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The best investments are those that are used to produce income. Passively investing in real estate means buying an asset that produces no income, costs taxes/ma
by skookumchuck 8y ago
The best investments are those that are used to produce income. Passively investing in real estate means buying an asset that produces no income, costs taxes/maintenance/insurance, and the structure declines in value due to people wanting new things, not old things.
The net result is you're relying on increasing demand to make money, which only works for location, location, location.
- sokoloff 8y agoFor owner occupied real estate (read: your house), the asset produces [tax-free] income in the form of rent avoided.
- skookumchuck 8y agoThat's right. But using a house, like driving a car, pushes its value down. Wear and tear. I own my home because I like owning it and being able to use it the way I want to rather than asking permission from the owner. But I don't think I have illusions about it being an investment. It kinda sucks as an investment.
- sokoloff 8y agoI suspect we see things fairly similarly. I bought our house because it was a great location, (potentially) lovely old house, with a yard and parking, and sized/designed that we might be able to live there 30+ years. I bought it considering the ownership to be primarily an act of consumption; it's just happened to turn out to be a greater windfall than my actual/intentional investments. I accounted for it like consumption, but had pretty strong suspicions that it would have a strongly positive financial return. (Nice large, already old, single-family with a yard in Cambridge, MA.)