Yup, I agree 100%. I listen to NPR daily and whenever they discuss inequality one of the big issues is black homeownership and generational wealth. I paid $325k for my house, the same model over the last 6 months has sold for close to $500k. Even if for some reason it dropped to $250k I’d still be quarter million dollars ahead of a renter. Plus I got tax breaks when I had a mortgage that aren’t available to renters. IMO buying is always better than renting, although I’m sure some people argue that it’s not.
That’s a terrible idea. That’s like selling your stock because it gained 20%, I’d rather hang in for more gains.
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No. But again…I’m talking about shelter. Yeah…I’ve got equity, but I dont’ tap it so it does nothing. But why do you think I would rather rent.
You seem to be arguing against home ownership?
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I am saying that the reason I bought a home was for shelter. I did not buy it as an investment. I do not borrow against it and “put my biggest asset to work for me”. So the equity in the house is little more than emergency should something happen and can sell it and use the money to live. I don’t expect that to happen, so the only thing this “investment” does is increase my net worth.
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Really it hasn’t unless you have added to it. It is the same house. It is the value of the fiat currency that has gone down.
How many ounces of gold could you buy with your house price versus 10 years ago?
How many gallons of gas could you buy with your house price now versus 10 years ago?
How many dinners out could you buy with hour house price now versus 10 years ago?
Inflation is the great distorter of value perception.
That has nothing to do with the topic. Say KC is paying $1000 a month on his mortgage for 20 years vs paying $1000 a month rent for 20 years. Sure, he could bought a lot of gas for his $1000 10 years ago but he’d be evicted from his house or apartment.
KC didn’t buy his house as an investment but presumably it’s one of the smartest things he’s ever done financially. I have over 300k equity in my own house and I absolutely count it as part of my net worth even though the house isn’t for sale. I may sell in the next year and I have high confidence that I’ll walk away with between 300-400k. Much better deal for me than if I had rented over the last 11 years.
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I don’t think of my house as an investment because of all the costs involved in owning and maintaining it.
Wow. I even said that my house has increased my net worth. But here’s the thing about my “investment”. I don’t plan on selling it. IT’s my “forever home”. I don’t plan on selling it unless a life event makes it necessary. So no matter what I paid or what it’s worth, my choice is to realize the gain and live with the negative life event, or pray for good health for my remaining days and keep it. Because of the hand life dealt me, I still have a mortgage on my house. I could sell, keep a bunch of money and rent - but I don’t like common walls and I do like a garage so my option would be to rent a house. And rents on a small home here (that are not in a slum) is double my house payment…so I’d be kind of foolish to do that.
Think we’re going around in circles here. On one hand you say you didn’t buy your house as an investment, but you say owning it has increased your net worth.
Real estate is like any other unrealized asset class. I bought 25k of Nvidia in October and it’s worth $55,000 today, up 220%. I count that as real money though I can’t spend it. I could sell it and bank the gains but I have confidence it’ll go up. My house is a little different in that if I decided to sell to spend the gains I have to find a place to live. But as with my Nvidia, I feel my house is increasing in value.
Okay…I bought my first house and values started shooting up. There were supposedly saavy folks telling us to put our biggest “investment” to work for us. If someone viewed their house as an investment and did that, when something like 2008 comes along, it looks like a kind of poor investment. Yeah, my houses all went up, but I didn’t buy a house based on future value - I bought a house for shelter. First and foremost. Indeed…had I NOT upsized in the past and just kept my first house, I would reap a shitload more money than I would on any subsequent house. My first house was $92k…Today it’s selling for over $350K. Even if I didn’t have a mortgage on my current house, selling it would only net about $185,000.
Yep, I’m tapping out on this one. If someone doesn’t think that owning a home is an investment there’s nothing I can say or do to change their mind.
I’ve said it’s an investment but it’s one that is rarely realized. And…If I hadn’t used the “profit” from my initial investment… I would have more money than the profits of the investments used to buy a bigger investment would bring me. Which is better, a profit of 180,000 or a profit of $250,000?
I would like to clarify my previous post quoted above. When I think of an investment I think of the most profitable return for the funds invested. So even when you sell a house for more than you paid for it when you factor in costs to own it and money spent on maintenance and capital improvements the profit from the initial investment is not as good as it appears on the surface.
At the same time I think that owning a home instead of renting one is a good idea for a number of different reasons. When you rent the only thing you have to show for it are cancelled checks while you are building equity by owning a house. In addition, it is nice to find a home that you love and having control over what improvements are made to it.
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A house is an investment that’s rarely realized? If you buy right in theory you realize the profit every time you sell. If you make 100k profit in selling a starter home and roll that into a family home, you still made 100k profit. It’s a superior profit to 100k made from selling stock since you aren’t paying tax on it.
I still fail to see any point you’re trying to make. I feel like you’re grinding an axe but this weak mind fails to see what it is.
I think some people just look at the narrow definition of an investment, it’s not just stocks, bonds, rental real estate, etc it’s also other things such as investing in something that will save you money in the long run. The racquet club my son played at for years “invested” in LED lighting that cost over $60,000 but saves almost $3,000 a month in electricity costs.
My home is paid off and I still have expenses but they are much less than it would cost me to rent my exact same house, probably $2,000 a month less, plus if I ever decide to sell I’ll have over $400,000 in cash. IMO that’s a good investment.
And, at least currently, some or all of that profit is not taxed.
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Okay…it’s an investment. Do you think someone paying $500k to day for a house you bought for $200k wil see the same level of appreciation? Bearing in mind that up until the 80’s, the average price of a home was about 1.79 times the average household income and today it’s 7.25 times income. If people are priced out of a market, I think that lack of demand will not result in the dramatic increases we have seen since then. But it’s an investment. In our cases, it was a pretty good investment. Will my kid be able to say the same thing?
That’s not my problem. I may just give my kid the house or a significant down payment, if I feel they deserve it.
I can’t predict the future but IMO if someone can afford it they should buy instead of rent. If you think buying a home today is a bad idea tell your daughter to rent for the rest of her life. My kids plan is to buy a duplex or multi-family property and live in it for a few years, then buy a single family home to live in and keep the investment property.