Nicole Lappin

You've got property taxes, homeowners insurance, and interest on your mortgage, which is heavily front loaded.

There's also repairs, maintenance, maybe HOA fees that you never get back.

The interest on the mortgage is a piece of all of this that blows my mind the most.

If you buy a $500,000 home and you put 20% down, with the current average interest rates, you're gonna be paying over $400,000 on interest alone.

So your $500,000 house will actually cost you more like $900,000.

And like I said, interest on your mortgage is tax deductible.

And that is a beautiful, beautiful thing.

But that does not make it free money.

In fact, it's really freaking expensive.

And the interest factor will throw a wrench in your whole equity building thing because in the first year of your mortgage, the interest is front loaded.

So using the same example of the $500,000 home, after five years, you'll spend more than $133,000 in interest alone, but you'll only pay down $26,000 in principal.

So despite writing checks for five whole years, you've actually built very little equity.

So if you had a dream of this $500,000 home being something you could flip really quickly and turn a profit on in a few years, I'm so sorry, but the math there is not mathing.

But let's just say you became disenchanted with this entire thing and you decide to invest your savings instead.

If you took that 100K that you would have put toward the down payment and invested it in the market at the historical 10% annual rate of return, it could be worth $160,000 in five years.

Let's follow the money trail here even deeper because we just talked about how stocks appreciate, but real estate appreciates too.

And lately, wow, it has totally been true.

I cannot and will not deny it.

I've seen people build real wealth from their homes over the last five years.

But historically, U.S.