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>Aren't houses purchased for the intent of renting them out investments? Those are investment properties which is a different thing than we are talking about.

>Aren't houses purchased for the intent of renting them out investments? Those are investment properties which is a different thing than we are talking about. We are talking about a primary residence bought to live in. Yes, some investments are illiquid, I have some personally, but its stupid to have your entire portfolio in illiquid assets. >I buy plenty of VFINX that I don't intend to ever sell. I buy them for the dividends (incidentally, the same reason I would buy a house). A house doesn't provide dividends. Unless you are talking about investment properties, which, again, isn't what we are talking about here. >The carrying costs of a house are typically negative Doubtful. Very, very, few people are going to spend as much on rent as they would a house. Houses have a way of eating away at your money in a way renting does not. The carrying cost of my house is certainly not negative. Of course, "you have to live somewhere" muddles the water a little bit. But its designed to get you to think about your house as more "somewhere to live" rather than "something to build wealth." >This is true of all investments. Which is why we diversify, to minimize risk. The American mindset is "buy a house because your house will make you rich." So people overspend on houses neglecting any other investments or savings in the process. That's the real problem.

thedufer 10y ago
> A house doesn't provide dividends. Unless you are talking about investment properties, which, again, isn't what we are talking about here. A house pays you by saving you rent, which as I pointed out farther down is mathematically indistinguishable from renting it to someone else and continuing to pay rent (although this is muddied a bit by tax laws that care about whether the owner is also the tenant). > Very, very, few people are going to spend as much on rent as they would a house. This can only be true if you're not comparing similar housing - like, yeah, if I buy a house twice as big as the one I was renting I've lost money. But if you're comparing like for like, this assertion implies that investment properties are a net loss. It's a bit curious how those rental companies stay in business. I agree with most of your responses, though. But they are all arguments that your house is a _bad_ investment, which is different from it not being an investment at all.

thedufer 10y ago

> A house doesn't provide dividends. Unless you are talking about investment properties, which, again, isn't what we are talking about here. A house pays you by saving you rent, which as I pointed out farther down is mathematically indistinguishable from renting it to someone else and continuing to pay rent (although this is muddied a bit by tax laws that care about whether the owner is also the tenant). > Very, very, few people are going to spend as much on rent as they would a house. This can only be true if you're not comparing similar housing - like, yeah, if I buy a house twice as big as the one I was renting I've lost money. But if you're comparing like for like, this assertion implies that investment properties are a net loss. It's a bit curious how those rental companies stay in business. I agree with most of your responses, though. But they are all arguments that your house is a _bad_ investment, which is different from it not being an investment at all.