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Interesting look at the numbers related to home ownership over at Generation X Finance. It’s astounding how numbers that look completely in your favor can actually set you back. In their example, a house is purchased for $200k and sold ten years later for $300k. This looks like a wise investment.
But then you consider the amount paid in interest versus the amount paid towards the principal. Suddenly a $100k profit becomes less than $23k. THEN you factor in inflation, property taxes, insurance, etc. In fact, just taking inflation into account means that you actually didn’t make $23k, you actually LOST over $8k.
This isn’t an article that pitches renting over owning (which has its own negatives) but rather that you should not treat a home as an investment. The whole article is well worth reading and gives you a sense of the costs you need to keep in mind.
Read the whole thing here: Your Home is Not an Investment – Don’t Treat It Like One