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Question:


Is a home a good investment?
-Lebe


Answer:


Yes and no. With the very notable exception of the last half-decade or so, most homes go up in value over any sort of long run. Values tend to rise faster than the rate of inflation, and while a home appreciates, it pays a spectacular dividend: The owner gets to use it as a place to live. This aspect of homeownership should be the most important. You should buy a home because you like it as a dwelling, not an asset for making a big score, especially a quick one through flipping. Anytime that an asset whose primary purpose is something else comes to be viewed by the mainstream public as an investment – it could be a home, works of art or bottles of wine – its worth as an investment tends to diminish in a hurry. Just ask anyone who had the bright idea to start flipping houses in 2005, just as the real estate market was white-hot and about to turn down.

-Conrad de Aenlle



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