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

[Woodie]

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.
~snip~

As much as securing a roof sounds like a good thing, unfortunately buying or building a house is 90% of the time going to be a liability!

Like OP has already pointed out maintenance expenses to keep house in good shape are unavoidable, if a mortgage is taken you need to keep funds going to paying it off and for any business minded person going this route could mean tying up capital which have been used in other projects to make more money...

But not to discourage this great idea, people should build or buy a house from profits made from a business and not kill the business to buy or build!!!

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 summarized!

[Cryptoprincess101]

---cut out---

OP even though your post looks like making a comparison between having a house as an asset and buying of Bitcoin as an asset too but I feel the appropriate board for this discussion is the economy board.

Now, every one has the kind of investment they wish to own despite if they don't get enough proceeds from it but the reason why some people own physical assets like landed properties is for it to stand as a means of savings for them because in the future they can decide to sell it and make some money from it so not everyone is actually owning properties due to the profits it will generate for them in the future that is why they don't care about the cost of maintenance, taxes and other requirements that is needed for such investment to be sustainable and just like you said, some people also own houses in order for them to pass it on to their offsprings but a house shouldn't be completely seen as a very good means of investment because no matter how you try to maintain it, can lose value in the future because people will prefer modern day houses and by then your own might be seen as old fashioned.
        Would have loved to talk about investing in Bitcoin but since the contents of your post didn't discuss about the need to invest in Bitcoin instead of buying house(s) let me just discard it even though your subject is more like making a comparison.

[Asuspawer09]

Overall I think it will all depend on your situation, here in my country buying a home is never a bad idea in my opinion, It has a lot of benefits as well for most people, it is almost a guaranteed profit in the future since the market value of homes is increasing yearly, I mean compared to Bitcoin, Bitcoin can easily be liquid money and has a more volatile market price compared to the value of the homes here, still I would mark the home as a more guaranteed profit than buying Bitcoin, even though the potential profit could be higher on Bitcoin investments.

Depending on the investors, for example, I have a small Bitcoin investment but still my goal is to buy my own home or real estate, When I'm able to earn a good amount of profit on my Bitcoin investment my goal is still to buy a property or house something like that, Because in the end it is a tangible assets, anybody can argue that this property might not be a good investment since if I buy a house I might not sell it, or I don't have any intention to sell it in the future for profit, but still I have that option just in case, plus I could make it a passive income if I really wanted to like a rental apartment thing that could generate me a passive income.

So right now, I am going to invest everything in Bitcoin since it is the best option for me right now, and probably that is where I could generate a profit in the future, and the end goal is buying real estate. This was easy since both are not going to be a bad decision what ever you pick between the two, just buy whatever makes sense for your situation right now, research the law, value, market, etc. on Bitcoin and property, whatever you think is going to generate a higher profit or depend on your needs just invest on it, In the end, the important thing is your doing your best to invest for your future.

[C10H15N]

The house that I paid nearly a thousand dollars a month for for twenty years (including taxes and insurance) is now owned free and clear.
If I had to rent it today I would be paying around two thousand a month.  My yearly taxes and insurance are the equivalent of two months rent.
Yes, I do have to pay maintenance when things need repair and the utilities I consume, but I also own an asset worth almost half a million dollars.

[JunaidAzizi]

What I can say about my places is that houses are the best investment, not only financially but also for your future children. Buying a house requires a lot of funds, but once you purchase it, its price increases over time, often doubling. Every year, house prices do not decrease; in fact, they increase, and a good investment is one where demand goes upward every year.

So, in this way, buying a house is not a bad idea at all. When you talk about taxes, remember that everything you earn in a country will incur some taxes to the government, and this tax will not be included in your profit, meaning your profit will cover this tax.

[uchegod-21]

The house that I paid nearly a thousand dollars a month for for twenty years (including taxes and insurance) is now owned free and clear.
If I had to rent it today I would be paying around two thousand a month.  My yearly taxes and insurance are the equivalent of two months rent.
Yes, I do have to pay maintenance when things need repair and the utilities I consume, but I also own an asset worth almost half a million dollars.

The economic policy and reality is different in different countries. We don't need to generalize with US in mind. There are alot countries which do not pay tax on landed properties. So, in such countries, it is good to buy or build a home.

You only buy or build a home if you actually need it and not necessarily because you want to do it. There are alot of investment opportunities and bitcoin is one of them and volatile in that matter. So, bitcoin is not the end of investment.

