Comments on: Is Home Ownership An Investment? http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/ A Vancouverite's journey to financial freedom. Fri, 05 Sep 2008 21:43:05 +0000 http://wordpress.org/?v=2.1.2 By: traineeinvestor http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1108 traineeinvestor Sat, 23 Feb 2008 09:12:56 +0000 http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1108 For most people their home (if they own one at all) will be their most valuable asset. As such it would, in my view, be a mistake not to treat it as an investment and to assess the merits of owning or not owning on that basis. At times it will make a lot of sense to buy your own home. At other times it will not. You cite some good examples of people how have done very well choosing to rent rather than to buy. Others (myself included) have done very well by chosing to buy rather than to rent. A lot depends on market conditions and expectations at the time the decision is made. For most people their home (if they own one at all) will be their most valuable asset. As such it would, in my view, be a mistake not to treat it as an investment and to assess the merits of owning or not owning on that basis. At times it will make a lot of sense to buy your own home. At other times it will not. You cite some good examples of people how have done very well choosing to rent rather than to buy. Others (myself included) have done very well by chosing to buy rather than to rent. A lot depends on market conditions and expectations at the time the decision is made.

]]> By: Stock Market » Is Home Ownership An Investment? http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1109 Stock Market » Is Home Ownership An Investment? Sat, 23 Feb 2008 09:56:41 +0000 http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1109 [...] Financial Jungle wrote an interesting post today on Is Home Ownership An Investment?Here’s a quick excerpt This has been a hot topic among bloggers, so I’ll throw in my 2-cents. Every asset you own can be classified into 3 broad categories: necessities, luxuries and investments. Examples include: Necessities: electricity, gasoline, food, water, clothing, banking, medicine and *shelters*. Luxuries: Tag Heuer watches, iPods, Coach bags, Ferraris and sailboats. Investments: stocks, bonds and rental properties. No. That’s not a typo. I did place “shelter” as one of the necessities, but I bel [...] […] Financial Jungle wrote an interesting post today on Is Home Ownership An Investment?Here’s a quick excerpt This has been a hot topic among bloggers, so I’ll throw in my 2-cents. Every asset you own can be classified into 3 broad categories: necessities, luxuries and investments. Examples include: Necessities: electricity, gasoline, food, water, clothing, banking, medicine and *shelters*. Luxuries: Tag Heuer watches, iPods, Coach bags, Ferraris and sailboats. Investments: stocks, bonds and rental properties. No. That’s not a typo. I did place “shelter” as one of the necessities, but I bel […]

]]> By: Four Pillars http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1110 Four Pillars Sat, 23 Feb 2008 13:12:15 +0000 http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1110 Although I've done extremely well with home ownership in the past - all I can say is that owning a house is a pain in the butt. Mike Although I’ve done extremely well with home ownership in the past - all I can say is that owning a house is a pain in the butt.

Mike

]]> By: squawkfox http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1111 squawkfox Sat, 23 Feb 2008 15:48:59 +0000 http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1111 People who believe being in massive debt to the bank for the sake of "home ownership" or as an "investment" I think have been misguided. Sorry. I have rented for many years and have a lovely 6-figure portfolio to show for it. None of my equity is tied to one single RISKY investment (a house). Many of my friends are home owners and constantly tell me I am the misguided one. Albeit, I'm not the one plowing good "investment" money into a new kitchen, or fixing the furnace. Besides, the amount of money my friends spend each month on interest payments and condo fees WELL EXCEEDS how much I pay in rent. Looking at how much equity these "homeowners" have in their house is laughable as my diversified portfolio well exceeds their debt investment. The hard thing is talking to people out of "home ownership" as they are very wed to the idea of "owning" a house. It's an emotional debt which many cannot get past thinking of as perhaps a bad debt. People who believe being in massive debt to the bank for the sake of “home ownership” or as an “investment” I think have been misguided. Sorry. I have rented for many years and have a lovely 6-figure portfolio to show for it. None of my equity is tied to one single RISKY investment (a house). Many of my friends are home owners and constantly tell me I am the misguided one. Albeit, I’m not the one plowing good “investment” money into a new kitchen, or fixing the furnace. Besides, the amount of money my friends spend each month on interest payments and condo fees WELL EXCEEDS how much I pay in rent. Looking at how much equity these “homeowners” have in their house is laughable as my diversified portfolio well exceeds their debt investment. The hard thing is talking to people out of “home ownership” as they are very wed to the idea of “owning” a house. It’s an emotional debt which many cannot get past thinking of as perhaps a bad debt.

