Because it is an investment. If you live in one house and buy a second to rent out, the second house is clearly an investment. If you rent an apartment to liv

Because it is an investment. If you live in one house and buy a second to rent out, the second house is clearly an investment. If you rent an apartment to live in and buy a house to rent out, that house is also an investment property for all the same reasons as the second house in the first scenario. If you mortgage a house and live in it, this is actually the same as the second scenario. You just happen to be renting from yourself. I also fail to see how your first house could at all be considered covering a short. Buying a house is a bet that the value will go up. If you want to short the housing market, you rent.