It's definitely cheaper to own than rent in the long run, but like 15+ years.
House appreciates and keep up with inflation, but not a great investment vehicle because the nearly break even ROI. It's not all sunshine and roses contrary to common wisdom.
In my view, owning a home primarily acts as a safeguard against inflation, it represents a "safe" investment option for "lazy" individuals who reluctant to learn more complex investment strategies that could yield higher, riskier return.
Owning a home works out financially better than renting which is what you should be comparing it to. You can't compare it to a financial investment because its unrealistic to have $0 housing budget and put it all in the S&P 500 or anything else like that. I think you're getting hung up on the "owning a home is an investment" catch phrase and taking that literally.
Your example is based on averages, which in the real world don't exist. In a growing area, single family detached homes (i.e. not townhomes or anything with shared walls) are going to out-appreciate others types of homes. And location matters more than anything. Good schools, low crime, close to amenities, shopping, etc. and those houses will go up faster than townhomes or condos in a higher crime, worse school area. You can also help the appreciation on a home by doing improvements to it and the property. Convert a 3rd floor attic to live-able space by adding a bedroom and bath and you could see a house bump up into the next range of comparables for that neighborhood/area.
It's not all sunshine and roses contrary to common wisdom.
No it’s definitely not. Things break, seemingly in a coordinated manner. One year your maintenance costs might be basically 0, another year they could be 5 figures.
In my view, owning a home primarily acts as a safeguard against inflation, it represents a "safe" investment option for "lazy" individuals who reluctant to learn more complex investment strategies that could yield higher, riskier return.
Yeah go find an actual homeowner in person and say that to their face. As a homeowner I can tell you that there’s nothing “lazy” about the home-buying process. It’s stressful, emotional, and challenging. I too dabble in “complex” investing strategies and I can tell you that something like covered calls or “The Wheel” is way easier and more predictable than the typical home-buying process.
At the end of the day, investing is about allocating risk. You keep some % of your money invested in low-risk, stable-return assets. A house is a great example. And you ESPECIALLY don’t invest money loaned on margin in high-volatility assets.
Comments
It's definitely cheaper to own than rent in the long run, but like 15+ years.
House appreciates and keep up with inflation, but not a great investment vehicle because the nearly break even ROI. It's not all sunshine and roses contrary to common wisdom.
In my view, owning a home primarily acts as a safeguard against inflation, it represents a "safe" investment option for "lazy" individuals who reluctant to learn more complex investment strategies that could yield higher, riskier return.
That and your example are kind of ridiculous.
Owning a home works out financially better than renting which is what you should be comparing it to. You can't compare it to a financial investment because its unrealistic to have $0 housing budget and put it all in the S&P 500 or anything else like that. I think you're getting hung up on the "owning a home is an investment" catch phrase and taking that literally.
Your example is based on averages, which in the real world don't exist. In a growing area, single family detached homes (i.e. not townhomes or anything with shared walls) are going to out-appreciate others types of homes. And location matters more than anything. Good schools, low crime, close to amenities, shopping, etc. and those houses will go up faster than townhomes or condos in a higher crime, worse school area. You can also help the appreciation on a home by doing improvements to it and the property. Convert a 3rd floor attic to live-able space by adding a bedroom and bath and you could see a house bump up into the next range of comparables for that neighborhood/area.
No it’s definitely not. Things break, seemingly in a coordinated manner. One year your maintenance costs might be basically 0, another year they could be 5 figures.
Yeah go find an actual homeowner in person and say that to their face. As a homeowner I can tell you that there’s nothing “lazy” about the home-buying process. It’s stressful, emotional, and challenging. I too dabble in “complex” investing strategies and I can tell you that something like covered calls or “The Wheel” is way easier and more predictable than the typical home-buying process.
At the end of the day, investing is about allocating risk. You keep some % of your money invested in low-risk, stable-return assets. A house is a great example. And you ESPECIALLY don’t invest money loaned on margin in high-volatility assets.