[Richbased]

For someone who is paying a huge amount of money on rents annually, they know the pain of not owning a house of their own so I want you to know that there is peace and dignity in having your own house even if it's not for investment purposes but shelter is very important in the life of humans however, I want to make it clear that regardless of the fact that bitcoin is a good investment that will stand the test of time, having physical assets likes houses and real estate is a very lucrative investment that can propel you for life if managed very well so for buying or building of houses, it is sacrosanct like it is a obligation that every man wishes to fulfill in life.

However, Having your own house gives you comfort of your own even if it isn't giving you profits but your children will live to inherit them and be proud of you. Investing in Bitcoin it good but how does it feels that you have a huge amount of Bitcoins in your portfolio and you don't own a house?

[milewilda]

For someone who is paying a huge amount of money on rents annually, they know the pain of not owning a house of their own so I want you to know that there is peace and dignity in having your own house even if it's not for investment purposes but shelter is very important in the life of humans however, I want to make it clear that regardless of the fact that bitcoin is a good investment that will stand the test of time, having physical assets likes houses and real estate is a very lucrative investment that can propel you for life if managed very well so for buying or building of houses, it is sacrosanct like it is a obligation that every man wishes to fulfill in life.

However, Having your own house gives you comfort of your own even if it isn't giving you profits but your children will live to inherit them and be proud of you. Investing in Bitcoin it good but how does it feels that you have a huge amount of Bitcoins in your portfolio and you don't own a house?

But there are sayings that renting a house is amuch more cheaper rather than on owning an house and this is why it would really be that normal that there would really be those individuals who would really be that much prefer on renting rather than on paying up their amortization for a long time. This is why it would really be that having those conditions that they would really be considering on having that other options on which they could really be able to take and mind off on where they could really be able to save up. As for the subject in between buying up a house or making up some Bitcoin investment then i would say that this would really be that preferred on someones options on which we know that when it comes into this aspect then it would really be that hard specially if you are really that eager on investing into Bitcoin.

Its not really that bad to consider out such option on which we know that when it comes to this manner then you would really be definitely be thinking up on which one would really be worth and which one
would really be that something that you will really be able to make yourself having that kind of advantage among the two. This is why choices will really be that basing up into someones
choice and its impossible that you cant really be able to make yourself wary at least.

[SatoPrincess]

For someone who is paying a huge amount of money on rents annually, they know the pain of not owning a house of their own so I want you to know that there is peace and dignity in having your own house even if it's not for investment purposes but shelter is very important in the life of humans however, I want to make it clear that regardless of the fact that bitcoin is a good investment that will stand the test of time, having physical assets likes houses and real estate is a very lucrative investment that can propel you for life if managed very well so for buying or building of houses, it is sacrosanct like it is a obligation that every man wishes to fulfill in life.

However, Having your own house gives you comfort of your own even if it isn't giving you profits but your children will live to inherit them and be proud of you. Investing in Bitcoin it good but how does it feels that you have a huge amount of Bitcoins in your portfolio and you don't own a house?

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?   

[Richbased]

For someone who is paying a huge amount of money on rents annually, they know the pain of not owning a house of their own so I want you to know that there is peace and dignity in having your own house even if it's not for investment purposes but shelter is very important in the life of humans however, I want to make it clear that regardless of the fact that bitcoin is a good investment that will stand the test of time, having physical assets likes houses and real estate is a very lucrative investment that can propel you for life if managed very well so for buying or building of houses, it is sacrosanct like it is a obligation that every man wishes to fulfill in life.

However, Having your own house gives you comfort of your own even if it isn't giving you profits but your children will live to inherit them and be proud of you. Investing in Bitcoin it good but how does it feels that you have a huge amount of Bitcoins in your portfolio and you don't own a house?

But there are sayings that renting a house is amuch more cheaper rather than on owning an house and this is why it would really be that normal that there would really be those individuals who would really be that much prefer on renting rather than on paying up their amortization for a long time. This is why it would really be that having those conditions that they would really be considering on having that other options on which they could really be able to take and mind off on where they could really be able to save up.

I believe no one wants to end up living in rented apartments forever, so even if you decide to pay rents and save up money for other investments, the need to own a house will eventually come up in the future especially for someone who has a family of their own however, everyone is at liberty to how they want to live their life inasmuch as it doesn't lead them to any unnecessary pressure.

