4 ms·

A house is only an investment if you can sell it and still have somewhere to live. For most people this is not the case. You know who it is the case for? Landlo

A house is only an investment if you can sell it and still have somewhere to live. For most people this is not the case. You know who it is the case for? Landlords who rent out housing. If most people rent, then most housing is now investment - just not for the people living in it. If the goal is for housing to be treated as something other than investment, making more people rent instead of buy achieves the exact opposite.

droopyEyelids 4y ago
Reverse mortgages are common. Thats selling the house and continuing to live in it
- foogazi 4y ago
  Yes, selling / inheritance are bot the only options You can get LOC, rent out rooms, build an ADU, split the house, etc A lot of options available for property owners
ElevenLathe 4y ago
This is a good point but leaves HELOCs out of the equation, and also the possibility of downshifting to a cheaper home. Ordinary, one-home-only people treat their home as an investment because they really can use it that way, though not as easily as a landlord. For one, they can always sell the house and move to a cheaper one -- or the might be able to if their local housing market hasn't been inflating past their means since they bought their house. More directly though, if they have any equity in their house, they can walk into a bank and walk out with a HELOC and they don't have to move anywhere. My house appreciating 100k this year means, potentially, that I get to spend 100k this year.
- MontyCarloHall 4y ago
  >they can walk into a ba[n]k and walk out with a HELOC. My house appreciating 100k this year means, potentially, that I get to spend 100k this year. No it doesn’t. It means you can take on an additional $100k of debt this year. HELOCs are not free money, no matter how much the banks want to convince you this is the case.
  - ElevenLathe 4y ago
    Yes, debt is money I get to spend now. That's why I borrowed it. If I didn't have anything to spend it on, I wouldn't borrow.
    - MontyCarloHall 4y ago
      No, debt is money you get to spend now and pay back later. You haven’t actually net gained any money by taking out that HELOC, unless you manage to wisely invest it with an ROI higher than your interest rate.
      - ElevenLathe 4y ago
        That's the point: I wouldn't gain any money by not taking the loan either. I gained the "money" (wealth, really) by my house appreciating in value. Anyway I'm not advocating that everybody borrow against every shred of equity in their house, just noting that this temptation exists. If my house is worth more suddenly, my spending can increase suddenly, without my even having to move. Whether or not this is wise is a separate discussion.
ilyt 4y ago
That's kinda the problem, how to incentivise making housing but dis-incentivise just buying them as an investment. Taxing it just makes renting more expensive, high interest rates makes even less people be able to afford one in the first place, and you still need some rental properties as many people don't want to immediately get the forever home. Regulating renting would make many people bitch and whine about their freedoms to do what they want with thing they own (and, well, rightly so) so there is not that much options left. Cities could build then rent housing (with maybe option to buy out at discount if you lived there for few years) but good luck trying to beat private investors without some heavy legislation on it.
thesuitonym 4y ago
A house is a great investment if you want to give your investments to your family when you die.
robocat 4y ago
> A house is only an investment if you can sell it and still have somewhere to live. Only assuming they can’t downsize or move. I know plenty of people that bought in a flash suburb, or a family sized home then kids have left home, so they sell up and go cheaper while retaining a lot of equity from the property valuation growth. Also when people don’t need to work (usually retirement), it is very common for people to leave expensive urban areas and move to cheaper and nicer digs in semi-rural areas. This works especially well if you move countries or return to your birth country. You are also ignoring the worse situation where a married couple divorce and now need two homes: halving total equity is financially difficult for most people (especially in later decades which leaves little time to catch up again).

droopyEyelids 4y ago

Reverse mortgages are common. Thats selling the house and continuing to live in it

foogazi 4y ago
Yes, selling / inheritance are bot the only options You can get LOC, rent out rooms, build an ADU, split the house, etc A lot of options available for property owners

ElevenLathe 4y ago

This is a good point but leaves HELOCs out of the equation, and also the possibility of downshifting to a cheaper home. Ordinary, one-home-only people treat their home as an investment because they really can use it that way, though not as easily as a landlord. For one, they can always sell the house and move to a cheaper one -- or the might be able to if their local housing market hasn't been inflating past their means since they bought their house. More directly though, if they have any equity in their house, they can walk into a bank and walk out with a HELOC and they don't have to move anywhere. My house appreciating 100k this year means, potentially, that I get to spend 100k this year.

MontyCarloHall 4y ago
>they can walk into a ba[n]k and walk out with a HELOC. My house appreciating 100k this year means, potentially, that I get to spend 100k this year. No it doesn’t. It means you can take on an additional $100k of debt this year. HELOCs are not free money, no matter how much the banks want to convince you this is the case.
- ElevenLathe 4y ago
  Yes, debt is money I get to spend now. That's why I borrowed it. If I didn't have anything to spend it on, I wouldn't borrow.
  - MontyCarloHall 4y ago
    No, debt is money you get to spend now and pay back later. You haven’t actually net gained any money by taking out that HELOC, unless you manage to wisely invest it with an ROI higher than your interest rate.
    - ElevenLathe 4y ago
      That's the point: I wouldn't gain any money by not taking the loan either. I gained the "money" (wealth, really) by my house appreciating in value. Anyway I'm not advocating that everybody borrow against every shred of equity in their house, just noting that this temptation exists. If my house is worth more suddenly, my spending can increase suddenly, without my even having to move. Whether or not this is wise is a separate discussion.

ilyt 4y ago

That's kinda the problem, how to incentivise making housing but dis-incentivise just buying them as an investment. Taxing it just makes renting more expensive, high interest rates makes even less people be able to afford one in the first place, and you still need some rental properties as many people don't want to immediately get the forever home. Regulating renting would make many people bitch and whine about their freedoms to do what they want with thing they own (and, well, rightly so) so there is not that much options left. Cities could build then rent housing (with maybe option to buy out at discount if you lived there for few years) but good luck trying to beat private investors without some heavy legislation on it.

thesuitonym 4y ago

A house is a great investment if you want to give your investments to your family when you die.

robocat 4y ago

> A house is only an investment if you can sell it and still have somewhere to live. Only assuming they can’t downsize or move. I know plenty of people that bought in a flash suburb, or a family sized home then kids have left home, so they sell up and go cheaper while retaining a lot of equity from the property valuation growth. Also when people don’t need to work (usually retirement), it is very common for people to leave expensive urban areas and move to cheaper and nicer digs in semi-rural areas. This works especially well if you move countries or return to your birth country. You are also ignoring the worse situation where a married couple divorce and now need two homes: halving total equity is financially difficult for most people (especially in later decades which leaves little time to catch up again).