]]> By: Saturday Roundup - Feb 23rd, 2008 - Tag! No Tagbacks! edition | Credit Withdrawal - Helping You Kick the Credit Habit http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1112 Saturday Roundup - Feb 23rd, 2008 - Tag! No Tagbacks! edition | Credit Withdrawal - Helping You Kick the Credit Habit Sat, 23 Feb 2008 17:17:51 +0000 http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1112 [...] Financial Jungle Is Home Ownership An Investment? [...] […] Financial Jungle Is Home Ownership An Investment? […]

]]> By: Dividends4Life http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1114 Dividends4Life Sun, 24 Feb 2008 03:27:31 +0000 http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1114 I see home ownership similar to hole life insurance. It is technically an investment since you will likely recoup something above your initial cost, but it it (at least in my case) will be well below what I could have earned in the market. For the record, I am a homeowner. When I mention this to my wife I get "the look". I do run IRRs on my past and current home. I live in the south (U.S.) where you can get a lot of house for the money (upside) but appreciation is relatively small, 2-4% per year. Best Wishes, D4L I see home ownership similar to hole life insurance. It is technically an investment since you will likely recoup something above your initial cost, but it it (at least in my case) will be well below what I could have earned in the market.

For the record, I am a homeowner. When I mention this to my wife I get “the look”. I do run IRRs on my past and current home.

I live in the south (U.S.) where you can get a lot of house for the money (upside) but appreciation is relatively small, 2-4% per year.

Best Wishes,
D4L

]]> By: Julie http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1115 Julie Sun, 24 Feb 2008 03:54:57 +0000 http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1115 I bought a house because that's what I wanted. A place of my own. It wasn't bought as an investment (although I also wanted it to have characteristics that would appeal to a broad segment of the market should/when I sell later). Like I have a car that many would consider "wasteful" in terms of its cost. As I love cars, it really doesn't bother me because I enjoy it immensely everyday. It's difficult to "calculate" the amount of enjoyment you get out of things you really like. I agree that jumping on the bandwagon of thinking that the home ownership is always smarter financially is dumb. Enjoy your blog - it's great! Thanks. I bought a house because that’s what I wanted. A place of my own. It wasn’t bought as an investment (although I also wanted it to have characteristics that would appeal to a broad segment of the market should/when I sell later).

Like I have a car that many would consider “wasteful” in terms of its cost. As I love cars, it really doesn’t bother me because I enjoy it immensely everyday.

It’s difficult to “calculate” the amount of enjoyment you get out of things you really like.

I agree that jumping on the bandwagon of thinking that the home ownership is always smarter financially is dumb.

Enjoy your blog - it’s great! Thanks.

]]> By: Financial Jungle Guy http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1116 Financial Jungle Guy Sun, 24 Feb 2008 08:46:23 +0000 http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1116 Glad to see new names popping up over the past few weeks. (Traineeinvestor, Julie, Johnny, Seminar John, mohican, virtualcreditcard, Lin Ennis, Glen, Mortgage Claims, Guerilla Investor, ETF Income, and Transcanada.) Hope to read more of your feedbacks. Glad to see new names popping up over the past few weeks. (Traineeinvestor, Julie, Johnny, Seminar John, mohican, virtualcreditcard, Lin Ennis, Glen, Mortgage Claims, Guerilla Investor, ETF Income, and Transcanada.)

