Renting and reinvesting the savings from renting, will outperform owning and building equity
- Thread starter Robbie3000
- Start date
Using that logic, buying stock in apple isnt an investment either if you dont sell
Owning a single family home that you occupy is a living expense not an investment. A single family house only becomes an investment when you purchase for the sole intention of making money off of it e.g. to flip or to rent out. Do houses appreciate? Yes, but so do rare pairs of Jordan sneakers, antique couches, and baseball cards.
A lot of home owners make the same mistakes Uber drivers make when it comes to determining profit or loss. They basically say “I have more cash right now than I did before the sell so I guess I profited” but neglect all the hidden costs like maintenance and etc that’ll quickly put you in the red. So, yes your house appreciates but are you looking at that appreciation accurately?
If you bought a house for $100,000, put $120,000 in it over 20 years (main, tax, ins), and sell it for $200,000 you will leave the sale with $100k cash but be in the red $20k on the “investment”. Many more home owners in end up in a situation like this rather than the “I bought at 100k sold at 800k and I’m rolling in the dough” variety.
You are literally making this “income” requirement up.
How the hell is it an investment if there isn’t income? If there is no income requirement then basically everything is an investment...an ikea desk, a computer chair, a light bulb, or anything else you buy.
Absolutely not. If you are not seeing a return, how can it be an investment? You are living there and sinking cash in. Unless you occupy homes with the express intention of flipping it, it is merely an asset that *can* appreciate, not an investment. Obviously markets can shift where value in a home plummets and you are now underwater, but nobody in their right mind buys a home to LIVE in and also calls it an investment. You can flip a house or rent out a house, but living in and paying taxes as well as numerous incidentals in the off chance you will flip it years down the line for enough to make it worth it?You are literally making this “income” requirement up.
If you are “investing” in something to pass down thats a whole other thing, but what kinda liquidity comes from a home you are living in? Not to mention when you want to cash out on your investment, a part of that is you having to physically move to another home, unless you sold the home to someone and then rent from them.
R.E.N. Spells Ren
Veteran
It’s an investment because it’s an appreciating asset.
Jay-Z buys some artwork for $1 million, a few years later it’s worth $5 million. It’s an investment. It’s not paying him “income” tho.
Stocks have dividends, but those are peanuts. The change in value or the stock is what makes you the real money.
R.E.N. Spells Ren
Veteran
Liquidity? who was talking about liquidity? You’re just throwing out a bunch of terms you don’t really understand. An appreciating asset is, by definition, an investment. Not all investments part regular income.
Bruh, these cats are wild. Many people went belly the hell up during the housing crisis cause of this “investment”. People are banking on exploding housing prices in some markets to call this an “investment”, meanwhile there is no true growth as they are still spending money to tens to this asset in the meantime. This logic literally says that if I believe I can make more money than I spent, anything can be an investment. While true, the lifetime of this “investment” is most people dont see a return outside of special circumstances (gentrification making prices double or triple within a decade or a major business moving in). I guess the logic is that if I make back what I spent at least, I have effectively lived “rent free” for the time I stayed.
Bruh, its an appreciating asset that lacks liquidity. If you need to move it today cause tomorrow it wont be appreciating, you aren’t able to because houses take time to move unless an offer is already on the table. The term “cash poor” describes a lot of folks who “invest” in homes. You have an great asset but one that is not by any means quick to move. If economics make its own shytstorm, not only do you lose value rapidly on said asset, but the bills to upkeep it are not expected to drop in the meantime. Your 400k investment starts trending toward 250k, the roof repairs, taxes, etc still have to be paid. You never see a dime on it until you move it. You brought up Jay Z buying pictures but ignore that he can more easily move them even if they require more funds to buy simply because they have a small niche in a less volatile market. Real estate has volatility, especially on single family homes, and very few hold enough significance the same as niche paintings will. Paintings dont normally suffer infestations, neighborhood decline due to empty housing and job closure, as well as consumer sentiment on the economy locally and regionally.
