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The fact that most people can only get exposure to the housing market by taking a massive loan to perform a leveraged buy-in, at which point a single asset form

The fact that most people can only get exposure to the housing market by taking a massive loan to perform a leveraged buy-in, at which point a single asset forms the bulk of their capital portfolio, is not a good way to build generational wealth, and it certainly shouldn’t be the only way to a middle class life. It’s honestly possible that people would be better off putting their money into a diversified investment fund that includes a spread portfolio of housing among other assets, so they can benefit from that growth. If your 401K includes Blackrock assets, you’re still benefitting from overall housing market growth, without that being tied up in also being the building you live in. The big win buying a house historically represents – for those for whom it works out – is of course that you can buy a house with borrowed money on a fixed rate, pay off the loan over 30 years, and pocket the appreciation in the asset over the loan value. That’s an amazing deal if you’re lucky enough to buy and sell the right house at the right time and get your loan at the right interest rate. But it definitely doesn’t work out for everyone.

cheeseomlit 1y ago
I agree that the 'housing as an investment' situation is awful but what are the prospects, realistically, for someone looking for a home right now? If it's a choice between renting or paying off a mortgage then to me it's a no brainer to go for the loan if you can get one on reasonable terms. Otherwise you're just throwing money away on rent, you'll never see those rent payments again. And that's what I don't want to see, private equity home ownership reaching a point where more and more people have no choice but to rent. Whatever the solution is to the housing crisis (probably building more homes, duh), I don't think it's relinquishing ownership to wall street and becoming a society of renters And yes I know they don't own that many houses relatively speaking, right now, but I personally don't see any upside to allowing the practice at all.
- bluGill 1y ago
  > Otherwise you're just throwing money away on rent, you'll never see those rent payments again. This propaganda is not the whole truth. Renting almost always means you live in a smaller/cheaper place (or perhaps in a more expensive place but you don't own a car) after maintenance costs are accounted for. People who take that different and invest it well end up just as rich as people who invest in houses - it isn't hard to find investments that have a much better long-term returns than real estate.

cheeseomlit 1y ago

I agree that the 'housing as an investment' situation is awful but what are the prospects, realistically, for someone looking for a home right now? If it's a choice between renting or paying off a mortgage then to me it's a no brainer to go for the loan if you can get one on reasonable terms. Otherwise you're just throwing money away on rent, you'll never see those rent payments again. And that's what I don't want to see, private equity home ownership reaching a point where more and more people have no choice but to rent. Whatever the solution is to the housing crisis (probably building more homes, duh), I don't think it's relinquishing ownership to wall street and becoming a society of renters And yes I know they don't own that many houses relatively speaking, right now, but I personally don't see any upside to allowing the practice at all.

bluGill 1y ago
> Otherwise you're just throwing money away on rent, you'll never see those rent payments again. This propaganda is not the whole truth. Renting almost always means you live in a smaller/cheaper place (or perhaps in a more expensive place but you don't own a car) after maintenance costs are accounted for. People who take that different and invest it well end up just as rich as people who invest in houses - it isn't hard to find investments that have a much better long-term returns than real estate.