A house seems like a horrible investment

Ever heard of air b And b?

Compared to rent, no.

You over estimate carrying costs and maintenance for most people.

weeeeee wrote:

You over estimate carrying costs and maintenance for most people.

I'm saying that maintenance is part of the carrying cost. The rule is that's ~1% of the value. That doesn't include additions/remodels that people decide to put on their house, that often cost more than the value they add.

Twenty years ago I bought my house for 119,000. Today it is worth 800,000. Horrible investment

Earth to Jamin:

1. A girlfriend is a horrible investment.

2. A wife is a horrible investment.

3. A house is a horrible investment.

You jumped to #3 after bigly failing #1.

whateverdude11 wrote:

Twenty years ago I bought my house for 119,000. Today it is worth 800,000. Horrible investment

* The amount of money you put into taxes and maintenance was about $(800,000 + 119,000)/2*0.04*20=$367,660, likely more

* If you sell it, you will have to pay about 6% of its value, or $48,000, in various closing costs

* Your capital gain is therefore $265,000 or just over a 100% return in 20 years

* If you invested that $119,000 in the stock market you would have $1,147,908. That's with $0 carrying cost, sales cost, etc., so your return would be 864%. Now it's true that you would have paid rent for those 20 years, but the cost of renting your house probably would add up to only $200,000. That leaves you with $1,147,908-$200,000=$947,908 or a 696% return.

Land o' Jamin wrote:

Earth to Jamin:

1. A girlfriend is a horrible investment.

2. A wife is a horrible investment.

3. A house is a horrible investment.

You jumped to #3 after bigly failing #1.

With a wife there is a 50% chance that you lose 50% of your assets.

So your average return is -25%.

hyperinflation made houses a great investment for previous generations. Our generation will barely make anything on houses, save for those who happen to get in areas that become desirable later.

Hi Jamin! Hope you have a Merry Christmas!

You have to live somewhere. So in that regard a decent sized house can be a good "investment". But it's not much of an investment since you HAVE to live somewhere. (Unless you live under a bridge).

Of course the overall mantra: "A house is a great investment" is BS created my RE sharks who want you to sucker into the next house.

Buy one in Ukraine and they'll throw in a hot babe with it too.

https://galynatate.files.wordpress.com/2012/10/img_4135.jpg

https://galynatate.wordpress.com/

jamin wrote:

weeeeee wrote:

You over estimate carrying costs and maintenance for most people.

I'm saying that maintenance is part of the carrying cost. The rule is that's ~1% of the value. That doesn't include additions/remodels that people decide to put on their house, that often cost more than the value they add.

The average American isn’t paying 4% a year.

This one's available and has a nice house too:

http://www.forumdaily.com/en/ukrainka-kupivshaya-v-ssha-osobnyak-za-18-mln-otkrestilas-ot-muzha-milliardera/

Three for the price of one here standing outside the nice looking house that comes with them:

https://www.videoblocks.com/video/portrait-three-generations-of-ukrainian-women-wind-develops-hair-one-woman-holds-jug-rfqv9dskzj2dhk4od

You should be comparing mortgage payments (which are an investment) to rent (not an investment).

You're looking at it the wrong way.

Gordon Gekko wrote:

You have to live somewhere. So in that regard a decent sized house can be a good "investment". But it's not much of an investment since you HAVE to live somewhere. (Unless you live under a bridge).

Of course the overall mantra: "A house is a great investment" is BS created my RE sharks who want you to sucker into the next house.

This is correct. Given that you have to live somewhere, buying a house is usually better than renting. That said, a house is a place to live first, and an "investment" second. The "great investment" and "American dream" stuff is a lie concocted by the real estate industry.

I pay 618 a month for the mortgage, taxes, and inaurance on my 3 bedroom, 1400 square foot house on half an acre in a great school district that's 6 mins from the interstate and 20 mins from downtown.

What would the comparable rent get me?

weeeeee wrote:

You over estimate carrying costs and maintenance for most people.

Annual maintenance cost of closer to 3% is correct. $300,000, $9000 maintenance is about right. Not $9000 every year, but that's about average.