Is owning a home mostly a bad thing?
- Thread starter nitro
- Start date
It really all depends, if you are able to trade and generate 20+% returns yearly then owning a home may actually make sense. One can successfully use their house as an ATM and invest that money wisely and beat the returns they're paying in interest and also own and home and possibly enjoy some capital appreciation in the property.
In that scenario, you would never have bought the house in the first place, since your down payment in the RE asset class is appreciating far slower than if you traded that money instead. And if you already owned the house when you found this nice system, you would sell it and free up the extra cash to lever up.
It seems like it would be ok to own a home if they would stop building new ones. Why would anyone buy my 12 year old house when they can buy a brand new one with whatever they want for the same price. Pretty soon you'll be talking new roof, furnace - air conditioner. And if you have lived in your house for decades if you did want to sell it it seems like you need to spend 30k to update all the shit just so it's desirable. It's a horrible investment unless you're paying cash but if you have a family in the burbs what are you supposed to do?
very interesting, thread and point - nitro. i've sold my second home, already a few years ago at no loss, and honestly am looking to put my current home on the market in the next couple weeks. there are many arguments for and against, but for me there are two points impacting me, today. the current location, (city, state) is not where i want to stay and grow old. plus, the neighborhood has remarkably deteriorated over the past 2 years namely with increased crime and lack of maintenance from current home owners. yet, also as important -- i want the flexibility to be able to act, relocate or buy into an area, or home in the coming 5 years without having cash -- illiquid. on that note, i also am selling off goods, like extra cars etc for cash today, and putting that money to work in my trading because these larger ticket items simply will continue to depreciate. same can be said for a chunk of land currently owned. useless, depreciating assets that are illiquid and will continue to be more illiquid in the years, ahead. any constructive comments, would be great to keep me thinking etc. thanks for the thread!
Your home is a LIABILITY, not an asset.
An asset provides a positive income stream; a liability provides a negative income stream.
I sold my condo in 2007 because it seemed very expensive and have rented units in luxury condos every since. I am CERTAIN my rent payments DO NOT cover hte mortgage, $400 monthly HOA, taxes, etc....especially here in Chicago.
I believe the only time to own a home is when the prices are likely to appreciate; or you have a small child and want to provide 'stability.'
Face it -- Americans are very emotional about what should be a rational, investment decision.
An asset provides a positive income stream; a liability provides a negative income stream.
I sold my condo in 2007 because it seemed very expensive and have rented units in luxury condos every since. I am CERTAIN my rent payments DO NOT cover hte mortgage, $400 monthly HOA, taxes, etc....especially here in Chicago.
I believe the only time to own a home is when the prices are likely to appreciate; or you have a small child and want to provide 'stability.'
Face it -- Americans are very emotional about what should be a rational, investment decision.
YES, I agree with you but also keep in mind the condition in late 2008. IMO, the banking system was about to completely break, so moving money from my banks, into land/home was done to protect. now, i see them as depreciating instruments, that served a purpose. hence, time to act. at times, everything is not always black and white. and, i also agree owning a home with the potential for upside appreciation makes sense, along with owning because of family, and/or security needs.
Guys, you can't think of EVERYTHING as an investment. It's usually a good idea to think of the return you will get on your money but quite honestly when it comes to your home, owning is more than a consideration of which investment class will outperform. When you own your house it no longer is a house, it becomes a home, you do what you want with it, you make it yours. As an investment, housing probably isn't the way to go, but think of all the things in life that you buy for your enjoyment that has ridiculously bad ROI's, have some fun people,enjoy life, it's more than just the money.
Having said that you better be making good $ trading to compensate for living the life!!
Having said that you better be making good $ trading to compensate for living the life!!