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Buying a Home is an Investment

By
Services for Real Estate Pros with R & D Art

I recently received a comment on one of my outside blogs that talks about a home being either a liability or an asset. They stated that a home that is currently being rented out to be an asset and a home that is used as a primary or secondary residence to be a liability. Personally, I agree and disagree.

First, lets take a look at what dictionary.com states for both liability and asset:

OK, now that we all are on the same page as to what is a liability and what is an asset, we can move forward.

Frankly, when you are buying a home, you have to look at it as an investment and not a liability. Home ownership is truly an investment into your future. It is a savings account that will either retain, gain, or lose in value based on many factors. However, if it is kept up over the years and even improved on, then more than likely, by the time that you have finished paying on the home, you will have a cash cow of an invesstment on your hands.

Bottom line, owning a home is owning an asset that has a liability attached to it. Once the liability matures, you have an investment that can help you retire.

Vickie Nagy
Coldwell Banker Residential Real Estate - Palm Springs, CA
Vickie Jean the Palm Springs Condo Queen

It's interesting but true that many people now look at their home more as a part of a financial portfolio without regard to the lifestyle implications bestowed by home ownership (PRICE-LE$$)

Feb 05, 2009 07:07 AM
Paul Silver
Tiverton, RI
Rhode Island full service real estate firm

And as with all investments, there is some risk attached to the asset/liability... thus while homes may be worth somewhat less nwo than a year ago, that is true of most investment vehicles these days... but they are still investments never the less.

Feb 05, 2009 07:26 AM
Danny Thornton
R & D Art - Knoxville, TN
WordPress Guru

Vickie, home ownership is a big financial step and one that needs to be carefully thought out.

Paul, you are correct. Look at the BofA stock prices. Whether the home value sinks or rises, it is still where I would make my investment today.

Feb 05, 2009 07:31 AM
Rich Dansereau
Positive Real Estate Professionals - Knoxville, TN

I think rental properties show a monetary return on the investment (hopefully) on an ongoing basis whereas the return on a primary residence is generally more of an emotional and family security return. Both are great investments with beneficial returns.

Feb 05, 2009 08:26 AM