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Thank you for pointing this out. Houses can be cheap, or they can be a good investment. Not both. I think I read that here on hacker news a few years ago, and
by mgolawala 3y ago
Thank you for pointing this out.
Houses can be cheap, or they can be a good investment. Not both.
I think I read that here on hacker news a few years ago, and it has stuck with me.
- DontchaKnowit 3y agoI don't think this is true. The investment value of a house is not its appreciation, but rather its ability to generate income in the form of rent.
- msm_ 3y agoThere's no contradiction. If it's easy to generate rent income from a house then houses will appreciate in price. For example, if I can buy a house and pay off the loan just from rent payments then it's a great investment.
- jjav 3y ago> Houses can be cheap, or they can be a good investment. Not both. > I think I read that here on hacker news a few years ago, and it has stuck with me. It's repeated in every HN discussion about housing. Also, it's too simplistic. It's basically impossible (barring a complete market meltdown like Detroit back then) to not increase your net worth owning a house. You have to live somewhere. If you buy a house you (very slowly) end up owning it. A house has nonzero value. Now you have some equity, aka wealth. Even if the price depreciates it's not zero, so you built some wealth (vs renting where you could've rented for 60 years and still own nothing).