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The American Dream has been Hijacked

By
Real Estate Agent with HousingStorm.com

schiffPeter Schiff has been right about housing, but wrong (so far) on inflation.

Here is a video by Peter Schiff, explaining homes-as-shelter vs. homes-as-investments.

I agree with most of what he says in this video.

The only parts that I disagree with him on have to do with the dollar and his expectations that other countries will fare better.

 

 

I agree with Peter Schiff that the best way to look at your own home is as a shelter, not an investment. Here are some highlights:

I don't think rental property is a particularly good investment right now in America...because the problem with rental property is rents are determined by the relative affluence, or the ability of potential tenants, to pay. And in a recession, with people losing their jobs, and with the dollar losing value, I think Americans, in most parts of the country, are going to become poorer tenants. So if you really want to invest in income property, you should look at other parts of the world, where living standards will be rising, where currencies will be gaining...

I agree that rents are likely to fall. I disagree that the rest of the world will to better. Housing bubbles are everywhere. And, the weak-dollar-inflation theory is, so far, just a theory. We are in deflation right now and the dollar is due for a bounce. Remember, the dollar gets strong or weak vs other currencies. Those other currencies all have problems too.

Depending on what happens with the economy and the real estate market, I think many, many houses are going to be selling for a lot less than the cost to construct them..

Agreed.

But what people need to know about real estate is that, while land may appreciate and may depreciate, the structure never appreciates. The structure always depreciates as you wear it out, as you use it up. Things are no longer new. And also, tastes change, things become dated.

This is an important point to remember: a house is consumable. It won't last forever and will need constant updating and modernizing for the structure to maintain it's value over time.

The idea that somehow if you're renting, you are throwing money away, but if you're buying somehow you get a free ride...you can't get out of paying for shelter. You're going to pay for it one way or another. You can rent it or you can own it, but either way, you're spending money. You're not making an investment. You need a place to live and you're making a lifestyle choice as to how you want to do it. ...But if you want to invest money, if you want to build for the future, it's not going to happen because you own a house and occupy it. ...The idea that owning your principle residence is an investment is a concept that was foisted on us by the real estate agency who as also hijacked the American Dream and turned the whole concept of the American Dream into homeownership...it's not. That is not the American Dream. That is not how you get rich in America.

Branding homeownership as the American Dream is one of the most successful ad campaigns in history. And that's what it is...an ad campaign.

This article originally appeared on www.housingstorm.com

Comments (1)

Greg Fielding
HousingStorm.com - Danville, CA

You must be a great REALTOR because you just wrote 6 incoherent sentences with nothing actually to say. You used big words, couched your opinions, and, in the end, said nothing.

God help us.

Oct 28, 2009 03:18 PM