The equity shows up as a net asset on my Personal Financial Statement.
I
can borrow against it. If I sell the house, it goes in my pocket. To
put
it simply: it's profit.


**********************

If you sell the house it goes in your pocket for as long as you're
happy to live in a tent, or a mobile home. :-)

Fact is, unless you are willing to lower your standard of living by
moving to an older, smaller home in a crappier neighborhood you will
take all those sales dollars, and possibly more, to *replace* the house
you just sold.

Real estate is a good investment, but a primary residence is not
considered investment property.

NOYB wrote:

Chuck is the first person that I've heard say that a home in a rapidly
appreciating real estate market is *not* a good investment.

****************************

I'm seriously surprised.

Your house is a house. It's not an investment. Sky high and soaring
housing prices are only a good thing if you own other real estate in
addition to your primary home. You can have your home, (which you
need), or the money tied up in it, but not both.

When you cash out an "investment" your options in life should increase
substantially. When you cash out your house, you get to live in a yurt.

wrote in message
oups.com...

NOYB wrote:
wrote in message
ups.com...


There are many, many investments that have an equal or greater
return.

Housing prices have averaged an increase of 17-26% in Naples over the
last 6
years. Name a single investment that offered equal or greater
return, with
the same level of risk, *and* a tax deduction.

Not everyone is in Naples, FL, you dimwit!!!
Now, an average increase of 17 to 36% would be all well and fine, if it
were profit. It is not, and if you think it is, you are dumber than I
thought. You'd be better off perpetuating lies about other people, with
your buddies JimH, Fritz, and Smithers.


If not profit, what is it?

Chuck,
You are incorrect.


wrote in message
oups.com...
P. Fritz wrote:

What other investment can be made (as an individual) for as little as
0%
down, that is historically an appreciating asset, where the cost of
financing (as well as taxes on it) are deductible?

Chuck is sounding jealous, like a typical liebral.
************************

Your primary residence is *not* an investment. Many commercial level
financial statements won't even allow you to list the equity in a
primary residence. It isn't an investment because you cannot choose to
do something else with the money without giving up your essential
shelter.

Your additional properties *are* investments, and often rather good
ones. But your domicile is not an investment, no matter how much the
folks who have never saved a dime or created a passive income stream
wish that it were so.

NOYB wrote:

There is one home (out of 31 for sale in my neighborhood) under 7
figures.
It's 1500 sq ft., was built in 1960, and is priced at $959k.


************

31 homes for sale in your "neighborhood"? Either its a big
neighborhood, or that full size Bush billboard in your front yard has
everybody p-o'd. :-) (kidding)

Illustrating my point, exactly. Lets say you paid $500,000 for you pad,
and it would now sell for
$1.3mm. If you sold your house for that price and needed to move to
another just as nice, it would cost you $1.3mm to buy an equivalent
home in the same area.

Now, if you had purchased two or more homes when they were selling for
$500,000 apiece- each of them beyond the one you consume each month by
living in it would actually be an "investment." If you sold two
investment homes corresponding to the above example you would have a
gross capital gain of $1.6mm, not a bad payoff for simply sitting
around cashing rent checks for a few years.

But don't take too long to die, as you may be required to sell that
house and spend nearly all of the proceeds on your medical care to
become impoverished enough for free health care. (In that case, your
heirs might sneak into the nursing home and pull the plug before you
completely drain the well).

Etiher that, or you could sell and move to a mobile home. :-)


Reverse mortgage on the home, gift away all assets 3 years prior to
medical need and then suck up the free medical when you need it! It's called
estate planning.
G

Dr. Jonathan Smithers, MD Phd. wrote:
Chuck,
You are incorrect.



In groups where serious money routinely changes hands, equity in a
personal residence is not typically considered an investment asset.

Example:

A couple of years ago Smith Barney was offering some specialized
brokerage services for those clients with net assets above $10mm.
Specifically excluded from the calculations was equity in a personal
residence. (Darn it all, anyway, I was only $9.99mm from the finish
line before they threw that curve at me.)

Do a bit of research, and you will discover that for most financial
transactions beyond trying to qualify for the next overpriced property
or applying for a Home Depot credit card, home equity is either not
even taken into consideration or will be considered only up to a
predetermined, limited percentage of overall net worth.

Loans where the property will be used as collateral are going to be
exceptions, of course.

Ummmm -- Realtors commission, survey and other transaction expenses?

Reply

*************

Indeed, that's why I used the term gross capital gain.
It will be reduced to net by transaction expenses as well as pretty
healthy bite from the tax man.

NOYB wrote:
Housing prices have averaged an increase of 17-26% in Naples over the
last 6
years. Name a single investment that offered equal or greater return,
with
the same level of risk, *and* a tax deduction.


We already had this discussion, didn't we?

A house is not an investment instrument. The fact that house prices have
gone up steadily over the past 10 ~ 15 years in most areas, and
astronomically in a few, is no indication that a house should be
considered a bankable financial return.


wrote:
You've almost got it, Doc. The price of housing, expressed in dollars,
has increased 17-26% for the last 6 years. The owner of a single family
home in Nipples is no better off, however, unless he also owns
additional property that he doesn't need to *consume* in its entirety
every month.
If you bought a 3000 sq ft house for $350,000 ten years ago and it's
now "worth" $900,000, you aren't actually any further ahead. If you
sold your house for $900,000, you likely couldn't replace it with an
equally large, equally nice house in a comparable neighborhood for
anything less.

If the house is "worth" $9 million, but you have to pay the same $9
million back out again to replace it, all you have in the end is
whatever you had before (in addition to your primary residence) and a
primary residence with a ridiculous valuation attached. That and a
bigger property tax bill......the local assessors love those inflated
real estate values.


Yep. Them's the facts.

Another issue is a little more basic... no single commodity outstrips
the background rate of inflation in the long run.

None.... never... and part of why is that every commodity which
increases in value contributes to increased inflation.

The fact that housing prices in NOYB's neighborhood have gone up so much
for so long ought to be a warning sign to long term homeowners in that
neighborhood to sell & take the money while they can get it. NOYB is
playing a sucker bet, to the sure profit of the bank, the insurance co,
& his local tax collector... leaving him holding the risk and an
uncertain gain.

Nothing goes up forever.

Regards
Doug King