e*****e
发帖数: 212 | 1 Is Your Home a Good Investment?
by Brett Arends
Wednesday, May 27, 2009
provided by
THE WALL STREET JOURNAL
There's the usual talk about what the latest Case-Shiller house price data
mean for the next short term move in the real estate market. Has housing
bottomed? If not, has the rate of decline slowed? And when will we see an
upturn?
Human nature likes the short term. Which is why so little attention is paid
to something that is probably more important, if less urgent: What the
latest data sho |
h*******y
发帖数: 864 | 2 It is all about expectation.
I expect 0% inflation adjusted return from the house. So I will consider
anything positive a surprise on the plus side.
I also don't take 2% real return from the government bonds for granted,
especially given the flaw in measuring CPI. So I think home could be a good
investment, depending on your circumstances.
Just like I never expect 12% return from equity. So bear market does not
dampen my hope for returns from the equity market.
paid
【在 e*****e 的大作中提到】
: Is Your Home a Good Investment?
: by Brett Arends
: Wednesday, May 27, 2009
: provided by
: THE WALL STREET JOURNAL
: There's the usual talk about what the latest Case-Shiller house price data
: mean for the next short term move in the real estate market. Has housing
: bottomed? If not, has the rate of decline slowed? And when will we see an
: upturn?
: Human nature likes the short term. Which is why so little attention is paid
|
K****D
发帖数: 30533 | 3 Isn't home investment all about the rent? Very few people would
buy a home, leave it empty, and sell it after 5 years bah.
Rent can easily generate 4-5% revenue. And the house itself doesn't
depreciate. I don't know what's better than that, hehe. Surely
this thing beats the gold bricks (on paper).
paid
【在 e*****e 的大作中提到】
: Is Your Home a Good Investment?
: by Brett Arends
: Wednesday, May 27, 2009
: provided by
: THE WALL STREET JOURNAL
: There's the usual talk about what the latest Case-Shiller house price data
: mean for the next short term move in the real estate market. Has housing
: bottomed? If not, has the rate of decline slowed? And when will we see an
: upturn?
: Human nature likes the short term. Which is why so little attention is paid
|
f****t
发帖数: 1063 | 4 true. the original model is wrong...
【在 K****D 的大作中提到】
: Isn't home investment all about the rent? Very few people would
: buy a home, leave it empty, and sell it after 5 years bah.
: Rent can easily generate 4-5% revenue. And the house itself doesn't
: depreciate. I don't know what's better than that, hehe. Surely
: this thing beats the gold bricks (on paper).
:
: paid
|
e*****e
发帖数: 212 | 5 I guess the author was talking about people who think that they can build a
nest egg in their homes, not taking about real estate investment per se.
for example, if you pay 500k for a home today, 10 years later you sell your
home, the return on the 500k is far less than the return if you put the
money in government bonds.
【在 K****D 的大作中提到】
: Isn't home investment all about the rent? Very few people would
: buy a home, leave it empty, and sell it after 5 years bah.
: Rent can easily generate 4-5% revenue. And the house itself doesn't
: depreciate. I don't know what's better than that, hehe. Surely
: this thing beats the gold bricks (on paper).
:
: paid
|
K****D
发帖数: 30533 | 6 Buying home as primary residence is a sure win, as of today,
unless one buys sth too luxury. One doesn't even need to worry
about renting it out -- it's automatically done, hehe. Plus there
is tax benefit too.
I would say, if one will otherwise rent the same level of house,
buying a house as residence beats government bonds hands-down.
a
your
【在 e*****e 的大作中提到】
: I guess the author was talking about people who think that they can build a
: nest egg in their homes, not taking about real estate investment per se.
: for example, if you pay 500k for a home today, 10 years later you sell your
: home, the return on the 500k is far less than the return if you put the
: money in government bonds.
|
t***s
发帖数: 4666 | 7 and normally the house is leveraged, with subsidized low-interest.
a
your
【在 e*****e 的大作中提到】
: I guess the author was talking about people who think that they can build a
: nest egg in their homes, not taking about real estate investment per se.
