I agree. Owning a home is an investment. You would need to pay rent if you didn't own. At least with owning you have the chance of recovering something. And Tim's (Dibble) points are excellent. Homeowners are more likely to get involved in local politics, schools, and neighbours.
The other factor of home ownership versus renting is the involvement in community. Owners participate in local politics, they have a reason to make sure the school remains high quality, that the sewer and water systems operate. Owners tend, more than renters to be connected to other people, sometimes no more than waving recognition, but many times much more connectedness. HOA get togethers often bring people in the same socioeconomic class together increasing the opportunity for friendships to develop (something sorely lacking in our world).
For the illiquidity of the home, you didn't factor in the costs of realtors, closing costs etc. that further limit any potential profit a homeowner might realize.
Calling bull$hit on this analysis. A single-family home that does not generate revenue for the owner is NOT an asset.
Here's why: property taxes.
You only mention property taxes twice in this article. The problem with property taxes is that when they are levied against a non-income generating home (i.e. a single-family dwelling) they become a de facto income tax.
Property taxes have to be paid from a pool of money. The tax man doesn't differentiate revenue from income.
Now a home IS an asset if it generates revenue. That can be from rental platforms like Airbnb or if you own a multi-family home, rent paid by the other occupant(s).
When a property generates revenue that can cover the cost of the tax burden of the home itself then it is an asset. Absent that property taxes are a hidden income tax, making it a liability.
I agree. Owning a home is an investment. You would need to pay rent if you didn't own. At least with owning you have the chance of recovering something. And Tim's (Dibble) points are excellent. Homeowners are more likely to get involved in local politics, schools, and neighbours.
Very impressed and interested in the perspective, As I live the expat life and until this piece I did not question Rich Dad, Poor Dad
But you have made me curious thank you
The other factor of home ownership versus renting is the involvement in community. Owners participate in local politics, they have a reason to make sure the school remains high quality, that the sewer and water systems operate. Owners tend, more than renters to be connected to other people, sometimes no more than waving recognition, but many times much more connectedness. HOA get togethers often bring people in the same socioeconomic class together increasing the opportunity for friendships to develop (something sorely lacking in our world).
For the illiquidity of the home, you didn't factor in the costs of realtors, closing costs etc. that further limit any potential profit a homeowner might realize.
I would think twice about paying off your mortgage - here's why: https://gregdermond.medium.com/why-i-cant-agree-with-mr-wonderful-s-advice-on-mortgages-ac910720ac4b
Calling bull$hit on this analysis. A single-family home that does not generate revenue for the owner is NOT an asset.
Here's why: property taxes.
You only mention property taxes twice in this article. The problem with property taxes is that when they are levied against a non-income generating home (i.e. a single-family dwelling) they become a de facto income tax.
Property taxes have to be paid from a pool of money. The tax man doesn't differentiate revenue from income.
Now a home IS an asset if it generates revenue. That can be from rental platforms like Airbnb or if you own a multi-family home, rent paid by the other occupant(s).
When a property generates revenue that can cover the cost of the tax burden of the home itself then it is an asset. Absent that property taxes are a hidden income tax, making it a liability.