It almost always is. It can also be one of the best investments you ever see. The return can be phenomenal. I made a pile of money from two houses I sold and a little bit (relatively speaking) on one other. Since the gain is no longer taxable in the US if you live in the house you're selling, the return is even greater.

My father-in-law paid about $7,000 for his 3.5 acres and house about 35 years ago. It was the only house for miles on a dirt road when he bought it. He has almost 300' of frontage. Now he's surrounded by huge million dollar-plus houses on zero-clearance lots in the middle of Alpharetta, GA. This is a PRIME piece of real estate. A developer could build over ten huge million dollar houses on his lot. It staggers me to think about how much his property is worth. He wasn't even investing when he bought. Just wanted a house.

 

Everything in American society: insurance, banking, tax law etc, is rewarding to home owners. That is why home ownership is called "the American dream". Actually, ownership in any asset is fostered by our laws and monitary system.

When I purchased my first house, my auto insurance went down, my health insurance went down and my credit report score went up.

 

Not totally, though I agree for the most part. The alternative minimum tax and capital gains tax are eating away at the "American dream." Middle America is poised to be economically slaughtered by the alternative minimum tax. The capital gains tax has always chipped away at a persons attempt to make money.

 

The WHOLE tax system needs an overhaul. If a family earns enough for the alt min tax, they are probably just getting by. Kids to raise, retirement to save for and a house over their heads. I have looked at the FAIR tax. It has many positive attributes including giving ME the incentive to save and invest.

 

The alternative minimum tax is really awful. It needs to be updated, if not eliminated. More and more middle income families are getting sucked into it and finding that they owe tens of thousands in taxes when they normally got refunds.

Is that Boortz' FAIR Tax Plan? Not his, but the one he touts and has written about? It's primarily a consumption tax. I like it better than what we have now.

 

Yea, that's the one. It encourages saving by taxing spending and not our hard work. He doesn't even promote that fact. It takes away a lot of lobby power in DC as well.

 

See, but why not put your "rent" money toward a mortgage instead? I just don't understand that. Unless you're renting from an equity property...then it makes sense because it puts your rent money toward a home equity loan.

 

There are many reasons. I don't know all of them, but I can think of a few.

Some people can't qualify for a mortgage. High risk borrowers can't enter the market because their interest rates would be so high that the loan is not affordable.

Some people move around so much that buying doesn't make sense. If your property appreciates significantly in a short period and you paid no closing costs, you may be able to do this without losing your shirt. This would be a high risk investment, though.

Some people don't have the required down payment for a mortgage--usually about 5% or so of the house's value. If you have less than a 20% down payment, the mortgage company will force you to buy mortgage insurance. That will add $100 or more per month.

When you buy a house, you have to buy more than just the mortgage: insurance, utilities, maintenance, repairs, lawn mower, gardening supplies, some major appliances, etc, etc.

Is buying better than renting? Generally yes, but it's not a good fit for everyone.

 

With my age and a very short credit history, my mortgage to buy a house would be skyrocket, if I would have chose that route right now. If anything, and if I had to, I would rent until I build for credit history and know that I'll be in the area for a while.

At this point and time, renting would be the best way to go for my situation right now.

Plus saving "rent" money must be easier said than done or you won't not have people struggling living pay check to pay check in all levels of income.
And some people use that "rent" money to save to kill that bad credit so that they can get a mortgage to buy the house.

 

This is why i cant decide if i want to buy another car or buy some land.