Why your house is a terrible investment | Hacker News Reader

Why your house is a terrible investment

jlcollinsnh.com

6 pointswilliamsmj14 comments

I'm glad I didn't listen to this article back when I bought my house. I pay less in mortgage payments per month than nearby two-bedroom apartments pay in rent and my home value is 3x what it was when I bought it.

In a vacuum, sure it's a bad investment. A house as described in the article is basically one that you buy and neither live in nor rent out. An empty and unused house is indeed a bad investment.

When people say a house is a good investment they mean, "Given that people need someplace to live and will be paying the cost and maintenance for lodging, a house is a good investment since that cost benefits an asset you own".

It was also a very simple way of making people save money for retirement: the bank would require you to slowly pay off the loan, so in the end, at least you'd own a house. In a world gaining population, you also have a speculative aspect, but it was a good idea even without that. At least it protected the real value of your savings.

With laxing repayment requirements, volatile markets, and easier access to other investment types, times have changed. If you know where you want to live, it's still an easy way to save money, but a stock market index fund is equally simple to use.

If you view your house as an investment first and a place to live second, then yeah, it probably will be a bad investment especially with interest rates, maintenance costs, and insurance rates remaining high.

That being said, I do enjoy being a homeowner more than a renter. No shared walls, no waiting for maintenance, no worrying about whether the landlord will increase my rent by a lot, and I have a back yard for plants and a fire pit. Never got that while renting.

Yeah. If instead you buy a house on leverage to rent it out, it can be a decent investment. If you're lucky the down payment is your only cost and the renter will pay for everything else.

And you get good tax benefits.

And if you make it a short term rental and do things right you can deduct the depreciation against your W2 income. This can be a massive benefit if you do accelerated depreciation.

It still won't be a great investment unless there is significant appreciation...

It is true there are some downsides to home ownership. But if owning a home is such a horrible investment then why are so many buying up single family homes to turn into rentals? Personally our home has doubled in value over the past ten years. Of course that fluctuates but it is real.

I guess it's a good investment if you are able to cash-out but, often, you still have to buy another house which has also doubled in value?

I am trying my best to read this site on Safari for iPhone but god the ads on this page are something. I get it, I am not against ads but sites like this are why I begin to get annoyed so much so than I’d rather not learn the content than dealing with distraction of ads and the accidental clicks on the page. Sorry, I hate to say it but if you this your page, do better.

Perfect for me, but I run kablock and wipr....

Depends on when u buy ...bought my first one in 2019 and sold it in 2022 ..making a $215k profit in Pennsylvania.

You could get very lucky and buy before a boom tho they don't happen often. Historical Low interest rates drove that boom. I Am missing my three percent rate I had on my first house.

While a home may not be a good monetary investment, it is a good investment for social and family stability=> have a place to go home to, store your stuff, have a family hangout space, all with predictable monthly payments is great to have.

The alternative, renting, has no chance at generating equity. People have to live somewhere. One option does have a high probability of increasing a family’s wealth over the long term. The other has zero probability of doing so. This article carefully prunes the premises so as to lead to an inevitable conclusion. Feels like intellectual dishonesty.

My house is a wonderful investment: it is mine and whatever happens my family has a roof.

This is beyond any pecuniary aspects.

I think the way people buy homes here in America is no different than the way we consume other goods. Two things matter above all else in the decision process: 1. What other people think of us(although we refuse to admit it) and 2. indulgent, first world, luxurious comfort.

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