Why buying a home is usually a terrible investment (vs buying bitcoin).

[EluguHcman]

Well whatever you have said is at your own view but as much as I know, investing on Bitcoin and investing on real estate such as housing are considered great course to store your values against global inflations.

The exciting approach of investing on housing is that when there is economy inflation, its values appreciates and when there is economy deflation, it keeps s stable value that means housing investments curves a hedge to appreciate in values nomatter the condition of the economy and your taxes depends on your income which means when you are over taxed as a house owner, the value of your profits increases.

[SatoPrincess]

Most persons I know try to make some income from their first building. They rent the apartments and the cash flow from the property gives them the ability to DCA and buy bitcoins conveniently. Buying a house for sentimental reasons like comfort, peace and dignity should be considered only when you have acquired a certain amount of wealth to be able to afford such an expensive project. If you spend 30k USD to build a your dream house today, and someone bought bitcoin at the same time. In 10 years, who would have made more profit from their investment?  

You made a lot of sense but there is a wise saying that our elderly ones do tell us that "we shouldn't use because it's about to rain and throw away the water we have in our bowl" which means that for the fact that we are looking for an investment that we can achieve all our dreams in the future should not make us not to consider things that we can be capable of doing for ourselves now. Bitcoin investments is the best but we shouldn't deny ourselves comfort and relaxation just because of our confidence in the ability of Bitcoin investment changing our lives and status however, Bitcoin investment is promising but the question is how many people are ready to pay the price of HODLing for long term profits? of course very few as majority are after what they can achieve in the short run so let's be realistic.

 Just like you said earlier building or buying a house and use the dividends that comes from it to buy Bitcoin using the DCA is the best decision anyone can take because you have a house of your own and still making a continuous investment in Bitcoin without it affecting your other needs.

I think you misunderstood the proverb. It teaches us that you do not lose what you have because of that which you are expecting. In this context, you do not yet have a land property or bitcoin but you have the means to acquire either one of them. Personally, I would choose to buy bitcoin because I do not need a house right now. The case may be different for a man in my country, they are burdened with the responsibility of providing for their immediate and extended family. And in my culture, owning your own home indicates that you are doing well for yourself. That is why I say most people buy a home for sentimental reasons.

[fuguebtc]

This is a survey published in October 2023 and looking at the image you can easily see that the super rich and the world's leading investors are focusing largely on housing and real estate. That shows how great the potential of real estate and housing is. Meanwhile, cryptocurrency only accounts for 1% and according to you investing in bitcoin is better than real estate, does this mean you are saying that those rich people are dumber than us? Stupid people are making a lot of money while the rest of us are struggling to make a living, are you sure about this?

Maybe bitcoin is the best investment for us but certainly not the best investment in the world, so let's make a fair comparison instead of an unfair comparison. Unfair comparisons to gold or real estate won't make people invest more in bitcoin, you should stop making those comparisons.



https://www.visualcapitalist.com/visualizing-the-investments-of-the-ultra-wealthy/

[avp2306]

You made a lot of sense but there is a wise saying that our elderly ones do tell us that "we shouldn't use because it's about to rain and throw away the water we have in our bowl" which means that for the fact that we are looking for an investment that we can achieve all our dreams in the future should not make us not to consider things that we can be capable of doing for ourselves now. Bitcoin investments is the best but we shouldn't deny ourselves comfort and relaxation just because of our confidence in the ability of Bitcoin investment changing our lives and status however, Bitcoin investment is promising but the question is how many people are ready to pay the price of HODLing for long term profits? of course very few as majority are after what they can achieve in the short run so let's be realistic.

 Just like you said earlier building or buying a house and use the dividends that comes from it to buy Bitcoin using the DCA is the best decision anyone can take because you have a house of your own and still making a continuous investment in Bitcoin without it affecting your other needs.

I think you misunderstood the proverb. It teaches us that you do not lose what you have because of that which you are expecting. In this context, you do not yet have a land property or bitcoin but you have the means to acquire either one of them. Personally, I would choose to buy bitcoin because I do not need a house right now. The case may be different for a man in my country, they are burdened with the responsibility of providing for their immediate and extended family. And in my culture, owning your own home indicates that you are doing well for yourself. That is why I say most people buy a home for sentimental reasons.

