Clark Howard: This is the only reason to buy a house

If you're thinking about buying a house with visions of exponentially growing your net worth and setting yourself up for a breezy, carefree retirement, money expert Clark Howard wants you to think again.

That’s because Clark never wants you to think about the home you’re going to live in as a financial investment.

Clark: ‘A home is a place to live’

“So many people believe that buying their own home is an investment, that it’s going to create wealth over time,” Clark says. “That’s not necessarily true — at least not in dollars and cents.”

That’s because the money you spend to buy a home is just the beginning.

“Things break and need to be repaired. There’s all kinds of maintenance you have to do,” he says.

"A home is a place to live. The real investment you're making is in yourself and in your family. You're creating a sense of permanence, especially if you have kids. Instead of moving from place to place, your kids have stability."

If you don't believe Clark, consider this: A recent analysis by home-listing site Zillow and review site Thumbtack shows that there are several additional expenses that can catch home buyers unaware.

These include:

• Property taxes
• Utilities
• Homeowners insurance
• Maintenance expenses

Because of these extra expenses, homeowners are paying on average about $9,400 a year in addition to their monthly mortgage, according to the study.

Consider this, too: While you may have heard that real estate “always increases in value,” this is not the case.

The median price of existing homes sold as of May of last year, when adjusted for inflation, was still well below what it was during the peak of the housing bubble.

That means a lot of people who bought houses in the early part of the century are underwater in their homes — they owe more than their houses are worth.

In fact, as of May of this year, more than 5.2 million U.S. properties were what's considered "seriously underwater."

Final thought

There are any number of reasons why owning a home is great.

You’re investing in a community, you get to know your neighbors and you build a support system. But never kid yourself that owning a home is guaranteed to steadily fatten your wallet.

On the other hand, Clark says, “owning investment real estate where you’re the landlord renting out a home to people, that’s a way you can make money over time. Not all at once, but you can get rich slowly.”

More stories you might enjoy from Clark.com:

• How to buy a house in 9 steps
• Want to buy a rental property? Read this first
• How to shop for a mortgage

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