Is owning a home a liability or an asset?

No one is going to believe me but whatever, I'll chime in. For me, it's a liability. We bought a $3mm apartment in cash in NYC to support our growing family. Beautiful apartment, great location, good schools, blah blah blah.

With all of that said, when we bought it, I did not exactly foresee the AI tidal wave that is likely coming for almost all white-collar jobs. If I did foresee it, I would have either gotten a mortgage -- a ReFi is possible, to be clear -- or I would have otherwise pushed back to having such a huge chunk of out net worth in what is a largely illiquid asset, even in NYC's housing market.

We're not exactly cash-poor -- my job makes it more than comfortable and we've got a sizable enough liquid asset pool to make moves if we need it -- but I do wish we had a little bit more flexibility and I feel like the speed that AI is taking over is concerning.

M66 here. So many variables but the biggest is whether you plan to stay in it long term or not. It truly is a toss-up if you move regularly. It’s an asset for me. I paid it off 9 years ago. I’ve done the math and even though I still have real-estate taxes, insurance, and upkeep, it is putting money in my pocket. When I was younger and advancing my career, it was not worth it.

for me, a liability

Both

Liability if you owe more than it is worth

Asset if it is worth more than what remains on the mortgage plus other costs associated with selling. It is also an extremely non-liquid asset, outside of Helocs, etc

Also I kind of look at it as a hedge against rental costs - my mortgage is $2000 if half of that is interest ($1000) the other half is money on the principle on the loan ($1000). So if the price stays the same, it is just money being paid to myself. So my rent is basically $1000 a month vs $1800 or whatever for a similar sized home in my area.

I would not necessarily argue that a house is always an asset. When you go to sell, often people are expecting turn-key which means having to remodel, therefore you have to dump 100k for a bathroom and 150k for a new kitchen which you won't get back in the final sale. Not to mention maintenance costs, including new roofs, HVAC, systems, landscaping, painting, etc. Investing your initial down payment, and all of this theoretical home improvement money and instead renting might be the better financial decision in the long run.

It would be a good investment if you could assess, buy your home based on Oil Barrels, Gold, Silver, BTC, ETH. As it stands USD, EUR, CNY, GBP have balloned to 20x to 25x times by the Japanese Yen Carry Trade.

FWIW, even though my house value is quite a bit higher than what I still owe on it, I don't include it in my net worth calculations. Part of that is due to the imprecise price estimate on the asset, and with the unknowns in future upkeep costs.

Each of those are inflated 20 to 30 times by the Carry Trade bubble. So beware.

where did you get a house for such a nice price?

I'm only a renter, but the only way I could see owning a home being a liability is if prices plummet and you end up owing more on the house than it is worth on the market. Once a home is paid off the only costs are going to be property taxes, maintenance and improvements.

Owning a home is always both, the question is how things balance out.

When you first buy a house, presumably by taking out a mortgage, it is probably a net liability. If you keep paying your mortgage, over time, the house will probably become a net asset. But that would all depend on your specific circumstances, market changes, tax considerations, etc.

Some people are confusing "asset" with "good investment." Lots of assets are bad investments. My target stock has depreciated by 30% since I bought it five years ago. But it is a financial asset until/unless the company goes bankrupt. Your house is technically an asset until you would net zero dollars or less on a sale.

It's a liability unless you're renting it. In most cases, people are paying the vast majority of their mortgage to cover the interest, and very little is going to the principal. In many cases, the monthly interest is greater than the cost it would be to rent a comparable unit. When you factor in insurance, HOA (if you have it), upkeep costs, and also the fee you have to pay to sell that asset to a realtor, it becomes a bad investment IMO. In most cases, if they put the down payment into the S+P, and rent for 5 years, it's a far better investment. IMO.

I bought my place in 2002 for $189K. According to zillow and redfin it's worth right at $700K. That seems to be about right considering what other properties have gone for in my neighborhood recently. Maybe they are correct maybe they aren't but I'm ok with that. Oh, and I paid off my place three years ago. All I pay now are taxes and insurance. A lot cheaper than paying rent or a mortgage.

Another way to look at it is to ask whether, all things considered, over the course of 30-40 years, one would have paid more money if one rent or bought (the same place)

You can’t be serious, mate. In this day and age, owning anything is a liability.

you're on the wrong forum.

the NYC socialist/mayor appointed a housing czar who claims home ownership is white supremacy and has vowed to seize property and then have the socialist govt own and distribute it

it you buy a house/home you will get your money back , or more, if you sell; when you pay rent, you get nothing back for all your yrs of paying rent