Timeline for Why do some people say a house "not an investment"?
Current License: CC BY-SA 3.0
22 events
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| Oct 25, 2017 at 12:44 | comment | added | JohnFx♦ | This answer seems to focus on why a house might not be a GOOD investment. I think OP was more looking for whether a house should be considered an investment at all. | |
| Oct 24, 2017 at 22:52 | history | edited | Brythan | CC BY-SA 3.0 |
deleted 2 characters in body
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| Feb 17, 2014 at 17:27 | comment | added | Neuromancer | Which mutual fund yields 8% safely without burning capital or taking extreme risks to do so. | |
| Dec 3, 2013 at 20:34 | comment | added | JTP - Apologise to Monica♦ | @justkt - First I agree with you, and would like to add an observation. Take the median income, and given the 30yr mortgage rate, calculate the mortgage and therefore the house that can be bought based on that income. If prices outpaced income overtime, homes would be less affordable and demand would dry up. If prices did not keep up, even those making a fraction of median income would be able to buy a house, and inventory would get depleted fast. Housing will swing over/under the imaginary line I just drew, but will come back in line. It must. The bubble was caused more by crazy financing. | |
| Sep 30, 2010 at 18:50 | comment | added | Tim | @justkt - actually, I was the one who commented on your answer... And I also live in high COL area. Long Island NY. I would say only a handful of places in the US outstrip Long Island for cost of living. By the way - I agree that a primary residence should not be looked at as an investment - I just don't like how owning a house is portrayed in a bad light with some of the remarks. | |
| Sep 30, 2010 at 18:47 | comment | added | justkt | @Tim - what I want to do is provide a counter-balance to the community on your perspective, rather like those who want to shout back at NARL that renting has value too. I'm not trying to be argumentative, just realistic. I live in an extraordinarly high COL area, which drives home that my house is a roof over my head, not the source of my future retirement income. Your experience is of course welcome on this forum, and I appreciate your comments and vote (yes, even that), as I'm sure will others reading and making up their own minds. | |
| Sep 30, 2010 at 18:45 | comment | added | Tim | @justkt - that article you posted is written in 2005 at the HEIGHT of the bubble - of course it was better to rent than to pay outrageous prices for houses. Sheesh. I also don;t understand why people think by renting they are not paying for things like real estate taxes. Of course they are - they pay the landlord and the landlord pays the RE taxes. But the landlord gets all the writeoffs. I love it when I hear people talk like this because it means I can have someone else pay off the loan of my rental properties and I get these great investments using other peoples' money. | |
| Sep 30, 2010 at 18:42 | comment | added | Tim | @justkt - I lost a SHITLOAD of money in the stock market. I have never lost money in real estate. I am comfortable with my area of expertise in real estate and do a lot of diligence in buying. I find the stock market much harder to understand and control. Apparently your advice and experience does not match mine. That is fine. Stop trying to convince me. | |
| Sep 30, 2010 at 18:40 | comment | added | Tim | @justkt You asked the downvoter to give a reason. I did. Now you just want to argue with me. I read your links. And they do not apply - especially to my situation. I bought houses in the early 90s and through the early 2000s in the northeast. I sold a few in 2006. I did fine. Even if I bought my primary residence up to a few years ago I would be ahead of the game. I have to wonder if any of your advice is based on real experience or just from reading articles. | |
| Sep 30, 2010 at 18:37 | comment | added | justkt | @Tim - check out the NYT calculator, read this article (nytimes.com/2005/09/25/realestate/25cov.html?_r=1), and then realize that renting long term is a bad idea in many markets, but on the coasts in some area it is a very financially sound decision. The recent crash made that true of fewer areas, but still not all. Plug in the numbers for your situation in the NYT calculator and see just how many years even in a good area it takes to recoup closing costs, etc. | |
| Sep 30, 2010 at 18:20 | comment | added | Tim | @justkt - that same advice can be used for other assets as well - "diversify" is the issue. Just because a house consolidates wealth into one place does not mean you should keep renting for the rest of your life. That is silliness. Renting long term is likely a bad idea. It is a good way to ensure you will miss all market inflation. My father was a pastor for a while and because the church provided him with housing he missed a HUGE wealth increase because he had no equity that he normally would have if he bought a house. | |
| Sep 30, 2010 at 18:04 | comment | added | justkt | @Tim- While each case is different, locality comes into play, and so forth, it is possible to pull general trends and truths from the market, and to use those to understand it better: finance.yahoo.com/real-estate/article/102603/… | |
| Sep 30, 2010 at 17:22 | comment | added | Tim | All you have to look at is this: "sometimes come out on top". For every case I have you can show a contrary one, and vice versa. So there is no "truth" here. Much of this is location and time dependent and is unreliable for making decisions. Your other content is good though. | |
| Sep 30, 2010 at 17:10 | comment | added | justkt | @Tim - While my first paragraph is contrary to your experience, I believe you should check out the sources I have added. It is entirely factual according to the US Census and the Case-Shiller index. Did you happen to check out the NYT calculator I liked or any of the original articles? They take into account tax deductions, the various costs of renting, and all those facts that are for home ownership, but yet say that renters STILL sometimes come out on top. I did clarify that my points are not about income properties, which in some areas where rents are high work. | |
| Sep 30, 2010 at 17:09 | comment | added | Tim | @justkt - I must add however, that I do not think that viewing a primary residence or a vacation home should be considered an "investment". It is a significant purchase of an asset that may or may not appreciate. It is certainly more likely to appreciate in the long term and for many people their primary residences were the most significant asset they owned. See my answer as well. | |
| Sep 30, 2010 at 17:08 | history | edited | justkt | CC BY-SA 2.5 |
Added proof for first paragraph and a clarification/
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| Sep 30, 2010 at 17:04 | comment | added | CrimsonX | +1 for "Instead I'm buying because home ownership brings other values than money that a rental apartment would never give me and a rental home would cost more than the same home purchase (given 10 years)". Your point is well taken - in some areas it is plain impossible to find a house to rent compared to finding a house to buy. | |
| Sep 30, 2010 at 16:50 | comment | added | Tim | @justkt - Your "Advice" and observations are contrary to my experience. Your whole first paragraph is not factual and one could show circumstances the other way around. So much depends on the timing, the house bought, the location, etc. It is silly to pretend to say that a house doesn't give a "Return". A whole host of people have experience that contradicts your statements. You also leave out key financial benefits to owning over renting. (estate tax, exemption from capital gains, deductions, etc.) The downvote was for generally Bad advice and incorrect comments | |
| Sep 30, 2010 at 15:02 | comment | added | justkt | I'd love to hear from the downvoter what was not useful about my post and learn from my mistakes. | |
| Sep 28, 2010 at 19:27 | comment | added | justkt | @John - glad it helped. It was insightful for me as well. | |
| Sep 28, 2010 at 19:20 | vote | accept | John Gietzen | ||
| Sep 28, 2010 at 17:57 | history | answered | justkt | CC BY-SA 2.5 |