: for example, if you pay 500k for a home today, 10 years later you sell your
: home, the return on the 500k is far less than the return if you put the
: money in government bonds.
|
e*****e
发帖数: 212 | 8 I don't agree with you 100%. Surely owning a house brings a lot of comfort
and satisfaction that can't be measured by money. Strictly money wise
speaking, it is not a sure win.
First of all, tax is never a benefit. You pay property tax that is all. The
only benefit might be that it makes your property tax smaller.
Now let's talk about the opportunity cost. If the cap rate for a rental
property is 4-5% as said in the other post. This means if you don't buy a
house, you need spend 5% of the pr
【在 K****D 的大作中提到】
: Buying home as primary residence is a sure win, as of today,
: unless one buys sth too luxury. One doesn't even need to worry
: about renting it out -- it's automatically done, hehe. Plus there
: is tax benefit too.
: I would say, if one will otherwise rent the same level of house,
: buying a house as residence beats government bonds hands-down.
:
: a
: your
|
e*****e
发帖数: 212 | 9 I think the leverage is that housing is a safer investment than other venues
.
【在 t***s 的大作中提到】
: and normally the house is leveraged, with subsidized low-interest.
:
: a
: your
|
K****D
发帖数: 30533 | 10 1) I was comparing house with government bonds, which you
mentioned in an earlier post. We did not mention the topic
of house vs stocks in the thread. Quote:
2) When I said the tax benefit, I was referring to the capital
gain tax. Many people pay 0% capital gain tax on their primary
residence.
3) I intended to indicate that buying a house beats buying
bonds *money-wise*. I didn't try to put things like "comfort
and satisfaction" into the picture.
The
earn |
|
|
h*******y
发帖数: 864 | 11 Faint, you gave an example that supports buying a house. Because long-term,
house price also keeps up with inflation (in the article you sent, it is 1-2
% above inflation). Now while your equity is rising with inflation, you also
get an additional 4-5% return for rental property. It sure beats the equity
market as its return is at the same level or better but much more stable.
The
earn
【在 e*****e 的大作中提到】
: I don't agree with you 100%. Surely owning a house brings a lot of comfort
: and satisfaction that can't be measured by money. Strictly money wise
: speaking, it is not a sure win.
: First of all, tax is never a benefit. You pay property tax that is all. The
: only benefit might be that it makes your property tax smaller.
: Now let's talk about the opportunity cost. If the cap rate for a rental
: property is 4-5% as said in the other post. This means if you don't buy a
: house, you need spend 5% of the pr
|
K****D
发帖数: 30533 | 12 It's additional 4-5% minus property tax, mortgage interest and
other fees.
But anyway, as long as the addition is positive, I don't see
why buying a house can't beat bonds.
,
-2
also
equity
【在 h*******y 的大作中提到】
: Faint, you gave an example that supports buying a house. Because long-term,
: house price also keeps up with inflation (in the article you sent, it is 1-2
: % above inflation). Now while your equity is rising with inflation, you also
: get an additional 4-5% return for rental property. It sure beats the equity
: market as its return is at the same level or better but much more stable.
:
: The
: earn
|
h*******y
发帖数: 864 | 13 By the way, if you only spend 5% of the property value on renting the same
house, no way you can get 4-5% return. Because that imply a house-price to
yearly-rent ratio of 20. So you are assuming an operational margin at 80% or
better for the house. Housing market is a commodity market. Such a fat
operational margin would never happen.
The
earn
【在 e*****e 的大作中提到】
: I don't agree with you 100%. Surely owning a house brings a lot of comfort
: and satisfaction that can't be measured by money. Strictly money wise
: speaking, it is not a sure win.
: First of all, tax is never a benefit. You pay property tax that is all. The
: only benefit might be that it makes your property tax smaller.
: Now let's talk about the opportunity cost. If the cap rate for a rental
: property is 4-5% as said in the other post. This means if you don't buy a
: house, you need spend 5% of the pr
|
e*****e
发帖数: 212 | 14 It is still hard to say 100% though.
