeowners save time and money while managing their largest asset. On...
Elizabeth Dodson is a tech entrepreneur with over 20 years of experience in sales, marketing & finance. She’s also the co-founder of HomeZada, a software product that helps homeowners save time and money while managing their largest asset. On this episode of CFO at Home, Elizabeth and Vince discuss the role of home ownership in personal wealth building, commonly overlooked expenses for new homeowners, factors to consider when deciding the size of your mortgage, and more.
- Home ownership is a long-term play in your wealth-building strategy
- For single home ownership equity can be leveraged for products like a reverse mortgage or to pay expenses such as school or healthcare later in life
- Investment Real Estate can be used to build equity, generate cash flow, or both.
- In 2019, studies showed that we spent 33% of our annual income on our homes (mortgage, taxes, insurance, maintenance expenses, home improvements, etc)
- Remote work arrangements may allow you to buy a home in a more cost-effective area of the country
- Maintenance is an often overlooked expense of home ownership
- Rule of Thumb - Set aside 1-4% of your home’s purchase price annually for maintenance costs (less for newer homes, more for older homes)
- The dollar amount of the maximum mortgage you can qualify for is an important data point to have as you search for a home, but there are other important factors to consider as well
- Do you need as much home as the mortgage will buy you?
- How does the mortgage fit into your overall plan for achieving your financial goals?
- Can you pay the mortgage monthly and still
- Manage the other costs of home ownership?
- Maintain the amount of financial “wiggle room” that you’re comfortable with?
- Unfinished home improvement projects can actually de-value your home
- Having an inventory of the contents of your home facilitates making insurance claims in case of natural disaster, burglary, fire, etc.
- People who do not maintain a home inventory see 20-40% smaller payout of their home contents because they can’t remember all that they owned.
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