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> The answer is you reduce your housing exposure by buying. My exposure to housing is certainly much higher if I buy than if I don't (and invest that money in
by kaashif 4y ago
> The answer is you reduce your housing exposure by buying.
My exposure to housing is certainly much higher if I buy than if I don't (and invest that money in e.g. stocks).
What do you mean by exposure here?
- lumost 4y agoHousing has been on a long term uptrend. In 2010 I rented in my neighborhood for 700/month. A comparable property would rent for 4K/month now. This is outside of the city center in the northeast. As I am naturally short housing, locking in a specific price point has massive benefits. If I had bought then, inflation alone would have reduced my long term monthly liability. As it stands I waited until 2018, locking in a 3k/month rate for housing. If housing corrects back to 2000 levels, I will sell my place for whatever I get - walk away from the mortgage and purchase a home in cash. The thing that makes housing a strange asset class is that individuals are naturally short. Hence you carry a variable long-term liability on housing costs from day 1. Purchasing limits that liability.