It’s been five years since the housing bubble burst, and while things still aren’t back to where they once were, they’re certainly on the mend. Despite all the bad news in the real estate market at the time, there’s been a lot of good lessons learned that have since helped a lot of people. So what exactly have we learned since the housing bubble burst?
Don’t buy what you can’t afford
One of the biggest issues that we have learned is that many bought homes they couldn’t really afford. They figured they would just deal in the meantime and sell for a huge profit in the future. If there’s any lessons to take away, it’s that if you can’t afford something – especially a huge investment like a house – then you’re better off buying something more practical or just forgoing the idea all together.
Research, then research some more
There were many who heard good things from family / friends or in the media, and rather do their own research, jumped right in and made a move of their own. Unfortunately, many took a tumble all together. This is an excellent lesson that while it’s great to have extra advice from a few individuals, it’s more important that you do your own research and come to your own conclusions. After all, you’re the one who is going to have to deal with the consequences, not anyone else.
Read all the fine print
Another lesson to learn from the housing bubble bursting is to read all the fine print on everything. There were many who said that they didn’t know what they were getting themselves into, that they were misled and/or didn’t see certain pieces of information in their paperwork. Regardless of what you’re reading, always make sure to check out every single square inch of the paperwork before you sign your name to it.
Treat your house like a house
Your house isn’t like your checking or savings account or your Aunt Marie, you can’t just borrow, borrow, borrow and expect there not to be consequences. When you keep taking money you can’t afford to and racking up debt, it’s only going to come back to bite you. Treat your house like exactly what it is – an investment not to touch that also puts a very-necessary roof over your head.
There are no guarantees
When it comes to life – and especially real estate – there are absolutely no guarantees. You can’t expect to buy a home, live in it for awhile, then absolutely know you’re going to flip it for a tidy little profit. That may not necessarily happen. Sure, you could make some money off your house, especially if you make some improvements to it, and of course you want to actually make money off it, but there should be no expectations on your part that it’s definitely going to happen.
There are many more lessons to learn from the housing bubble bursting, but the aforementioned are just some of the most important ones to keep in mind. While it was unfortunate that everything had to happen, it’s been a valuable lesson in how to prevent similar problems from happening again in the future.