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

[Zoomic]

Investing in a house or houses as the case may be will be more profitable in the short run. In the longrun, the house will be subject depreciation and will definitely need constant renovation and maintenance to at least attract tenants. In most cases, the structure of the house becomes old fashioned which may not match the taste of some people who prefer luxurious apartments. The returns a house with an outdated structure would generate will never be compared to what a modern house would generate.

Instead of bothering so much about taxes, depreciation, maintenance bills and low returns as a result of the introduction of modern structures, I would rather choose to invest in bitcoins, hodl them for long and accumulate good returns without stress. Bitcoin is more an investment for the future than buying a house.

[SatoPrincess]

I think the argument of whether buying a home is a good investment or not depends entirely on your location. I read Robert Kiyosaki’s Rich Dad Poor Dad and in that book he gave some good reasons why he believes buying a home in the US is not an investment but a liability. His reasons are pretty much the same as the OP.

However that is not the case in my country, Nigeria. Buying a house in Nigeria is a good investment. The value of the land appreciates annually and there is little or no taxes unlike in the US. The most expenses you can have is on renovations and that can be easily covered by the rent.

[dunfida]

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.

Buying a house would really be turning out to be an investment or become an asset on the moment that it would really be generating out some income or also it would really be something that becomes
its value to be having that appreciation overtime but we do all know that not all the time this could really happen. Having a house isnt always that pertains about being an investment or whatsoever because
nothing beats out if you do really live into your own house on which you do know that it is yours and there's no one could be able to take it from out. If you've been thinking about having Bitcoin investment
then why would not be making your own house and having another side budget for investing in Bitcoin? It wont really be needing up for you to make things complicated if you could really be able to actually
do both.

Somehow there would really be those instances on which you would really be needing up to choose on which one would really be something worth. If you do find out that buying Bitcoin is much more worth
than on building your own house then go for it. You are the ones who would really be making up your own future when it comes into this aspect. You cant really just that make yourself
be that letting others do make out to dictate on the decisions you would really be making. Just make it sure that you are aware on the risks involved on every steps that you would really be making.

[EarnOnVictor]

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.
-snip-

The first two paragraphs I read from your post are enough to discourage me from reading the rest. How can someone say that house investment success is a myth, I can't just reason that. A house is an asset and will always be and be appreciated by most, if not all. Using an ugly incident to generally judge an entire house investment plan to favour Bitcoin is biased. Are you telling me that it is every time Bitcoin appreciates, Bitcoin could disappoint some people with over 4 times devaluation, so what have you proven?

You only cited the bad experience about the house (provided it was not just formulated by you), what about those who bought their lands or built their houses at a location that later delivered to them more than 20 times the amount it was purchased in a few years simply because the place later became a hot cake? This would happen if industries, institutions, factories, and huge facilities were later located in those places to make it an important hub.

What about those people that big banks and companies bought their lands/houses and gained more than 50 times the amount they bought it? Let's stop believing that Bitcoin is the only way out, no one has been to the next 10 years future of Bitcoin, what if it disappoints? A physical structure/asset like a house will always be more reliable than Bitcoin.

[EarnOnVictor]

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.
-snip-

The first two paragraphs I read from your post are enough to discourage me from reading the rest. How can someone say that house investment success is a myth, I can't just reason that. A house is an asset and will always be and be appreciated by most, if not all. Using an ugly incident to generally judge an entire house investment plan to favour Bitcoin is biased. Are you telling me that it is every time Bitcoin appreciates, Bitcoin could disappoint some people with over 4 times devaluation, so what have you proven?

You only cited the bad experience about the house (provided it was not just formulated by you), what about those who bought their lands or built their houses at a location that later delivered to them more than 20 times the amount it was purchased in a few years simply because the place later became a hot cake? This would happen if industries, institutions, factories, and huge facilities were later located in those places to make it an important hub.

What about those people that big banks and companies bought their lands/houses and gained more than 50 times the amount they bought it? Let's stop believing that Bitcoin is the only way out, no one has been to the next 10 years future of Bitcoin, what if it disappoints? A physical structure/asset like a house will always be more reliable than Bitcoin.

[tabas]

I am a fan of real estate and owning a house isn't really for everyone to be said as a good investment. If you are going to rent out your house, it is really a passive income that will make you pay your mortgage on top of the appreciation that you'll get there yearly. It's different per country where someone's living. In most urban city areas, it's obvious that the cost of a house terribly skyrocketed and it will continue to go up. But just like the market, it won't be going up forever and there will be a lot of unoccupied houses and developers and governments have to drop it down so that it won't be a waste of resources for them. If someone treats real estate as a terrible investment, that's okay. We've got our very own ways of appreciating investments like in Bitcoin and real estate that can turn into a passive income through Airbnb, renting, etc. Not everyone is privilege to own a house, and there are people that can afford to buy it in cash which is better to avoid further inflation rates and other surcharges.

[serjent05]

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.

Hmm... you don't buy a house just to stand it idle are you?  If you do then you are missing out on a huge profit.  If we buy a house and rent it out, we can get a good source of funds since the price for renting increases around 10% yearly in my country.

