real estate

5 ways your house can make you go broke

Wallet buster: Your house is your primary investment
Wallet buster: Your house is your primary investment © ponsulak/Shutterstock.com

The housing meltdown called into question the long-held belief that individuals can build wealth through homeownership. Experts say you have to be savvy about the notion of a personal residence as an investment.

"A house is certainly part of your portfolio, but it should not be your primary investment," says Jerry Basford, a personal finance professor and associate vice president for business and auxiliary services at the University of Utah.

For some people, homeownership simply isn't a good idea. A young professional seeking career advancement might not want to stay put for the five to 10 years it usually takes to see a return on the investment, Basford says.

"Many people still believe purchasing a home is the ultimate way to show that you're financially stable. And today, for a lot of young people, that may not be," he says.

Real estate professionals such as Pipkin remain optimistic about property investments. Prices are improving in some areas, and mortgage rates have risen, but are still low by historical standards.

"If you're going to look at it as a long-term investment, usually things do work out," Pipkin says.

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