

Is it a bad idea to buy a home from an investment perspective? - mrmirz

I wrote a blog post presenting the case that you&#x27;d be better off renting and investing your money elsewhere:<p>http:&#x2F;&#x2F;www.supermoney.com&#x2F;2014&#x2F;05&#x2F;home-ownership&#x2F;<p>Genuinely interested in hearing the community&#x27;s feedback and discussion about that topic.
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Justsignedup
\- Mortgage payment is always WORSE in the short term compared to rent
payment. However rent goes up, and unlike mortgage is not fixed. So while I
may be paying $1000 in mortgage but only $800 in rent, in ~ 10 years I will be
paying $1000 in mortgage and $1300 in rent. And in 20 years, etc.

\- You are correct about investing in properties as pure long-term investments
vs stocks/bonds/etc. While mortgage may seem better, it is a singular point of
investment, while stocks/bonds/etc allow you to diversify.

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jareds
Mortgage is not always worse then rent. I'm saving about $200 a month
including taxes by having a Mortgage instead of renting a comparable place. It
depends on the area and what you are looking for.

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mrmirz
The article is using median numbers. There are of course regional differences
in real estate investment and I was thinking about doing a follow up article
on that specifically. I tried to somewhat address this by saying

"There are many mistakes that people could make that would cause their real
estate investment to be a less than favorable one. Rushing into home
ownership, buying in a region that is failing economically, getting sucked
into a loan that is less than optimal, or even being uneducated or less
informed about your options could result in a negative outcome."

Saving $200 on your mortgage!? Where do you live?

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jareds
In a Suburb of Detroit.

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sharemywin
I'm not sure the quality of what you get for $850 a month is the same as a
290k house. For 290k you could easily afford double and rent one side out for
$850. $966 of your monthly payment in the beginning is interest with a
deduction. So if your in it for the money buy a double rent it out: you'll
still have the money to invest in the market. plus your taxes deduction of
about $400 a month. .

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emkay18
Interesting point, and just what I was thinking. If I could go for a 290K, and
rent out one part/room for ~$1000, I'm pretty well off having the money with
me that can help pay off the mortgage or part of it and keep it all to myself
at the end of 30 years. Otherwise, it is scary to put all my money into a dead
investment for a "perceived value" in X years into the future which I'm (or
anyone else for that matter) not even sure of. A lot of factors to consider
here, and clearly no thumbrules. Interesting article and that data was an eye-
opener.

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tlin623
This is a nice bird's eye view from the investment perspective. Owning and
customizing your nest with furniture(s) would be another great reason to own,
I know most of my friends who are renting are not investing in furniture
thinking the place they are staying are always temporary as a result spending
more on cheaper furniture.

