3 ms·

How is a house an investment at all?

Stubb 13y ago
Yeah, I look at my residence as a depreciating asset that consumes time and money. We'll see how the so-called investment aspect works out for people once interest rates start returning to historical norms.
specialp 13y ago
I think people have the wrong idea viewing a home solely as an investment. It is indeed a form of investment that you get the benefit of living in. Sure if you look at the amount of money I put into a home vs the amount of money I could invest in S&P 500 it is then a terrible investment. But there is a tangible result here where I am able to live in a home and do whatever I want to my home while as a small side effect I have an investment.
dmm 13y ago
If you generate income from it by renting it out.
AnimalMuppet 13y ago
It is, and it isn't. I've owned a house. Or rather, I've had a mortgage on a house. I spend a bunch of money each month. After some number of years, I owned some fraction of the house. I've rented. I spent a bunch of money each month. After some number of years, I owned precisely nothing. So that's how it's an investment. On the other hand, what I'm primarily buying is a place to sleep each night, not an investment. So in that way, it's not.
ctdonath 13y ago
You can usually sell a house for more than you put into it. Mortgage and rent are usually comparable (I find rent is usually more). Rent is not an investment at all, as you'll get absolutely nothing back when you leave. Even for worst cases like buying at peak, paying for maintenance, selling low, interest costs as much as the house, etc the result is you still get a big check back; a lousy investment is one thing, knowing you won't get anything out of it but momentary use is another. And methinks the biggest "investment" value of all: when you own it outright (may I recommend you suck it up, get humble, and pay cash up front), it's yours and nobody can evict you. Knowing you'll have a safe place to sleep is huge. Yeah, property taxes exist (far less than rent, which you're paying in your rent anyway), and eminent domain may screw things up (unlikely if you choose wisely), but it's far better than risking receipt of a notice saying "sorry, but we've sold the building which will be demolished next month". If nothing else, buy a $10,000 property somewhere (see zillow.com) and DIY build a $20,000 small house on it (lots of options available, search "tiny house"), cash as you go. If I'd have a do-over, I'd go that route no question.

Stubb 13y ago

Yeah, I look at my residence as a depreciating asset that consumes time and money. We'll see how the so-called investment aspect works out for people once interest rates start returning to historical norms.

specialp 13y ago

I think people have the wrong idea viewing a home solely as an investment. It is indeed a form of investment that you get the benefit of living in. Sure if you look at the amount of money I put into a home vs the amount of money I could invest in S&P 500 it is then a terrible investment. But there is a tangible result here where I am able to live in a home and do whatever I want to my home while as a small side effect I have an investment.

dmm 13y ago

If you generate income from it by renting it out.

AnimalMuppet 13y ago

It is, and it isn't. I've owned a house. Or rather, I've had a mortgage on a house. I spend a bunch of money each month. After some number of years, I owned some fraction of the house. I've rented. I spent a bunch of money each month. After some number of years, I owned precisely nothing. So that's how it's an investment. On the other hand, what I'm primarily buying is a place to sleep each night, not an investment. So in that way, it's not.

ctdonath 13y ago

You can usually sell a house for more than you put into it. Mortgage and rent are usually comparable (I find rent is usually more). Rent is not an investment at all, as you'll get absolutely nothing back when you leave. Even for worst cases like buying at peak, paying for maintenance, selling low, interest costs as much as the house, etc the result is you still get a big check back; a lousy investment is one thing, knowing you won't get anything out of it but momentary use is another. And methinks the biggest "investment" value of all: when you own it outright (may I recommend you suck it up, get humble, and pay cash up front), it's yours and nobody can evict you. Knowing you'll have a safe place to sleep is huge. Yeah, property taxes exist (far less than rent, which you're paying in your rent anyway), and eminent domain may screw things up (unlikely if you choose wisely), but it's far better than risking receipt of a notice saying "sorry, but we've sold the building which will be demolished next month". If nothing else, buy a $10,000 property somewhere (see zillow.com) and DIY build a $20,000 small house on it (lots of options available, search "tiny house"), cash as you go. If I'd have a do-over, I'd go that route no question.