As for the subject in between buying up a house or making up some Bitcoin investment then i would say that this would really be that preferred on someones options on which we know that when it comes into this aspect then it would really be that hard specially if you are really that eager on investing into Bitcoin.

Just like I said initially, between choosing to own an investment in Bitcoin or acquiring a house in form of an asset, time will come when we definitely gonna wish to have our own houses.

Its not really that bad to consider out such option on which we know that when it comes to this manner then you would really be definitely be thinking up on which one would really be worth and which one
would really be that something that you will really be able to make yourself having that kind of advantage among the two. This is why choices will really be that basing up into someones
choice and its impossible that you cant really be able to make yourself wary at least.

Sure but let's not make it look like investing in a landed property will be a waste of time no matter the choices of anyone.

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.

[philipma1957]

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.

You are neglecting that if you do not buy a home you need to rent something.

So a home purchased at 150k in 1994 that is now 650k gained at

5%

Obviously there is maintenance, heat bill , insurance blah blah blah

but try renting for 30 years

my home is close to the 150 to 650 I mention.

MY home used to rent for 800 a month

with you paying heat electric and blah blah blah

my home now rents at 4000 a month

so 800 + 4000 = 4800/2

2400 a month more or less is spent for 30 years.

that is 2400 x 12 x 30 = 864,000 paid in rent and you got nothing to show for it.

So you should simply lock your thread as it is completely wrong to a point of total ridiculousness.

[RockBell]

What I can say about my places is that houses are the best investment, not only financially but also for your future children. Buying a house requires a lot of funds, but once you purchase it, its price increases over time, often doubling. Every year, house prices do not decrease; in fact, they increase, and a good investment is one where demand goes upward every year.

So, in this way, buying a house is not a bad idea at all. When you talk about taxes, remember that everything you earn in a country will incur some taxes to the government, and this tax will not be included in your profit, meaning your profit will cover this tax.

It's not only your place but everywhere house is something that we all need and can do without because we need to protect our selfs from elements and also for security so it's a very good investment because if you are tired of owning a home you can also decide to sell it so their are a lot of benefit from owning a house. Or they can inherit it because if you look at the amount been projected to buy a house now is huge so those that already have a house don't know what God have done for them because, even rent is in a rise and landlords are also affected by inflation and hyper price of everything so they are also looking for ways to also make more money I just wonder how we are going to continue surviving in this economy like this were everything is bad.

I have not seen the price of houses decreasing so and any investment that is not affected for the price to come down is actually a very good investment. And with all this taxes the government are not even helping matters, we need to work hard to be able to maintain all this financial crisis we are all going through high taxes and how everything is just expensive.

[Farma]

It's not only your place but everywhere house is something that we all need and can do without because we need to protect our selfs from elements and also for security so it's a very good investment because if you are tired of owning a home you can also decide to sell it so their are a lot of benefit from owning a house. Or they can inherit it because if you look at the amount been projected to buy a house now is huge so those that already have a house don't know what God have done for them because, even rent is in a rise and landlords are also affected by inflation and hyper price of everything so they are also looking for ways to also make more money I just wonder how we are going to continue surviving in this economy like this were everything is bad.

I have not seen the price of houses decreasing so and any investment that is not affected for the price to come down is actually a very good investment. And with all this taxes the government are not even helping matters, we need to work hard to be able to maintain all this financial crisis we are all going through high taxes and how everything is just expensive.

Everyone needs a house for them to live with their family and as you have said everyone needs a place to live as a shelter and also as the most comfortable place to rest after being tired from the work we do and we all realize that a house is a very useful investment for ourselves and also other family members but for now if we do not have enough funds to own a house of course we have to rent it and we have to keep saving to be able to own a house because by continuing to rent it of course this will be very difficult for us when the price of the house we rent continues to increase so that we have to keep moving according to our ability to rent it but by owning a house this will be better and we no longer need to think about the rental price every year.

It is true that there is no decrease in house prices and in fact it is not uncommon for us to see house prices continue to increase as long as the location continues to become more densely populated, tax increases of course this will be a burden on anyone and we must be able to survive in a situation like this by continuing to work to be able to meet all the needs we need.

[moneystery]

i don't think investing in a house is that bad, maybe in some locations it is bad, but we can't generalize all places because there are very good places to invest in a house, for example in my city there is an area with a 20% increase in house prices due to the construction of an airport there. so investing in a house can be more profitable or not depending on the location.