Since we are thinking of buying properties for investment, it is given that we must take full advantage of the option of earning on such assets renting the place out is the next step on that kind of investment.  It may not be as profitable as buying Bitcoin in the past 10 years but I believe buying properties and renting them out is one of the most profitable investments out there.

[Stalker22]

Owning a house? For some folks its the ultimate dream - the biggest investment they will ever make.  But I gotta say, that isnt always true and  dont get me wrong, owning your own place has its perks.  But it can also turn into a bit of a money pit before you know it. 

You buy a house and suddenly youre stuck in one place, chained to a 30-year mortgage like a ball and chain.  All those monthly payments youre making dont really add to your net worth neither.  Youre just paying yourself rent.  And while sure your house might gain some value over time, you gotta account for all them new roofs, property taxes, leaky pipes and whatnot that come with being a homeowner.  Take those costs into account and your precious investment probably isnt making you much money at all.

Heck if the housing bubble bursts again, you might end up owing more on your house than what its even worth.  That definitely isnt wealth building in my book.

[DiMarxist]

Owning a house might not be a good idea in the US, but it is lucrative in other countries. I know that there are countries where the price of houses appreciated more than 5%-6%. In my country, houses' value can appreciate 100% in five years depending on the location. If you live in an area experiencing a population explosion and increased tourism, you might understand my view.

There was an anti-tourism protest in Malaga, Spain because the the price of rent increased by 16.5% in a single year. House owners in such locations will be making good profits. There are also some countries where the government doesn't charge as high as 1% yearly property tax. In some countries, property tax doesn't even exist. Bitcoin is a good investment, however, diversifying your investment to the property business is not also a bad idea.

I agree with you with everything you said. But people are still buying houses in US. Like all these third world countries leaders. They would steal their region money and buy house at US and other parts.
And for the property tax, it is it not working in the third world Nations and only works in the Advance countries.

[Questat]

I think the argument of whether buying a home is a good investment or not depends entirely on your location. I read Robert Kiyosaki’s Rich Dad Poor Dad and in that book he gave some good reasons why he believes buying a home in the US is not an investment but a liability. His reasons are pretty much the same as the OP.

However that is not the case in my country, Nigeria. Buying a house in Nigeria is a good investment. The value of the land appreciates annually and there is little or no taxes unlike in the US. The most expenses you can have is on renovations and that can be easily covered by the rent.

Well, location will always be a great factor once you decide to buy a house. But if you only buy a house for the purpose of you can call something on your own and you don't make profits from it, I don't think it can still be a good investment. However, if you buy a house and use it as a business like renting it out, that could actually bring you decent profits monthly, so it's certainly a good investment.

[albon]

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.

Well, if you diversify your investments, this is also a good thing. You can divide your capital in Bitcoin and in buying a piece of land or owning a property in the real world, or starting a business. The benefits of these investments may differ according to each person’s circumstances, the country in which he resides, and his capital. Also, having real-world investments alongside your job can be good for generating monthly returns that you can use to increase your Bitcoin holdings. Do not forget that Bitcoin is a volatile asset and witnesses periods of stagnation based on market sentiment. If you are a long-term investor, you should take advantage of every dip in the market, as these opportunities should not be missed.

As for me, I prefer to invest in Bitcoin because I have always believed in its technology and its great profitable potential, but this does not prevent the fact that financial management must be taken into account to help reduce risks. Also, owning one of the investments in the real world can benefit the Bitcoin investor as it will help him secure his livelihood and the success of his long-term plan.

[Davidvictorson]

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 think I I agree with you. While owning an apartment isn't a bad thing in itself however if you are building to make profit then go for real estate that is build and sell rather than building to take rent off of it because it would be a very long time before you get back whatever amount you put into it this is the knowledge from real estate developers. Aside this owning a house for itself is not a wise financial decision unless you are looking to make any money from it.

[red4slash]

I don't know how life is in the US because although there is a lot of news about the US with all forms of luxury and other favorable factors but when we have never visited there and felt how business there then indeed we cannot comment much except that maybe for real estate investment there it is not very profitable but that cannot be used as a benchmark in other countries.
The potential of building investment cannot be pegged to just one country because it could be that when it cannot run well in one country it will run rapidly in another country including for my country at this time.

Even if you look at the comparison from year to year, investment with land and buildings in my country is currently increasing rapidly in terms of price especially with the current conditions where industrial plants are starting to penetrate so that business for land and buildings is a good progress in my country even though bitcoin is currently starting to be popular in some circles but for real estate there are still very many who do it because even though it takes time and management about it but indeed the progress is still quite good and the benefits are comparable to what they did before.

[justdimin]

I don't think owning a house is a bad investment. Paying house rent is one of the most expensive things people struggle for, and everyone are complaining how expensive the rent for apartments is. For people who can afford to get a house as property it is not a bad idea for them because no matter how expensive a house is their are people who can still afford it. Rents always increase with time even if the standard of the house is losing value. I don't see this investment to be a bad one when it comes to physical investment. Having bitcoin as investment this is another investment I'd like to go into. It is a lifetime investment even if you no longer exist in this world it will still bring profit for your as far as the building still stand strong.