Hope to read more of your feedbacks.

]]> By: Brian http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1117 Brian Mon, 25 Feb 2008 05:10:46 +0000 http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1117 Once you understand cashflow then you can understand why home ownership isn't an investment. Once you understand cashflow then you can understand why home ownership isn’t an investment.

]]> By: Financial Jungle Guy http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1118 Financial Jungle Guy Mon, 25 Feb 2008 05:34:49 +0000 http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1118 A fully paid home improves cashflow (i.e. no rents to pay). Doesn't that make it an investment? A fully paid home improves cashflow (i.e. no rents to pay). Doesn’t that make it an investment?

]]> By: Ryan http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1119 Ryan Mon, 25 Feb 2008 13:16:23 +0000 http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1119 Good Post FJ. Keep up the good work. Good Post FJ. Keep up the good work.

]]> By: Canadian Capitalist http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1120 Canadian Capitalist Mon, 25 Feb 2008 15:35:42 +0000 http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1120 As investments go, a home is a pretty lousy investment. A home has a voracious appetite for cash and upkeep. Still, home ownership works because most people are not disciplined enough while renting to save the difference and invest it responsibly in higher growth assets. They just consider the extra cash as disposable income and spend it. When they own, they are forced to make the mortgage payments and build a small amount of equity every month. As investments go, a home is a pretty lousy investment. A home has a voracious appetite for cash and upkeep. Still, home ownership works because most people are not disciplined enough while renting to save the difference and invest it responsibly in higher growth assets. They just consider the extra cash as disposable income and spend it. When they own, they are forced to make the mortgage payments and build a small amount of equity every month.

]]> By: nobleea http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1121 nobleea Mon, 25 Feb 2008 15:41:55 +0000 http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1121 Good post, a very technical look at an emotional topic. But why not take a very technical look at another emotional topic: Marriage. If you take emotion out of it, then you'd want a spouse who made a lot of money and was good around the house and with kids. Good looking and funny? Those are luxuries! Or how about kids? If you look at the numbers, kids are a pretty bad investment (financially at least). And they're certainly not essential (for you individually at least, for the race as a whole, that's a different story). They must be luxuries. I agree that a house is not an investment. Some people spin it as that since it's the only 'investment' that they have. Some people get 'pleasure equity' out of their house. And their car and tvs. Some get more out of these things than others. And some don't get enough out to justify the expense. Good post, a very technical look at an emotional topic.

But why not take a very technical look at another emotional topic: Marriage. If you take emotion out of it, then you’d want a spouse who made a lot of money and was good around the house and with kids. Good looking and funny? Those are luxuries!

Or how about kids? If you look at the numbers, kids are a pretty bad investment (financially at least). And they’re certainly not essential (for you individually at least, for the race as a whole, that’s a different story). They must be luxuries.

I agree that a house is not an investment. Some people spin it as that since it’s the only ‘investment’ that they have.

Some people get ‘pleasure equity’ out of their house. And their car and tvs. Some get more out of these things than others. And some don’t get enough out to justify the expense.

]]> By: ahmed http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1122 ahmed Mon, 25 Feb 2008 15:43:58 +0000 http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1122 My wife and I bought a duplex; we live upstairs and rent the downstairs. The rent helps pay for our mortgage and part of the expenses (including some mortgage interest) are tax deductible. When we move out, we'll rent both parts of the house. I definitely consider my home an investment. My wife and I bought a duplex; we live upstairs and rent the downstairs. The rent helps pay for our mortgage and part of the expenses (including some mortgage interest) are tax deductible.

When we move out, we’ll rent both parts of the house.

I definitely consider my home an investment.

