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Viewing home as an asset, home as an investment, purchasing home as investment, home as an investment debate, home is not an investment it is a consumer good
what if the car gets you back and forth to your job - and without the car you would not have the proper tools to be a productive earner?
its still a depreciating asset just like any equipment a business buys to do whatever it is it does.... the overall business may be an investment but not everything in the business is an appreciating asset
the actual definition of investing is re-deploying assets and consumption today for benefits in the future.... guess everything and anything can pretty much fit within that definition if you think doing something will produce a benefit in the future....
Huh? So let me get this right, throwing money at a home where you get less than if you were to rent is a good idea because what? By your OWN measure, throwing money in the air will net you less than if you were to rent... if you put money in the piggy bank, you get less money than if you were to rent... if you buy a house, you get less money than if you rent... get it? No? Not surprise... by your own definition of "investment" you do "something" with it and you "get" something back... well throwing money in the air or putting it in a piggy bank is doing "something" with it and you "got" something back in the end didn't you?
You seem to have a very "lax" definition of what investment really is... I suppose Madoff is really an "investment" to rather than a scam? Right? By your definition.... sorry... for the majority of us out there we expect a return... and we don't like less than 50% chance of returns.. everything has a standard to measure it up by... whether its buying houses or playing the stock market... an investment is not simply doing "something" with money and "get" something back in the end... otherwise by your definition, anything could be construed as "investment" throwing money in the air or "investing" in Madoffs schemes... don't try to legitimize Madoff, alright?
Wow, this is really ridiculous! Yes, a piggy bank will have the same amount in it as you put, no interest earned. Throwing it to the wind, I would wager you'd lose some as the "wind" would certainly carry off some of it, but you could still catch most, on a not-so-windy day, when it fell back down. Ownership (as in home)- you pay monthly for something you will eventually OWN, regardless of "other expenses" you post about, and it will GROW in value, returning more for your money than what you originally paid.
Renting- money in the piggy bank that someone else takes out, money to the wind and when it falls, none comes back for you to catch. It's GONE. And the "renters save in other ways" arguement....... So do homeonwers. Most homeowners also have 401k/403b's, roths, college savings for their kids, savings accounts, andmaybe even some CD's. In fact, those savings allow many to take out when ready to buy a home and actually have a down payment because of. So this idea of yours that if one has a mortgage, using it as yet another form of "savings" or holding tank for their money, they are wasting it because they could better "invest it" in something else while renting? You just don't make any sense at this point. Rent is rent, buying is buying. Renting is either done as a temporary condition while looking to buy or waiting for the "right time to buy", becuase you are in between homes if building and sold current one, or simply because a renter WANTS to rent or has no choice. I will tell you most certainly that it is almost NEVER because they think it's a better "financial decision" and better "investment"!
not totaly true,,,, we sold our house years ago, renting here in nyc is a better value to the tune of 1,000 a month difference on buying our co-op vs renting it ....
i have been buying other investments with the difference each month as well as the down payment money...........
recently bought a 2nd home in the poconos but not for investment, we enjoy going there and 1 day may live there full time
Here is an article that basically says the SAME thing... it was an article for TODAY on CBS... renting WINS out buying... you make more money with RENTING if your goal is INVESTMENT and not looking for a "home".... fairmarketvalue... you can keep thinking everyone here moves every 3 years, pay nearly 50% in downpayment, but regardless of what you say.. you are NOT the average american and I am looking out for their interest, not yours...
Hey do you mind posting my definition of what an investment is? Cause last time I checked I never SAID what I consider an investment but you clearly have detailed everything out for me by making assumption after assumption about my so called definition.
You assume home buying is an investment because? Just because you call it one... that's about all you put into explaining it... well sorry, investment is not "just because"...
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Time plays a major role in this. What about after 30 years? What about all the money not being spent on a mortgage for the number of years AFTER you own it outright? Shouldn't that be factored in if you want to take extremes it should be.
If you even read my post you would of known I accounted for it... perhaps you should read again...
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So say a couple buys a house when early 20's. (Get a 15yr mortgage) by it off by mid 30's then live rent/mortgage free (minus taxes) for 40 years? Would you not consider that house purchase an investment of some sorts? Then they can leverage that investment by getting a reverse mortgage or using it as a life insurance policy for their children?
Again what did I say? Perhaps you should read my post when I answered those very same questions and guess what... YOU LOSE 500k to 1 MILLION in those cases... and by the way... the typical American will only live 13-23 years after... not 40... and even if they did live to 40 years, guess what... you lose even MORE money... perhaps you and fairmarketvalue should READ a post before stating something completely wrong or something I already answered already but no... you just try to slow everything down and confuse everyone... stop it... you are doing this forum a disservice and its readers...
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And you are not THROWING money at a house. You are also gaining the beneift of living there and allowing for a large tax write off worth lots of money ontop of the other benefits of homeownership.
Tax write-off? You mean interest payments deductions? Are you serious or just dense to bring this up? You are telling me that its a "good" thing to pay $1 in interest and get a 20 cent deduction in gross income (not credit)... you are seriously telling people that?
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am not saying home ownership is a great investment. Never said that. I am just saying it can be considered one in many respects and you tweak the scenarios to make it seem better/worse for each situation.