So that means depend on your current needs. investors would really go on buying bitcoins since lucrative investment than buying a house. But for me if I'm capable to buy home I will start on this first. Because for me I need to secure myself first and be stable without worrying about paying rent. We can always work to gain money then use it for investment. Since if we fail I believe that we might lost everything including a chance to get a house.

Although I understand what people mean that they pay attention first on investment, but I'm afraid of other consequences especially if I'm not stable so I will go on more secure things first then work on more riskier since for sure that we will get less pressure if we bought those things that we want.

[Blitzboy]

Folks, owning a home is great, its everyone's dream, right? Still, its not usually the best financial decision. Taxes, maintenance, you name it; the expenses go up. And inflation chews at your investment. People, it's simple math here.

Bitcoin now is a different narrative. Not bound to any physical location or government, this is a digital asset. Like gold, it is rare but even more valuable as you may transmit it anyplace in the globe right away. That will define finance going forward.

People get scared because it's new, it's different. But that's where the big opportunities are. Bitcoin is leading the way; the globe is changing, technology is evolving as well. Making money is only one aspect; another is becoming a part of something greater, something that will transform the planet.

Indeed, if you want the white picket fence, definitely buy a house. But you have to be looking at Bitcoin if you wish to be ahead of the curve, if you want to participate in the future. That investment is the smartest one you could make.

[Z-tight]

Folks, owning a home is great, its everyone's dream, right? Still, its not usually the best financial decision. Taxes, maintenance, you name it; the expenses go up. And inflation chews at your investment. People, it's simple math here.

Owning a home is not a bad idea if you can afford it or if you are ready to pay off your mortgage in 15-30 years, you cannot always look at the expenses, take note that you are also getting a home that you would live in with your family, and you never have to pay for rent again. However, one should only go for a home if you know you won't default on your mortgage payments.

Bitcoin now is a different narrative. Not bound to any physical location or government, this is a digital asset. Like gold, it is rare but even more valuable as you may transmit it anyplace in the globe right away. That will define finance going forward.

BTC has its advantages, but i don't think buying BTC should stop one from dreaming or trying to have their own home, except one has decided to always pay rent all their lives, if not, at one time in life, we must consider owning our own home.

[Marvell1]

Folks, owning a home is great, its everyone's dream, right? Still, its not usually the best financial decision. Taxes, maintenance, you name it; the expenses go up. And inflation chews at your investment. People, it's simple math here.

Give me an example to prove that inflation is reducing real estate values ​​because this is the first time I've heard someone say that real estate is decreasing in value over time. An asset also has a limited supply and cannot be created more while the demand for it has never stopped because the world population is constantly increasing.

Bitcoin now is a different narrative. Not bound to any physical location or government, this is a digital asset. Like gold, it is rare but even more valuable as you may transmit it anyplace in the globe right away. That will define finance going forward.

People get scared because it's new, it's different. But that's where the big opportunities are. Bitcoin is leading the way; the globe is changing, technology is evolving as well. Making money is only one aspect; another is becoming a part of something greater, something that will transform the planet.

Indeed, if you want the white picket fence, definitely buy a house. But you have to be looking at Bitcoin if you wish to be ahead of the curve, if you want to participate in the future. That investment is the smartest one you could make.

Bitcoin really has great potential and we should not miss this rare opportunity. We invest in bitcoin these days just like our parents' generation had the opportunity to invest in gold or real estate in the past, when things were unclear and people were skeptical. It can be said that investing in bitcoin is risky but it is worth a try.

But saying that doesn't mean real estate no longer has potential, the problem with real estate is that it has become too luxurious for us. Investing in it is too expensive and not everyone has enough capital to invest in it, so we need to find an alternative and bitcoin should be the choice.

[Silberman]

Most people buy into the myth that buying a home is the best investment you can ever make...but more often than not that idea is just a myth.

Take the US as an example. The average house in N. America appreciates 5 to 6 per cent per year, which sounds great at first glance. In 10 years the value of your house will almost double.

