I would like to know what you think...I think its a liability but my friends think its an asset...its a constant debate amongst us. I'd like your opinion.
2006-10-18 05:47:29 · 17 answers · asked by BunnyRabbit 2 in Business & Finance ➔ Renting & Real Estate
I fall into the "BOTH" camp and I'll explain why.
The base definition of an 'asset' is something that has value. A home certainly has value, however, it also has a host of expenses (even AFTER it is paid in full). In addition, one can never TRULY own your home in my opinion.
1). The government (be it county, state or federal) can come in and say 'We need your property for a new highway. Here's a bit of cash please move NOW.' Believe me - I've SEEN this happen more than once.
2). Even after you're no longer making mortgage payments you still have repairs, taxes and insurance on the home. These will NEVER go away. Not too mention that if neglect to pay your taxes the governement will once again take away your asset.
A TRUE asset is one that makes you money with NO outlay of expenses or fees. Hard to find. Bank account and investment accounts have fees associated with them.
2006-10-18 06:07:37 · answer #1 · answered by Scotsman 5 · 2⤊ 0⤋
Life is an asset, and the home you live in is your asset as long as you live there. Be it a cave, condo or mansion and whether you "own" it or not - it is an asset (has value). Money is a means to an end. Focus not on the means, focus on the end.
If you wish to be rich and powerful, real estate has always been a part of that game, however if all you desire is peace and happiness you already have all that you need.
A liability is something you no longer desire, so if that is the way you see your home then why have it? Those that hang on to liabilities are getting some hidden reward, be it self punishment or the belief that someone else is being punished. Or maybe they don't see that it is a liability!
2006-10-18 06:24:14 · answer #2 · answered by Anonymous · 0⤊ 1⤋
A house is an asset. Since you have to pay rent to live somewhere anyway, why not pay it to a mortgage company and be buying something. The longer you pay on a house the more equity you are building. Add that to the fact that land values are going up and you could be in the place I am in now. I bought my home 9 years ago for 68,000. It had been vandalized but is in a very nice neighborhood on a cul-de-sac. We have done about 10,000 in work to it and added all new appliances in the kitchen. I had the house appraised last year and it was appraised at 165,000.
So as you can see I have added 100,000 to the equity of my home in the past 9 years. So how could it ever be a liability. I had to pay to live some where, it may as well be here where I can gain something as time passes.
2006-10-18 06:01:36 · answer #3 · answered by nana4dakids 7 · 0⤊ 1⤋
In general, a house is considered an asset. That's based on the assumption that it is worth something. There are, however, many expenses associated with a house, but that does not necessarily make it a liability. The most common liability associated with owning a house is a mortgage loan.
2006-10-18 05:57:42 · answer #4 · answered by mortgagelns 3 · 0⤊ 1⤋
Definitely an asset.90% of the worlds riches are held in real estate.Paying rent to pay someone else's mortgage makes no sense.That is money you will never see again and will have nothing to show for it.Every penny you put into a mortgage goes into your pocket.The equity you hold on a house will also improve your credit rating.There are certain expenditures that one must make in order to keep the property in good condition but the benefits far outweigh the negatives.Consider this,my parents bought their house 25 years ago for $24,000.It is now worth over $300,000.You won't get that kind of return on your money in any bank!!
2006-10-18 06:46:10 · answer #5 · answered by Anonymous · 0⤊ 0⤋
It depends on the context. It is an asset because it is money you can access. It is a liability because you still owe someone money on it. If you don't owe any money, it is purely an asset.
For example, if you are looking at your yearly budget, it is a liability - you have to pay your mortgage each month. If you are looking at your retirement budget, it is an asset - you can sell it and get some funds out of it.
Mostly, I would see it as an asset.
2006-10-18 06:12:43 · answer #6 · answered by Phoenix, Wise Guru 7 · 0⤊ 1⤋
That, my friend, all depends on how YOU perceive it. If you took out a mortgage, tossed it in the drawer, make your payments every month for 30 years without paying attention to it, then it is a liability. If you make well-timed, well-informed decisions with your loan, it is an asset.
2006-10-18 11:18:42 · answer #7 · answered by Justin 3 · 0⤊ 0⤋
If you are downsized, and can't make mortgage payments, what happens to your so called asset???Thus house, unless it's fully paid out ,is a liability to you. Equity in the house is an asset. on the other hand.
2006-10-18 06:08:53 · answer #8 · answered by Dmitriy B 1 · 1⤊ 0⤋
It's both. The equity you have in the house is an asset. The mortgage(s) you have against the house are liabilities.
2006-10-18 05:50:04 · answer #9 · answered by itsnotarealname 4 · 2⤊ 0⤋
99% of the time, its just an asset. You have fixed payments for housing (whereas rent can go up astronimcally) and you're building equity. You have stability.
My grandmother is retired and is now selling a home she bought back in '66 for $30K. Its now worth nearly $300K.
However, if you are financially strapped, a home can be a liability. You wont be able to afford to fix things-- roof, water heater, etc, if they get broken. If you owe 100% and the market dips, you could be 'upside down'. You cant just move with 30 days notice-- you have to sell.
But if you look at it as a longer-term investment, even short term dips in the market wont hurt you.
2006-10-18 06:08:45 · answer #10 · answered by Anonymous · 0⤊ 2⤋