]]> By: Financial Jungle Guy http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1123 Financial Jungle Guy Mon, 25 Feb 2008 17:06:20 +0000 http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1123 Canadian Capitalist - Well said. The best investment is one that fits well with the individual's psychology. The math comes in as secondary. nobleea - Like a home, I do believe a wife is part investment and part luxury. Well, that's unless your name is James H. Marshall. In that case you can marry someone like Anna Nicole Smith for no financial rewards. Home ownership, to most people, is partially an investment. Whether it's a good one or not depends on the price paid. I still remember there were times when financing a home was cheaper than renting it. Canadian Capitalist - Well said. The best investment is one that fits well with the individual’s psychology. The math comes in as secondary.

nobleea - Like a home, I do believe a wife is part investment and part luxury. Well, that’s unless your name is James H. Marshall. In that case you can marry someone like Anna Nicole Smith for no financial rewards.

Home ownership, to most people, is partially an investment. Whether it’s a good one or not depends on the price paid. I still remember there were times when financing a home was cheaper than renting it.

]]> By: Cheap Canuck http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1124 Cheap Canuck Mon, 25 Feb 2008 18:31:33 +0000 http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1124 In my opinion, whether or not it can be considered an investment is contingent upon the owner's end game. If you get a smokin' deal on a run down house in a great neighborhood in a major Canadian city, can do your own repairs and renovations, and plan to live in it for 20 years then sell and move to Nicaragua, you can probably consider it an investment. If you buy a brand new house at the top of the market, and intend to live in until you die, then it can only be considered a liability. In my opinion, whether or not it can be considered an investment is contingent upon the owner’s end game. If you get a smokin’ deal on a run down house in a great neighborhood in a major Canadian city, can do your own repairs and renovations, and plan to live in it for 20 years then sell and move to Nicaragua, you can probably consider it an investment. If you buy a brand new house at the top of the market, and intend to live in until you die, then it can only be considered a liability.

]]> By: dropby http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1125 dropby Tue, 26 Feb 2008 04:03:31 +0000 http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1125 OT.Bpt is halt trading today. What does it mean? Is this a very bad news? OT.Bpt is halt trading today. What does it mean? Is this a very bad news?

]]> By: dropby http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1126 dropby Tue, 26 Feb 2008 04:05:52 +0000 http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1126 Sorry for the typo. I mean BPF Boston Pizza income fund. Sorry for the typo. I mean BPF Boston Pizza income fund.

]]> By: Financial Jungle Guy http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1127 Financial Jungle Guy Tue, 26 Feb 2008 04:17:23 +0000 http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1127 This sounds troublesome since it wasn't put in place to stop an uncontrolled selloff. Hopefully will find out more tomorrow. This sounds troublesome since it wasn’t put in place to stop an uncontrolled selloff. Hopefully will find out more tomorrow.

]]> By: dropby http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1129 dropby Tue, 26 Feb 2008 20:06:59 +0000 http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1129 Still cannot find why trading was halted yesterday for BPF. Anyway, what do you think about PDM and KEG, FJ? Still cannot find why trading was halted yesterday for BPF.

Anyway, what do you think about PDM and KEG, FJ?

]]> By: Is Home Ownership An Investment? | Financial Solution News http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1137 Is Home Ownership An Investment? | Financial Solution News Wed, 27 Feb 2008 16:10:18 +0000 http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1137 [...] post by Financial Jungle Guy Related Posts: Stocks, Bonds, & Mutual [...] […] post by Financial Jungle Guy Related Posts: Stocks, Bonds, & Mutual […]

]]> By: Financial Jungle Guy http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1143 Financial Jungle Guy Thu, 28 Feb 2008 07:14:16 +0000 http://financialjungle.com/2008/02/23/general/is-home-ownership-an-investment/#comment-1143 dropby - haven't done much work on these 2 trusts. At a glance, KEG has good potential. Maybe you can research it and share your opinion with us. ;) dropby - haven’t done much work on these 2 trusts. At a glance, KEG has good potential. Maybe you can research it and share your opinion with us. ;)

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