biophase
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The first thing I think you need to do is to clarify if you mean a home where you live or a piece of real estate.
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Free registration at the forum removes this block.You need to rent a home to fight these costs in my opinion
Your paying it either way. Ok, I'll take the opposite stance as @Kak just so you have a comparison.
IF - you live in a market that usually appreciates due to population growth (think Florida, California etc) and IF you buy at the right time and IF you sell at the right time, you can do well owning your own home. This is mainly due to no capital gains tax on the profit you earn (capped at $500k or so). Theoretically you could make good money if you had the will to move a lot and play the home value swing. Lots of IF'S but it can work.
I'm skeptical of homes as investments to build net worth the same reasons I'm skeptical of Wall St to build net worth (unless you're a day trader or flipper). Is it like the compound interest scam:
1. Home prices are based on demand and actual building costs, right? Demand is basically economic growth and wage growth--stagflation or a recession could always occur, and homes aren't exactly liquid like stocks--you can't get out of a home if you see trouble.
2. Homes are tangible, but tangible assets tend to have wear and tear--cars are depreciating for this reason. So the home itself is depreciating.
3. Homes aren't cheap, so you have to get a mortgage most of the time, but mortgages have interest which cuts into any return. Interest rates for homes aren't non-negligible--I think they're at inflation for prime borrowers or maybe higher.
4. Homes have plenty of fees-property taxes, commissions to brokers, insurance, etc. You need to rent a home to fight these costs in my opinion, but if you're living in the house you can't exactly do that.
So would a home actually appreciate? I'm skeptical--unless you're renting out a house in NYC while living in the cheaper Podunk Town, why would want to own/get a mortgage a house?
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