It’s a decision you might regret.

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Key points

• You will often hear that owning a home is a great investment.
• One expert thinks otherwise, and for good reason.
• Home ownership is expensive, with no guarantee of return on investment.

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Real estate mogul Grant Cardone knows a thing or two about buying homes and building wealth. In fact, he considers real estate investing to pave the way to becoming a self-made millionaire.

But despite its success, Cardone is not sold to the property. In fact, he believes that for many people buying a home is not a wise investment, especially in today’s market. Here’s why.

1. There are too many costs involved

When you buy a house, you don’t just pay a down payment on a mortgage, pay your loan every month, and quit smoking. There are other expenses you will incur when you own. These include:

Also, remember that it costs money to set up a home loan. Mortgage closing costs are typically 2-5% of the amount you borrow. Take out a $400,000 mortgage and you could be looking at up to $20,000 in closing costs. All of these expenses could eat away at your profits, making home ownership a bad choice.

Say you buy a house for $500,000 and sell it for $700,000 in 10 years. At first glance, it looks like you just made a profit of $200,000.

But not so fast. What if you also spent $24,000 a year on taxes, insurance, maintenance and repairs? Suddenly you’re not up $200,000 – you’re down $40,000 if you look at it from a pure investment perspective.

2. You’re not getting regular cash flow from your home

When you invest in assets like dividend stocks, you can get paid regularly, increasing your cash flow. A house won’t do that. Of course, you can borrow against the equity that you have at home in case you need money. But it is money that you will have to pay back.

3. Tax benefits are limited

When you own a home, you get certain tax breaks. But Cardone says they’re not compelling enough to make home ownership worthwhile.

Of course, you can deduct your mortgage interest, as well as up to $10,000 in property taxes. But remember, these days the state and local tax deduction is capped at $10,000, and that includes property taxes and state income taxes. So if your income tax bill is $9,000, that will eat up most of your deduction. And with the standard deduction being higher these days, you might not get as many tax benefits as a landlord.

Is home ownership a waste of money?

Cardone says bluntly, “Don’t buy a house unless you can afford to waste the money.” But to be fair, you’re not necessarily wasting money to put a roof over your head. On the contrary, you are covering an essential expense.

That said, if you’re considering buying a home, it’s probably best to think of it as an expense, not an investment. If your goal is to make money, there are probably better and easier ways to do that than buying a house and reselling it for a profit. But if you need a place to live and want the stability of not having to worry about having to move, then a house may end up being a good choice – even if Cardone thinks otherwise.