Think a $400k home actually costs $400k? Learn how mortgage interest and maintenance can add up to $900k in extra costs over 30 years, and how to build equity without paying for debt.
Most people buy a home believing one thing:
“Real estate builds wealth.”
And historically, real estate has appreciated over time. But appreciation alone doesn’t tell the full story.
Very few buyers ever calculate the true cost of owning a home over 30 years, including property taxes, maintenance, insurance, and mortgage interest.
Let’s break it down using national averages.
When calculating the cost of homeownership, most people focus only on the mortgage payment. But several recurring expenses significantly impact long-term outcomes that exist behind the true costs.
National average effective rate: ~1%
Year 1 property tax:
≈ $4,000
Over 30 years (assuming moderate appreciation):
≈ $160,000–$210,000 total
While $4,000 per year may feel manageable, over three decades that recurring obligation can add up to well over $160,000 when factoring in estimated appreciation.
A common financial rule of thumb is to budget 1–2% of the home’s value annually for maintenance.
On a $400,000 home:
Over 30 years:
≈ $120,000–$240,000
And that doesn’t account for inflation in construction and labor costs.
National average:
≈ $1,500 – $2,000 per year
Over 30 years:
≈ $45,000 – $60,000
Insurance is necessary protection but it is still a recurring cost that accumulates over time.
On a $320,000 loan at 6.5–7%:
Total interest paid over 30 years can exceed:
≈ $400,000
What shocks most people is this:
On a thirty-year $320,000 loan, you can easily end up paying more in interest than the original loan amount.
That’s the cost of amortized long-term debt.
At 6.5% — You pay about $88,000 more in interest than the original loan amount.
At 7% — You pay about $126,000 more in interest than the original loan amount.
Over 30 years, a $400,000 home could involve:
That’s approximately:
This estimate represents the ongoing cost of owning a home beyond simply paying the principal, in this scenario.
If the home appreciates at 3–4% annually, it could be worth roughly:
$1.1M–$1.3M after 30 years.
In this example, the home’s 30-year appreciation is approximately the same amount the homeowner already paid in interest to the bank.
It is important to remember that owning the roof over your head is more than just a line item on a spreadsheet. Homeownership provides a lifestyle utility and a standard of living that an investment portfolio cannot. For many, the stability of a primary residence is worth the cost.
However, when you move past lifestyle and look strictly at real estate as an investment, the math of traditional ownership on a $400,000 home with a $320,000 mortgage becomes much harder to justify. If your goal is to grow wealth without the potential "hidden" price tag of $725,000 to $900,000+ in non-principal costs, there is a more efficient path.
Realbricks redefines real estate investing by removing the friction and financial "leakage" described above. While traditional buyers are often bogged down by 30-year debt and recurring fees, Realbricks users benefit from a debt-free model.
If you need a place to live, buying a home serves a practical purpose. But if your goal is to build long-term financial exposure to real estate investment, the Realbricks model offers a more efficient alternative. Realbricks provides access to debt-free assets, without the added financial costs that can quietly erode returns over a 30-year mortgage, and without the responsibility or stress of property management.
Take a few minutes to explore the Realbricks marketplace and see how buying shares of single-family rental homes allows you to participate in real estate investment in a more flexible and streamlined way.
Disclaimer: Investing in real estate involves risks, including the potential loss of capital. This content is for informational purposes only and is not intended as investment advice. Investors should perform their own research and consult with financial professionals before making investment decisions.
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