But  most people don't take into account the interest rate where the average homeowner is paying approx. 6% annual interest on a typical 30-year fixed mortgage.
So the interest alone is wiping out the gains on your annual 6% appreciation. On top of that you are paying 1% property tax year every year, maintenance and repair costs, etc.

Making matters  worse is that for the first ten years or so most or all of your payments are applied to the interest, so you wont have any actual ownership or equity of the home,
or very little...for the first ten years. And consider that much of the appreciation of your house is simply due to inflation. So if inflation is 5% per year then that alone is undermining your actual appreciation.

I'm not saying that owning a house is a bad thing, there are certainly benefits to home ownership. It provides you with a place to live, you can borrow against it,
you can pass it down to your kids, etc. If you just want to have a place to live and call your own then owning a house may be a great idea for you, but don't think of it as some kind of
incredible financial investment because it is not as great as you may think.

I understand what you say but there are always nuances at work, since you are comparing the average rate at which a house may appreciate against bitcoin, when there are places in which real estate may have grown at a rate much higher than that, besides one of the advantages of real estate is that if you can rent your property, then you can offset some of those costs and increase your profits this way, while you also generate some cash inflow.

[el kaka22]

If you are really looking to make this into a business and not just avoid rent type of way, then you need to realize that you are not only investing into one house, you are investing into a business. So, that logic means that you are going to end up making a profit by just making the house better, otherwise if you are only buying it for buying sake and just because you have the money then that makes no sense at all.

Think about it this way, you buy a house at 150k valuation, and then put in another 50k, so you spent 200k, even if you didn't "spend" 200k, if you just paid 50k of the house and 50k for the renovations meaning spent 50% of it and the rest is loans, then the house should be worth 250k+ at least, with those renovations. That's the profit, because if you just buy and then expect anyone to buy from you for higher without doing anything else then that won't work. You need to keep on growing that too, with that profit get two more houses and work on them, then sell those and get three more, that's how you grow as a business.

[stompix]

The OP's post is full of half-truths, and therefore half-falsehoods as well. Starting with the fact that you may or may not buy Bitcoin, but you don't need it to live. On the contrary, you do need a roof to sleep under, and if you don't buy you will have to rent, and there are places where rent is worth the same as a mortgage payment. So it is better to build equity than to waste money on rent (although there are exceptions, as if you have to move very often for your job).

Nailed the thing about half-truths!
The thing is that you can't generalize this thing, the rent/mortgage situation is one in Germany and one in Romania, when I look at EU data it's like the total opposite in everything, but even so, Frankfurt vs Berlin is again different story, city center or rural area another.

Those damn things are so complicated and then we have the time frame, buying a house vs Bitcoin in 2010 is a different story from doing so in 2019, yeah 3x sounds damn good but once you factor in other costs and inflation and rise in some cases that are 50% it stops being so miraculously good, not even counting other aspects like your whole damn personal life.

Folks, owning a home is great, its everyone's dream, right? Still, its not usually the best financial decision. Taxes, maintenance, you name it; the expenses go up. And inflation chews at your investment. People, it's simple math here.

So you're telling me that housing prices have stayed the same for the last four years?
I don't know where you live but in most cases, real estate growth has beaten inflation by a huge margin.

[Dr.Bitcoin_Strange]

Well, like the first comment already highlighted, investing in landed properties like house might not be profitable in other country but in some other countries it is. In my country, there are some cities you will buy a house and before you know it, you have already realized the capital spent in buying the house and will then be taking your profit. Some people don't like to invest into Bitcoin because they don't like assets that are too volatile and some people that already invested in landed properties like house are satisfied with the profit they are getting.

[Z-tight]

Well, like the first comment already highlighted, investing in landed properties like house might not be profitable in other country but in some other countries it is.

I don't think there is any place in the world where real estate is not profitable, at least the value is going to keep going up, the only thing is the speed at which it rises. Some areas, especially in the city would rise faster and real estate will be more expensive there, but even in rural areas, the value isn't going to depreciate.

[Mr.right85]

Most people buy into the myth that buying a home is the best investment you can ever make...but more often than not that idea is just a myth.

