Why do people say buying a house is an investment?

Answer 1

cuz it's eazy cash, whenevery you're in desperate need of cash, you can easily sell it off, and even if you don't intend on selling it off, the property costs keep on increasing with time, and who knows, may be it cost that you purchase it for might double or even triple in the next few years.

Answer 2

Buying a house is an investment all right. However, an investment can be a good one or a bad one. A house/property can be a good investment only when you rent it out. Plus, the rent must be higher than the mortgage in order to make you xtra money.

Investing is all about capital gains and/or positive cashflow. A positive cashflow investment is usually better than a capital gains investment. This is because you are not sure if the supposed capital gains investment will go up in value. You could just be betting/speculating that the investment might go up in value. The ideal investment is one that brings you both capital gains and positve cashflow.

Answer 3

Because a house will increase in value if you take care of it (in most cases). This will work in your benefit even if you plan to never sell it. The equity in your home is a virtual piggy bank when it comes to borrowning money for investments, college, or adding more value to your home. Your home unlike most things you buy can hold the dollar value that you have in it. How many things can sell used, for the same price or more than you paid new? How many things can you buy that you can borrow money against and still use it for the purpose you bought it for? That's why buying a home is considered an investment.

Answer 4

Because a house usually increases in value. After a certain number of years, if things have gone well, you should be able to sell the house for more money than you have put into it. That's what a good investment does.

Answer 5

Because it is.

Additionally, you can live in your house, something you can't do with a stock or a bond.

For most people, it's their only investment.

Say you buy a house for $100,000, with a $80,000 mortgage.
Let's say payments are $1000/month.

Every month, you pay down the mortgage some, let's say $100 to start, and that goes up a little every month.

Plus, every year, the house will most likely increase in value, let's say 4% per year. So after 5 years, you house will be worth approximately $120,000, and you will owe approximately $74,000, meaning your investment gain, is around $26,000.

Sure, you paid $60,000 in mortgage payments, but for that $60,000, you got tax benefits, a place to live, and $26,000 in investment return.

Answer 6

Although there are a variety of reasons that people call a home an investment, one is most common.

Because property values increase as population and growth increases, the value of a home increases (appreciates) over time.

If you sell a house after it has appreciated, you will get more out of it than you paid for it (unlike computers and cars).

However, this is only helpful if you own it as an investment property or want to move far away. Similar houses in the same area as your house will have also appreciated and will also cost more should you choose to buy one of them.

ex.

Your house: 200,000 value in 2007, and 300,000 value 5 years later.

Another house: 200,000 value in 2007, and 300,000 value 5 years later.

If you first buy "your house" and 5 years later decide to buy "another house," it does you no good that you got 100,000 extra bucks for your house because they both appreciated in value. It only helps you if you own a separate home as an investment or want to move into another house that is out in the boonies. Best of luck.

Answer 7

Because generally when you buy a house, you have it for awhile and by the times you're ready to sell, the value of it has gone up, meaning you get more out of it than you put in. Doesn't always work out that way.

Answer 8

it's a HUGE debt and can be a positive mark on your credit history IF you make payments on time. you are buying a piece of property and a home, if you take care of it and your neighbors keep up their homes as well.......Your property value increases. Some people can sell their homes for more than they originally bought them. Like when they need a bigger home or find a smaller home. When you rent the property managers make money off of you and you have no property value to show for it.

Answer 9

sometimes that word is improperly used but not in that case. a house often increases in value.