[Gallar]

~Snip

Investing money in a house in my opinion is not a bad thing. Because we all know that every year house prices continue to increase. This is because the price of land, building raw materials and house construction services is getting more expensive every year. So it is not surprising that house prices increase quite significantly every year. Therefore, if we have money and invest it in a house, I think that is a pretty good idea too. Even though it is true that if we invest in a house, there will definitely be repair costs and taxes. However, in my opinion, this can be overcome by investing in a period that is not too long (1-5 years). So, when the house is sold, it is likely that there will be no more repairs that require large costs. Because as far as I know, if you buy a newly built house, there will be no significant damage within 5 years. So, I think a technique like this will be very effective for investing in a house.

Then if we compare bitcoin investment with investment in buying a house. It's clear if you look at the current bitcoin cycle, bitcoin is more profitable. However, what is clear is that these two investment assets can be said to be quite good at the moment, so I personally am also running these two investments. Because in essence both investment assets will be very profitable and have their respective advantages.

[Iranus]

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.

I have a friend who currently owns more than 30 motel rooms and each month they bring him thousands of dollars, this is a source of passive income that everyone dreams of. Although it will take him a long time to recover his capital, in the long run it will bring him more benefits than you think. In addition to passive income from rental, he is also the owner of that huge block of real estate and can sell it any time he wants.

It can be said that real estate business brings many benefits whether you use it to rent or build and sell, it will all depend on the amount of capital you have as well as your preferences.

In addition, I think owning a house to live in is many times better than renting a house. Real estate values ​​are increasing over time and our money is losing value every day. Renting a house is not a wise decision unless we cannot afford to own a house.

[The Sceptical Chymist]

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.

[Barikui1]

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.

This is just your own thoughts though, because it's already proven that nothing beats landed property, especially a house, yea it's very true that owning a house might not be that appealing to you base on your location, but in my own location, especially in Africa, if you are a house owner in the a very good populated (city)environment, bro, you have actually struck gold.

I know that their are people that will definitely argue that owning a Bitcoin is better based on it potential in the future and it's ability to appreciate in value overtime, but owning a house can really make you a fortune in terms of rents if it's been own in a very good environment in a populated city where good accomodations are scarce, so it all boils down to the angle you are seeing it from, but as for me, I will choose owning a house over Bitcoin everyday, because houses are asset that also appreciate in value overtime.

[KiaKia]

Believe me, for some its a terrible investment and for others its a lucrative business, now let me ask you, isn't this the same experience with other businesses every where? You just have to find the one that fits who you are, I know people that hated ever building houses for business sake, and I know those that are living so well today thanks to home business.

Whatever the business is, we all can't get the same result, countries varies, and location matters too, we definitively can't get the same result, businesses are all risky, you need to take a step first and see what happens, if a business is bad for you it might be good for me, but honestly Bitcoin just stands out from all available businesses in the world today.

As per who I am and what I have seen in this life I am best fit with Bitcoin investment than  anything else, still this doesn't mean I don't have some offline business too, I believe this is the best plan for me.

[Minor Miner]

This is just your own thoughts though, because it's already proven that nothing beats landed property, especially a house, yea it's very true that owning a house might not be that appealing to you base on your location, but in my own location, especially in Africa, if you are a house owner in the a very good populated (city)environment, bro, you have actually struck gold.

I know that their are people that will definitely argue that owning a Bitcoin is better based on it potential in the future and it's ability to appreciate in value overtime, but owning a house can really make you a fortune in terms of rents if it's been own in a very good environment in a populated city where good accomodations are scarce, so it all boils down to the angle you are seeing it from, but as for me, I will choose owning a house over Bitcoin everyday, because houses are asset that also appreciate in value overtime.

Real estate is clearly an investment, the best asset recognized by the whole world, not just us. But our biggest barrier when it comes to real estate is money, we don't have too much money to own it. So it would be ridiculous for us to say that owning real estate is meaningless or that it cannot be compared to investing in bitcoin.

I bet that if any of us made a big profit from our bitcoin investment, the first thing they would do is buy real estate and build a house. Simply because it is not just a normal investment but it is also an essential need that anyone needs. People who say they don't need real estate, they just want bitcoin are just trying to deceive themselves and they still can't afford to own real estate  .