Take the US as an example. The average house in N. America appreciates 5 to 6 per cent per year, which sounds great at first glance. In 10 years the value of your house will almost double.

Well for some that are into the real estate business, buying a home or property might count for an investment, especially when you have that at some strategic locations. Like you can say for most of the McDonalds. It didn’t just become where you get meals but, the sites they are found have some great value to it.

We are talking about homes though so yeah, in one instance, you get to not pay rent and you have a property you can resell should you see the need. Basically it’s where you just choose to lay your head but, it isn’t a wrong decision choosing between either. I don’t really consider my home for an investment, it’s where I live and that’s it.

[philipma1957]

OP, the argument you made has too many assumptions built into it, and one of them seems to be that home buyers aren't putting any sort of down payment on the houses they buy.  The standard has always been 20% (and yes I know that isn't always adhered to), and that would mean buyers have equity even before they pay that *assumed* 6% mortgage that eats up the *assumed* 6% yearly price gain.

And man, I'm tellin' ya.  There might be some legitimate reasons why you wouldn't want to own a home, but comparing the purchase of one to bitcoin investing seems ludicrous to me.  That ignores the myriad reasons why people buy houses in the first place, and it's like saying "keep renting and dealing with all of the separate problems of being a tenant and buy an extremely speculative, relatively new and notoriously volatile asset instead".  That has me slapping my head.

like I said if I rented my exact house I would have laid out 840,000 cash to pay it.

I purchased it for 150 put 100k down and took a 50k mortgage.

I paid it in 7 years. Rates were high 7 7/8% . 

I would say the house cost 150,000 the loan paid off cost me 15000 in interest.

so 165,000 add improvements 75,000 brings me to 240,000.

since I am comparing it to renting the same house.

fuel, phone, electric are a push.

renting was about 840,000 and you have nothing to show for it.

I laid out 240,000 and lets talk taxes 2300 is now 9700 so

2300+9700 = 12000/2 = 6,000 a year for 30 years.

add that to 240,000 = 420,000 if I sell at 650,000

 I am up 230,000 if I rent I am down 840,000 with nothing coming.

So I ask anyone. buy the house live there 30 years. walk away with 650,000 and you laid out 420,000.  the pile you have in you pocket is 650,000 the profit is 230,000


rent for 30 years walk away with 0 and you laid out 840,000

so same house you lived in it for 30 years.

you paid for it you walk away with 650,000 and a 230,000 profit.
you rent it you walk away with 0 and you paid 840,000

now my case above was large down payment and pay it of quickly.

so where did my wife invest in the case above.

we paid that 30 year mortgage in 7 years.

first two years we never ate at a restaurant and used that to pay the mortgage fast. so our interest cost on paying a house was only 15,000

I can tell you paying off a 7 7/8 % loan in 7 years not 30 is a way to invest that really really really works and it fucks the bank in a legal manner.

[Hamza2424]

I'm not sure of the rents there but here in Pakistan rents are from a decent home 2 bedrooms to 4 bedrooms for under $100 or a $120, and if you go a little higher it would be around 5 to 8 bedrooms and a hall etc etc $150. This is other than Gas, Electricity and Water supply utility costs.

Buying a House is never a stupid investment ever, i would say haha sell if you can to buy a House first.

Haha, TBH in my view house is not a luxury, it's a basic need of life, you need a home, i know the true value of my Own Home vs a rental Home because currently I'm on rent, even though if we make calculations to spend life rental home is not a bad investment, you paying rent every month looks more profitable compared to the Buying a house for living, I'm not sure how people process things like that in the west but here as we mostly Live in a joint family system where we stay our most of life with parents and even 90% after marriage as well we spend our life with parents and brothers, Sisters.

Home is like the hope, i know investing 100k bucks in BTC or more is worth it compared to investing such an amount into the house but rather than running for the luxuries and showing off a decent house with most of the facilities is worth investing compared to Bitcoin, my current goal is to learn and earn by different strategies and after developing a decent portfolio I will go for buying a decent house to fulfill my family needs.

