Saturday, November 14, 2009

You house is a home or a "investment"?

saw this article titled "A house is a home, not an investment" lot of discussion.
I paste a short version here you can read full on NYTimes. btw, it's NY Times so the price maybe different in your area.

"spend a nice week at a friend's new house. At the end of a visit with friends a while ago, I took a little tour through the house to count the rooms that had gone unused through the long weekend.

There was a finished game room in the basement, a kids’ playroom on the second floor, the second guest room, a sitting room and formal living and dining rooms — all unvisited for three days while the seven of us hung out in the family room and kitchen. Finishing my tour, I found four big air-conditioning units humming beside the house, each as big as the single unit that cools my own home quite nicely.

Now, our friends are very successful small-business owners, and they can afford this house. But, wow! There’s a lot of money committed to owning and maintaining this palace — money that could be invested elsewhere, put back into the business or kept in reserve in case the business hits a rough patch. Is the home really a good enough investment to justify such expense?

We often hear that the home is our “biggest investment.” But there’s a good case to be made that a home isn’t an investment at all. On a purely financial basis, owning a home is generally more profitable over the long term than renting. But I believe an expensive home is generally not as good an investment as an inexpensive one — not considering the alternatives. "

Continue at NYTimes

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