People Who Live In Suburbs: Classy, Icky, or Dudes?

yes, but land is worth more than plastic chips.

and let's say you bought a house that is affordable to you, with a 30 year mortgage, and you paid it off, and you continued to live there after those years -- your housing costs are nominal at that point, unless your property taxes get jacked up.

no land is worth what land is worth and plastic chips are worth what plastic chips are worth, and both of their value depends on the demand for that land or for those plastic chips. and enough plastic chips or paper bills are 'worth more' than lots of land is 'worth'. if you want to bet on the future demand for various types of land then you're still not 'investing' anymore than you are when you buy gold, but yes you can 'make money'.

lol @ iatee sticking to his guns so damn hard that he has to put scare quote around 'make money' to make it fit his argument

if you want to bet on the future demand for various types of land then you're still not 'investing' anymore than you are when you buy gold

people buy gold as an investment. people buy land as an investment. yes.

let's say that instead of saving money 'in your house' you saved money 'out of your house', then 30 years from now you would have that same money, and you could buy a house if you wanted xp

ideally, from a financial health perspective you would be doing both. home ownership isn't a problem, it's people spending too much money (relatively-speaking) on houses that's the problem.

home ownership isn't a problem, it's useful for some people in some situations, it's just not something we need to encourage w/ massive tax breaks

are you talking about first time homebuyers credits, mortgage interest deductions, exemptions from early withdrawal penalties for IRAs ??? something new?

i think we just need to find a way to make sure that the land speculated on will rise in value

http://www.sidekickcomicsuk.com/blogs/media/blogs/sidekick//genelex.jpg

man, where is my realtor? i want to find out where my "massive tax breaks" went when i bought my house.

why would I not be talking about any of those

xp

jon you should have sarah do your taxes maybe

the mortgage interest deduction is interesting from a historical perspective - like, it's still around, whereas deductions for interest on car loans and personal credit cards all went away with that 1986 tax bill, that I'm blanking on the name of atm

I think the solution is really to just kill off anyone that owns a car, then kill off people that own land, then move everyone else into iatee's building and he might be happy.

the thing that make real estate a bad investment isnt really its rate of return + other ancillary benefits which could be good or bad depending its that its illiquid and undiversified

the thing that make real estate a bad investment isnt really its rate of return + other ancillary benefits which could be good or bad depending its that its illiquid and undiversified

unless you own a lot of it, in different areas and of different types

right, so if you are a real estate company it becomes an investment

right those problems refer to people who buy a single house to live in it, not like real estate companies or w/e

tho tbf real estate investment is a p dicey business too

well, it also depends on the function of the investment. Like it should be considered a long-term investment - like, you buy it when you're young and live in it until you die or have to go to the nursing home. but as someone pointed out upthread, i think it was jon, houses can also be used for temporary cash flow problems, like the person starting a business.

another thing that can be used for temporary cash flow problems is almost any other investment that the money would otherwise be in

and man, let me tell you, if you have a profitable business and do some of the work out of a home you own, the tax benefits are really enviable.

xp - uh, taking money out of an IRA or an employer retirement plan before you reach retirement age is a bad idea, the penalties are higher than mortgage interest rates.

selling stock is a much easier and cheaper than refinancing yr house

if that stock is in a standard brokerage account and not in an IRA or other retirement savings account (which is where most people put their savings), then yes, you are right.

yes, that's why I said "almost"

yes, but that's a minority of investments, as far as the American public is concerned!

'this is what the american public thinks' is, if anything, a good way to argue against an idea

would be curious to see a break down on penalties paid on withdrawing ira funds early v interest paid on 2nd mortgages, nah no i woulndt n/m just kill me now

I'm not saying that that's what they think, I am saying that the majority of Americans who have money investment in stocks, bonds, etc. have it invested through retirement plans that carry significant penalties (10% federal, some states assess penalties as well, California's penalty is 2.5%) for taking money out early.

that only on the earnings tho, not the principal

?

rule of thumb: if you get a tax deduction/reduction for putting it into the account, it is taxable coming out (and subject to penalties for being taken out early)

a. there are other ways to save money, whether or not they are currently the norm
b. upthread there was evidence that people who own houses are less likely to start a business, so the fact that we are talking about how great it is that you can take money out of your house to start a business is like some ouroboros argument

ah ok i have never had one of those shits, it really doesnt seem worth locking away money i might like want to access at some point

thread got so hilarious

b. upthread there was evidence that people who own houses are less likely to start a business

but that was about British people, so it doesn't really provide much in the way of evidence

in any case it's a marginal issue compared to things like job mobility and whether or not the govt should be giving tax breaks to upper middle class owners and not lower class renters.

you should just be glad they repealed the deduction for car loan interest back in 86

that was the year I was born, I was like an anti-car jesus

i like cars, but people spend too much money on them.

iatee on your planet who owns all the housing and what does that do in terms of wealth distribution/inequality in your planet's society?

anyone who feels like they have very stable long-term employment and wants to avoid future price volatility buys.

gov't stops pushing housing via tax policy so a poor single mother who rents and saves money isn't punished by the tax system for not adding unnecessary risk to her life.

gov't also stops pushing housing via form planning (single-family houses are more natural 'fits' for ownership) which is also good for people like her, because she isn't forced to spend a third of her income on a car and can take reliable public transit to work etc.

a large apt building market not constrained by zoning policy and nimbyism ensures that she isn't 'taken advantage of' by the man (anymore than she's taken advantage of when she owes a bank for 30 years, at least). if she's very poor and can't even afford market rent for the metro area, she's given gov't help.

everything about the system 'not in my planet's society' is currently working against this person

iatee fwiw I agree with a lot of what you say. I was yelling pretty loudly against housing as an investment back in 2006 when the bubble was still running up, and there are posts to prove it. I also oppose the mortgage interest tax deduction. In fact I don't even think it actually "encourages home ownership" -- it just inflates prices a bit more.

That said, I think you are making some mistakes in your thinking about housing as an "investment" (or non-investment). You can't compare ROI on a house to ROI on other things because (1) it doesn't work the same way, and (2) no one has the option of earning ANY return on their rent money, in fact it's a total loss.

Obviously if the total monthly cost of ownership in your location is way, way above that of renting, it's possible you're better off just renting, then taking the excess and putting it in a 401(k) or IRA in some index funds and sitting on them for the next 30 years.

But once the costs get closer, it's not a choice between put $1500/mo into an index fund vs. put $1500/mo into a house, it's put $1500/mo into a house, where you keep the principal plus a very small return, vs. put the $1500/mo into your landlord's pocket. I was the quick to call bullshit on this argument back when costs of ownership were way out of whack with renting and prices were appreciating unsustainably, but now that the market has cooled there is legitimacy to this argument.

Of course this usually only works if you're going to be staying in a place at least five years or so. But once you're working and have a family it's not really hard to make this assumption.

Hurting OTM

Plus a lot of people are just really, really bad at managing their 401ks/IRAs. I'm actually pretty much against individually-managed retirement accounts - I think they're a giant scam.

again you are missing what I said upthread - in some markets today the price-rent ratio makes buying cheaper for many people but that's *because* we have a highly constrained rental market, not because houses are magic things that make money. in a functioning market the only money you can make by taking out a huge loan to buy a depreciating object would be vis speculation.