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0 pointsepistasis5d ago0 comments

Building adequate housing also brings down the medium cost, by a lot. At worst, it prevents the median house from rising in price.

Prices are set through a combination of supply-demand and cost of providing housing. Almost all increase in housing costs are coming from land price increase, due to land shortage from planning policies that limit land use density.

Housing has been made into an investment first, and a home second, by creating housing austerity and shortage. The only way to prevent housing from being an investment is to stop the artificial shortage of housing.

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WalterBright5d ago· 6 in thread

I lost money on the houses I've bought. This is because I factor in the cost of the mortgage, property taxes, real estate commissions, maintenance, insurance, etc.

Houses are lousy investments.

epistasisOP5d ago

Are you factoring in the value of a living space in this calculation, the rent that the house generates?

When you live in your own house, it's called "implicit rent" but when you actually rent it out at market rates it's just called "rent."

There are a few housing markets where what you say will be true, but it's not true of most of the US by any means.

WalterBright5d ago

No, I did not factor in implicit rent, I was looking at from the point of view of it being an investment.

Renting a place out has other costs. Tenant damage, tenants who don't pay rent, tenants who sue you (and landlords always lose), lawyer expenses, time when it sits vacant, vandalism, advertising, having to deal with the tenants, etc.

danny_codes5d ago

You might want to revisit your analysis under more standard accounting guidance.

WalterBright5d ago

I also neglected to mention the cost of the house sitting there for months vacant waiting for buyer. I'd always price mine slightly under the market to get them sold.

As for accounting guidance, just what are you driving at? Are those expenses I listed not real? They certainly took real money out of my account!

forgetfreeman5d ago

You may be the worst real estate investor I've ever heard of. If housing was actually a lousy investment Blackrock and Berkshire Hathaway wouldn't have real estate holdings and they're both in the residential market in a big way.

WalterBright5d ago

> You may be the worst real estate investor I've ever heard of.

You may very well be right. However, everyone I hear saying how much money they made off of their house neglects to mention any of the expenses I listed.

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