[pawanjain]

I don't know about other countries but buying a house in my country is definitely a terrible idea.
Firstly, we have to pay tax on our income. Then we buy a property and start paying property tax.
Then we take a home loan and start paying EMIs for the loan.
We contruct the house by purchasing things on which we have to pay more taxes.
Once we are done with the house, if we rent it out to someone else then we have to pay taxes on the rental income as well.
At some point of we decide to sell the house then we have pay tax on that income too.
It's a trap to be honest. We should only buy a home if it's like a dream for us and otherwise we should never consider this option for invesment purpose.

Where are you from? And according to what you said, in your country no one gets rich from real estate, right? Because I don't see any benefit from owning real estate in your country. If so, then your country is probably the most special because as you can see, the rich people of the previous generation were mostly people who owned a lot of real estate.

Also, do you own a house or are you renting? I do not deny that owning a house will incur some costs that make us feel uncomfortable because I have experienced them. But I am quite certain that owning a house will be more economical and bring benefits many times compared to renting a house.

I am from India and I am currently living in a rented propperty. Yes, there is no real benefit owning real estate in current date.
Yet, there are people out there who benefit from real estate trading since they are able to crack some nice deals in real estate sector due to finding the right locations.
But other than that if we look at it from investment perspective then we can opt for alternatives.

[Dr.Osh]

if we calculate it in a short time, it does look detrimental. However, try to think about it in detail, apart from investing, you have a comfortable place to live. Apart from that, my friend has several houses that he rents out, and makes monthly and even annual profits from them. After that, take into account that after a few years, that house can be worth many times more, in fact, we can make it into a luxury house and sell it for more.
However, each form of investment has advantages and disadvantages. However, I think, investing in real estate, or houses is not a wrong thing. In fact, I think that is a very good goal after being successful in the crypto field. Apart from that, if we talk about disadvantages, Bitcoin also has disadvantages, especially for people who are impatient, or people who tend to panic. So, I think it's all a matter of compatibility in investing.

[mindrust]

I think I’d buy the home whenever I am given the chance.

I don’t know what’s going to happen to btc 10 years later but I know the home will be there making me money through tenants. (Considering no earthquake or tornado will hit it)

People buy stocks and crypto because they don’t have a reliable income anyway. They treat these assets as lottery tickets. If they could, I am pretty sure most of them would choose a house over crypto and stocks.

[nullama]

Most people buy into the myth that buying a home is the best investment you can ever make...but more often than not that idea is just a myth.

Take the US as an example. The average house in N. America appreciates 5 to 6 per cent per year, which sounds great at first glance. In 10 years the value of your house will almost double.

But  most people don't take into account the interest rate where the average homeowner is paying approx. 6% annual interest on a typical 30-year fixed mortgage.
So the interest alone is wiping out the gains on your annual 6% appreciation. On top of that you are paying 1% property tax year every year, maintenance and repair costs, etc.

Making matters  worse is that for the first ten years or so most or all of your payments are applied to the interest, so you wont have any actual ownership or equity of the home,
or very little...for the first ten years. And consider that much of the appreciation of your house is simply due to inflation. So if inflation is 5% per year then that alone is undermining your actual appreciation.

I'm not saying that owning a house is a bad thing, there are certainly benefits to home ownership. It provides you with a place to live, you can borrow against it,
you can pass it down to your kids, etc. If you just want to have a place to live and call your own then owning a house may be a great idea for you, but don't think of it as some kind of
incredible financial investment because it is not as great as you may think.

The thing with housing is that is a special kind of asset. You need to live somewhere, and if you keep renting forever, you will probably have a hard time retiring.

Fiat money decreases its purchasing power over time of course, so that means that if you buy a home, you freeze the price of that asset at that point in time, so it gets cheaper and cheaper over time for you. Compared to that, if you keep renting, rent will continue to go up over time, because money is devalued.

So, in a way, buying one home seems to be a smart investment.

Whatever you do after that is open to personal preferences, Bitcoin, real estate, gold, etc.

[libert19]

I consider crypto to be very fragile investment, one moment you could be millionaire and next moment your wallet gets wiped out cause your seed phrase was somehow compromised, so I consider diversifying into real estate deffo a wise choice.