GoFuckYourself.com - Adult Webmaster Forum - View Single Post - How is buying a house, a great investment?

ADL Colin · 03-10-2007, 10:24 AM

Most people don't account for inflation and the cost of your mortgage (assuming you have one)

If you buy a house (sorry, Peaches) and:

Get a mortgage at 6%
Your home appreciates at 5%
and there is inflation of 3% per year

You have lost real spending power even though your house is worth more money in the end. When the average person has a mortgage rate of 6% and goes against inflation of 3% they have a decent hurdle to beat in actual home appreciation. I do agree with Peaches you should consider what you would have spent on rent.

In the end, some of those people will do well and some won't. Robert Shiller did a study that considered the REAL (accounting for inflation) change in home prices for the entire 20th century. Basically, you would have broke even purchasing a house in an average US market in 1950 and selling in 1995. Your house would be worth a lot more but you'd end up with the same purchasing power. In some markets (California) you would have done great. In others you would have lost purchasing power.

I would say a home is a much better hedge against inflation than, say, gold. Gold has lost tons of purchasing power the past 25 years. Houses just kept pace with inflation from 1950-1995 or so.

Is a house (or RE in general) a "great" investment? I think it is a fair investment and like most things your mileage may vary. Buying in overheated markets right now entails mor erisk than if you bought in 1994. Is porn a great business? Is for some. Sure isn't for others.

YMMV.

03-10-2007, 10:24 AM
ADL Colin Too lazy to set a custom title Join Date: Feb 2001 Location: Tube Titans, USA Posts: 11,929	Most people don't account for inflation and the cost of your mortgage (assuming you have one) If you buy a house (sorry, Peaches) and: Get a mortgage at 6% Your home appreciates at 5% and there is inflation of 3% per year You have lost real spending power even though your house is worth more money in the end. When the average person has a mortgage rate of 6% and goes against inflation of 3% they have a decent hurdle to beat in actual home appreciation. I do agree with Peaches you should consider what you would have spent on rent. In the end, some of those people will do well and some won't. Robert Shiller did a study that considered the REAL (accounting for inflation) change in home prices for the entire 20th century. Basically, you would have broke even purchasing a house in an average US market in 1950 and selling in 1995. Your house would be worth a lot more but you'd end up with the same purchasing power. In some markets (California) you would have done great. In others you would have lost purchasing power. I would say a home is a much better hedge against inflation than, say, gold. Gold has lost tons of purchasing power the past 25 years. Houses just kept pace with inflation from 1950-1995 or so. Is a house (or RE in general) a "great" investment? I think it is a fair investment and like most things your mileage may vary. Buying in overheated markets right now entails mor erisk than if you bought in 1994. Is porn a great business? Is for some. Sure isn't for others. YMMV. __________________ Adult Date Link - $50 PPS starting NOW! -- good and JUICY! skype = "adultdatelink"