Interests from government bonds are tax free as well and the risk is almost
0% (for example government inflation protected bonds).
Plus House needs repair and the value is not always going up.
【在 K****D 的大作中提到】
: 1) I was comparing house with government bonds, which you
: mentioned in an earlier post. We did not mention the topic
: of house vs stocks in the thread. Quote:
: 2) When I said the tax benefit, I was referring to the capital
: gain tax. Many people pay 0% capital gain tax on their primary
: residence.
: 3) I intended to indicate that buying a house beats buying
: bonds *money-wise*. I didn't try to put things like "comfort
: and satisfaction" into the picture.
: The
|
f****t
发帖数: 1063 | 15 why don't you buy one right now, just curious?
【在 K****D 的大作中提到】
: Buying home as primary residence is a sure win, as of today,
: unless one buys sth too luxury. One doesn't even need to worry
: about renting it out -- it's automatically done, hehe. Plus there
: is tax benefit too.
: I would say, if one will otherwise rent the same level of house,
: buying a house as residence beats government bonds hands-down.
:
: a
: your
|
K****D
发帖数: 30533 | 16 Because I am a house-black speculator.
【在 f****t 的大作中提到】
: why don't you buy one right now, just curious?
|
f****t
发帖数: 1063 | 17 Buying home as primary residence is a sure win, as of today, unless one buys
sth
too luxury. |
K****D
发帖数: 30533 | 18 No, but almost everything is better than my current 2 bdrm
apartment, hehe.
buys
【在 f****t 的大作中提到】
: Buying home as primary residence is a sure win, as of today, unless one buys
: sth
: too luxury.
|
f****t
发帖数: 1063 | 19 then: Buying home as primary residence is a sure win, as of today
【在 K****D 的大作中提到】
: No, but almost everything is better than my current 2 bdrm
: apartment, hehe.
:
: buys
|
K****D
发帖数: 30533 | 20 I don't understand the logic here. Maybe you misunderstood my words.
I meant: almost everything is more EXPENSIVE than my current 2 bdrm
apartment. (The houses that I would want to buy cost more to rent
than my current apartment.)
【在 f****t 的大作中提到】
: then: Buying home as primary residence is a sure win, as of today
|
|
|
f****t
发帖数: 1063 | 21 sorry, some messup
I know you are house black. but the following is more like a tuo. So just
curious to learn more about your logic
"Buying home as primary residence is a sure win, as of today,
unless one buys sth too luxury. One doesn't even need to worry
about renting it out -- it's automatically done, hehe. Plus there
is tax benefit too."
【在 K****D 的大作中提到】
: I don't understand the logic here. Maybe you misunderstood my words.
: I meant: almost everything is more EXPENSIVE than my current 2 bdrm
: apartment. (The houses that I would want to buy cost more to rent
: than my current apartment.)
|
K****D
发帖数: 30533 | 22
When I mentioned "as of today", I implied that the condition
that "the house price on the long run beats the inflation rate
by 1%" must be true before my conclusion could be true. I am
a house black because I actually don't believe that in the coming
few years.
Again, that condition is mentioned in the first post and this is
where all the discussion started. I am just rebuking the first post's
opinion.
【在 f****t 的大作中提到】
: sorry, some messup
: I know you are house black. but the following is more like a tuo. So just
: curious to learn more about your logic
: "Buying home as primary residence is a sure win, as of today,
: unless one buys sth too luxury. One doesn't even need to worry
: about renting it out -- it's automatically done, hehe. Plus there
: is tax benefit too."
|
f****t
发帖数: 1063 | 23 thanks for your clarifications :)
【在 K****D 的大作中提到】
:
: When I mentioned "as of today", I implied that the condition
: that "the house price on the long run beats the inflation rate
: by 1%" must be true before my conclusion could be true. I am
: a house black because I actually don't believe that in the coming
: few years.
: Again, that condition is mentioned in the first post and this is
: where all the discussion started. I am just rebuking the first post's
: opinion.
|