That is one of the best investments that you could make without actually making an income from it. Normally in most cases if you make an investment you hope for an income from it, with a house you are not going to make a profit from it, even if your house gets 100x value after you buy it, you are going to be living in it, so you can't sell it and if you do that's real estate investment and that can be good or bad, but if we are strictly talking about your own house that you live in, you will not make any income from it at all.

What it gives you instead is a way to not spend more money on it, of course there is HOA or repairs and all that which means that we are not going to get anything out of this, it doesn't mean that we are going to avoid spending anything, but it also means that we are going to have some issues about it one way or another without making any money. It's still the best investment anyone can make, because it gives you a way out of paying rent.

[NotATether]

If you buy the house or property in full and you do not use any sort of mortgage to finance the deal, then all you have to do is wait for a few months or years and then you can flip the house for some profit to another investor.

Therefore, it is quite ridiculous to suggest that buying a house is a terrible investment. Real estate is one of the most profitable markets out there. Not as much as Bitcoin obviously, but many people have gotten wealthy off of doing this.

[legendbtc]

Investing in a house or houses as the case may be will be more profitable in the short run. In the longrun, the house will be subject depreciation and will definitely need constant renovation and maintenance to at least attract tenants. In most cases, the structure of the house becomes old fashioned which may not match the taste of some people who prefer luxurious apartments. The returns a house with an outdated structure would generate will never be compared to what a modern house would generate.

Owning a home means you also own real estate, and it also means you can both generate passive income by renting out your home and own an asset that appreciates over time. In case, if you don't want to rent it to someone else anymore, you can still sell the property at a very high price because real estate always increases over time because the demand for it will never stop increasing. Real estate is the only asset that has the ability to generate compound returns like no other asset can.

Instead of bothering so much about taxes, depreciation, maintenance bills and low returns as a result of the introduction of modern structures, I would rather choose to invest in bitcoins, hodl them for long and accumulate good returns without stress. Bitcoin is more an investment for the future than buying a house.

If you are a good, law-abiding citizen and want to help build your country then you also need to pay taxes even if you invest in bitcoin, unless you are evading taxes.
Anyone who has ever owned real estate and generated passive income from it will understand how great it is to own real estate.

[Smack That Ace]

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.

[Mame89]

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.

It might not be a great investment in the US but it is a great investment in other counties. In my country, land appreciate very much when development comes to the environment that the land is located therefore when you own a home there, the value of your land and your house appreciates. House ownership is a great investment and if you have the money you should do it. You can own a house and still buy Bitcoin therefore you should not do one and leave the other one. Owning your own home give you long term investment because everything that you do to improve your house, stays that way forever until you are ready to move from the house to a bigger one or a different location but doing those modifications to rented apartments gives value to the house owner and not yourself.

Yes, I agree with you. Indeed, not all home investments are bad, there are some countries where this investment is actually profitable. In my country, investing in a house or land is very profitable in the next few years, especially if the location is strategic, it may increase 5x in the next 20 years.

In essence, any investment will be an important key for anyone to be able to achieve financial goals in the future. There are many types of investments that you can choose to realize your financial plans in the future. However, until now, property and bitcoin investments are still choices that can bring many abundant profits in the future. So these two investments are very good to be used as future investments in my country. In addition, home investment is also not too bad because a house is a place to live that must be owned by every human being.

[Peanutswar]

Buying a house must need a lot of things need to be considered such as OP given in the statement but in the long term you can do an investment with this if you found a good place and nearby establishment which has easier access to the community, people use those house to make a rent so they can earn back those money and made the home as an investment if you found a tenant make a rent more over 5 years its good because you have an income with that year just the difference with the bitcoin is the quick flip of an asset, in bitcoin you can easily instant sell your money, in house you need to consider tons of documents and entertain possible clients.
In my country having a land or house is ideal its an ease to save money at least for our daily needs just to find basic necessity.

[anarkiboy]

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 have purchased (built) my house with cash, if you work hard and most importantly - smart, you can do it.
I'm not looking at what it's worth because I am never selling it but looking at what people pay in the neighborhood I know it's worth at least 5x from when I purchased it.

As for maintenance costs, It's really cheap if you do it right in the first place (good materials), in ~10 years I had only few minor faults that cost me close to nothing.
In my family home that's about 60 years old there was not much needed as well but again, good materials were used.

Here in Europe we build houses with quality in mind (except houses built by developers for sale) and they last 100+ years no problem.
From what I've seen in the USA, the quality is very poor so you may have bigger expanses in terms of maintenance.

I wouldn't sell it even for 100x - it's my home, from time to time I get some real estate dealer cards in my mailbox and once even from some family looking to buy a house (dealer in disguise ?  ).
If it was for sale, it would be on the market! dumb people  

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.

Borrowing against your house (mortgage) is the worst and most idiotic thing you can do in your life, you're better off borrowing money from your local gangsters.
You need to own at least one house for yourself, otherwise you are homeless guy renting apartments (burning money).