Music to my ears...article describing why NOT to buy a home.

11 Replies

I'm sure this will hearten landlords everywhere...

Haha. I'm fine with articles like these being published. :)

Thanks for sharing this article.

The author has cherry picked the pieces that negatively supports his line of reasoning.

Additionally, there is no guarantee that everyone who invested in stocks would see a positive return as quoted.

So, it depends on the drive, plan, creativity and mindset of the individual.

It's a known fact that most of the millionaires made/secured their wealth through RE and not the stock market.

Looking back at the author's path to home ownership, he could have re-calibrated his steps and do creative REI investing to make himself whole.

The author's story sounds like a good one to tell, generate laughter and lively conversations, but, I am not convinced with his line of reasoning about home ownership.

The article is called "Buying a house was the worst financial decision I ever made" not "why not to buy a home."

The article is actually very good advice for people who buy primary houses for the wrong reason.  James Altucher published a very similar article a few months ago.

Buying a house to satisfy social constructs is inherently different than buying property with investment in mind.  A person buying a house simply to appear more adult is making the same mistake as a person who buys and finances a luxury car outside of his/her budget.

Originally posted by @Colin Smith :

Haha. I'm fine with articles like these being published. :)

 Same here, the more folks out of the housing market and renting, the happier all the landlords on Bigger Pockets are!

Also, no s*** the author of that article lost money, he bought at the top of the hype in '06!

Pretty accurate article really. Houses as primaries are lousy investments. The guy isn't claiming that real estate is a bad investment market, just that a primary isn't a good investment; which is true. 

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I also prefer to not live in a place that I own.  Anytime I did that, I ended up moving and renting it out because I felt like I was wasting money.  For me, its always been less expensive overall to rent a place to live.  

in my market its cheaper to rent than to own.  Part of the reason I decided to invest in rental real estate wad that I wanted to be able to pick an investment for purely financial reasons and leave the emotional and social influences out of it. I've made a cocos decision to rent my personal residence in the market I want to live at a price point I can afford and to own in a market that makes sense in a property that makes me money. 

Misplaced bias is an affliction opportunists jump on!!!

I remember getting a lecture years ago from a (nepotically promoted) exec at a company we were consulting on. He discovered I held a number of highly leveraged properties with mtg rates @ 18% (after he saw the excessive amount of paid overtime some of us were collecting).

He had lost a lot of money on REI so was understandably biased, but coincidentally he also ran one of the worst departments we had the misfortune to revamp & attempt to make fiscally viable.

I think this article is actually spot on & calls out the bigger issue that a lot of people buy houses that they think they can afford only to become house poor.  I was a Mortgage Originator for about a year & I can't tell you how many people would come to my office & say "how much house can I afford?".  This was a huge learning opportunity for me because I learned more of the hidden costs of home ownership that don't show up on the bank loan papers.  People need to take pencil to paper to figure out there expenses before purchasing as much house as they qualify for.

This article doesn't talk about the true investor piece either - if you are buying to create passive income, then that is different vs. just buying a home for you own use.  Passive income is the only way to go to help you build a real estate empire (if that is what you desire).  If thinking like this article continues to grow, then being a true real estate investor is a great place to be:)

As a home owner too, this article is actually very depressing because it breaks the reality of home ownership.  Gotta figure out how we can create some income off of our existing home . . .

@Mary lou L. - thank you for posting this article.  I found it very interesting

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