Might as well invest in baseball cards. Most people are not savvy or fortunate enough to see a home as anything other than a place to live. Again, when “wealth” was wiped out during the recession, the majority of what that wealth was came from property aka homes folks were living in. Buying big ass homes and hoping they will forever increase in value is NOT investing.
lol at folks not understanding that a home you 100% own is an appreciating asset aka an investment trying to share financial knowledge 
fail to understand how to leverage a 200,000 piece of property and call it an expense brehs
fail to understand how to leverage a 200,000 piece of property and call it an expense brehs
You know what those two examples you posted have in common that a house you live in doesn’t? YOU DON’T HAVE TO PAY FOR THEM CONTINUOUSLY LIKE YOU DO FOR A PLACE OF RESIDENCE. When I bought shares of HCFT last week I gave cash, got my shares, and that’s it...those shares do not require me to pay to maintain them, doesn’t require yearly tax payments, or etc. moneyunder30.com has a good breakdown:
Typically when you purchase an investment, it doesn’t require an ongoing investment of cash. But a house certainly does.
Not only do you have to make monthly mortgage payments, but you also have to pay real estate taxes, homeowners insurance, sometimes private mortgage insurance, and utilities. You also have to maintain the property, which means providing a regular series of repairs and maintenance as necessary. These expenses are called carrying costs—the costs of carrying the investment.
Even more costly are the major repairs associated with homeownership. This can include replacing the roof, siding, windows and doors, carpets and flooring, and driveways. You may also engage in major remodeling, that will require replacement of kitchens and bathrooms.
Each of those expenses individually can cost thousands of dollars. Over the course of several years or decades, they can cost tens of thousands dollars.
True investments don’t require that kind of ongoing outlay of cash. You can rationalize those expenses based on the fact that the house is providing you shelter. But that gets back to the original premise—a house is shelter, and not really an investment.
Yeah they are basically moving off of sociological programming...home = investment is the bank’s version of debeer’s diamond ring = marriage scam. The saddest thing is people are puppeting this bullshyt advice with a market correction clearly on the way. One day you the man with with a 500k loan, 300k paid into it, with a 600k valuation...instantaneously you can become the guy with 500k loan. 300k paid into, with a 300k valuation. If the house is shelter then these numbers are irrelevant but if it’s an “investment” you either gotta ride it out and hope it appreciates or go bk...shytty options.
you dont know anything about investing you should stop typing tbh
lol at folks not understanding that a home you 100% own is an appreciating asset aka an investment trying to share financial knowledge
fail to understand how to leverage a 200,000 piece of property and call it an expense brehs
No we actually understand how to leverage it, that’s the point. Hence why I and others have consistently said in here..buy multi family if you want to make real estate an investment because you will have monthly cash flow out of the property. If you buy residential multi family you will make money per door and not take a total loss when having to turn over a unit.
if you go multi family commercial 5+ doors you get monthly cash flow, appreciation, but with the added bonus of being able to factor any increase per door into the value of the property. The difference between your message and others in this thread is that we saying that if you ain’t cash flowing no matter if it’s pos or negative don’t say you investing.
you made up false excuses as to why an appreciating asset wasnt an investment, i refuse to read any thing else you type.
You would be laughed out of any business class in college.
R.E.N. Spells Ren
Veteran
Once again, we’re not talking about liquidity. Some investments are more liquid than others. That doesn’t mean they’re not investments. You’re making up requirements for something to be an investment. If you buy something (be it a house, artwork, a rare gem, whatever) with the intent on selling it later at a higher price it is an investment.
And your dismal look at the housing market is not backed by any real historical data. Both the housing market and the stock market have ups and downs. I already illustrated in here how investing your down payment in your home 1989 would have given a higher return 30 years later than putting it in the stock market, do you want me to bump that?
Define “own”. And $200k, even if you paid cash, is the beginning. A home never will be free of ongoing expenses, and your home is affected by a lot of factors not under your control e.g. crime, taxes, job market, infrastructure upkeep, the upkeep of neighboring homes, construction of projects that can positively or negatively affect values, weather events, quality of schools, etc.lol at folks not understanding that a home you 100% own is an appreciating asset aka an investment trying to share financial knowledge
fail to understand how to leverage a 200,000 piece of property and call it an expense brehs
Homes “can” be an investment if they are treated as such, but there are many factors that go into it that leaves it as universally a money pit. Don’t make a point to call cats out unless you out all the factors onto the table as to why single family homes are awful investments for the majority of people. Its merely a place they live that they hope will make more money than upkeep, insurance, closing costs, etc.