[JManc]

Originally Posted by Bailey

I've noticed that many home ownership proponents, leave out multiple factors when comparing it to a straight investment option, such as diversified mutual funds. Maybe your $300, 00 house increased to $400,00 over say, a 20 year period and you boast the $100,00 increase but let me ask you this:

- How much did you actually pay for that $300,000? Obviously this is based on the amount you put down and what your interest rate. So, what was your TOTAL cost of just the mortgage? Annual mortgage × 20 years
- What was your total property tax rate over the 20 years. I live in Texas, which has outrages property tax rate.
- what is your annual insurance policy rate over 20 years?
- what is your annual maintenance fees or Capitol improvement fees per year?
- what is your realtor fee if you were able to turn this into a liquid asset?

Yes, you get the tax deductions but you have to consider EVERYTHING and subtract those from the profit you think you are making.

I'm guessing after you look at all the factors you lost money in this home ownership investment.

There are many reasons to buy a home, but as an investment, compared to a mutual fund, would have to make it a very poor investment. Mutual funds have very little overhead.

You still need a place to live and after 20 years, you have $400,000 in equity you otherwise wouldn't have had if you merely rented. Presumably you'd be investing in equities either way but your provided house a safe recession proof investment. Bonds and utilities aren't get rich quick options either but they are popular.