You are saying home ownership for the typical average American is an "investment"... how about this.. you know the numbers... if someone told you when compared to renting there is a 100% chance of you losing more money buying a house than renting... would you consider it an investment? Based on your loose definition of "investment", it would be yes... for me, it would be NO...
You assume home buying is an investment because? Just because you call it one... that's about all you put into explaining it... well sorry, investment is not "just because"...
If you even read my post you would of known I accounted for it... perhaps you should read again...
Again what did I say? Perhaps you should read my post when I answered those very same questions and guess what... YOU LOSE 500k to 1 MILLION in those cases... and by the way... the typical American will only live 13-23 years after... not 40... and even if they did live to 40 years, guess what... you lose even MORE money... perhaps you and fairmarketvalue should READ a post before stating something completely wrong or something I already answered already but no... you just try to slow everything down and confuse everyone... stop it... you are doing this forum a disservice and its readers...
Tax write-off? You mean interest payments deductions? Are you serious or just dense to bring this up? You are telling me that its a "good" thing to pay $1 in interest and get a 20 cent deduction in gross income (not credit)... you are seriously telling people that?
You are saying home ownership for the typical average American is an "investment"... how about this.. you know the numbers... if someone told you when compared to renting there is a 100% chance of you losing more money buying a house than renting... would you consider it an investment? Based on your loose definition of "investment", it would be yes... for me, it would be NO...
You saying Rent vs buy nets the renter a million over a buyer is based on one set of numbers which are not necessarliy the norm for everyone.
And I am not arguing that buying provides a better payout then renting.
I am just saying a person can BUY and still make money and hence consider a home an investment.
And the interest payment deduction is just a benefit over rent which gives no write off but surely not a reason to buy. But if you can BUY a house and have the same or lowering payment versus renting the same house then the deduction just adds to the buyers bottom line.
You can swing this discussion into a rent vs buy scenario and that is fine. And I agree that renting in MOST cases will net you more money in the end. Especially with house prices still very inflated. But one can still make money by buying long term.
All that said, if you can get a great deal on a home this year, with a great interest rate it might not be a bad investment for the near future. If you can get in at around 5% interest, you're surely going to be ahead of inflation. Inflation is for sure going to be more than 5%, and can be in double digits the way money is thrown around. Having money in a home is a hedge against inflation.
Here is an article that basically says the SAME thing... it was an article for TODAY on CBS... renting WINS out buying... you make more money with RENTING if your goal is INVESTMENT and not looking for a "home".... fairmarketvalue... you can keep thinking everyone here moves every 3 years, pay nearly 50% in downpayment, but regardless of what you say.. you are NOT the average american and I am looking out for their interest, not yours...
Not that anyone is counting, but moved only "every 3 years" once. The other 2 were 4 years, and the last was 9 years. And the current home we built has the most "cash" of any of these. The others had anywhere from 15-30% down, not 50%. So contrary to what you believe, this IS the average american (putting money down on a home) and before the RE "boom", it was almost a REQUIREMENT in order to get a mortgage. There was a day when it was tough to get a loan without 20% down. The NOT SO AVERAGE AMERICAN is the one who made a COMPLETE mess of the RE market by putting nothing down, having no "vested interest" in the home and making it very, very easy to WALK AWAY because of it! There was truly NO difference in this type of home buying and a renter. They never had any "investment" in the home, therefore, were just renting it anyway. It's a lot easier to walk away from a home like that, as it is walking away from a lease. So contrary to what you may think, I believe home buying and the example of it as I have given is far more "average american" than you think. And now that Obama has requested that we hold the banks more accountable and start "lending money again", I think we'll find out just how many can continue to "buy homes" the traditional way. They've certainly learned their lesson with reckless lending and I would guess the 20% down will likely be a more common criteria again. It should be!
Lastly, your article is a perfect example of how "distorted" things get when given the extreme examples they did. People on here that protest that "renting is better" are not renting 2million dollar homes for 4,500/mo. They are renting an apartment and comparing it to buying a home COMPLETELY different than what they are renting. If they were to be given the oppt. to buy the same exact property they are renting (say a 2bd, 2bth apt. or condo), they would definately buy for cheaper, at least in most parts of the country. NYC and CA are hardly the norm on either side of the arguement. Please, I hope you are capable of understanding that article was very misleading! Because of the interst rates we're locked in at, we pay a TOTAL of $2,800/mo for P&I, taxes and ins.(remember, we have a 55/45% LTV). It's a $650,000+ home and would "rent" for about 5,000/mo in this area. Apples to apples, my friend. $2,800 around us would get you a nice 2bd, 2bth apt. (and about 1/4 the sq. footage) in a buiding of multiple units. So it all obviously depends on how you spin it!
Please, I hope you are capable of understanding that article was very misleading! Because of the interst rates we're locked in at, we pay a TOTAL of $2,800/mo for P&I, taxes and ins.(remember, we have a 55/45% LTV). It's a $650,000+ home and would "rent" for about 5,000/mo in this area. Apples to apples, my friend. $2,800 around us would get you a nice 2bd, 2bth apt. (and about 1/4 the sq. footage) in a buiding of multiple units. So it all obviously depends on how you spin it!
If you rented instead, that you could put that 45% that is sitting in home equity into income-producing assets. Your net costs would be less than 2800. So it's not quite an apples to apples comparison.
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