[standel]

negative ROI on investment is the risk component of your investment. This is true of any investment. Stock being certainly higher risks than housing and still people invest a lot in stocks.

But I should have said renting is a sunk cost. There is no investment component at all in renting.

[kdamken]

Stock being certainly higher risks than housing and still people invest a lot in stocks.

I would say low cost index funds are a much lower risk investment than a mortgage. They also have the advantage of being very liquid in the case of actually needing your money. Rent is not a sunk cost, this is a common misconception.

There are many good reasons to buy a home, but do not think of it as an "investment". Compared to other investment options, it's a pretty terrible one.

I highly recommend reading this article to learn more - http://jlcollinsnh.com/2013/05/29/why-your-house-is-a-terrib...

[jpetso]

You could also look at it the other way and say you have sunk costs either way, either on rent or on running costs for your (owned) property: mortgage interest, property taxes, maintenance, opportunity cost for your down payment.

The question is how do you invest the extra leftover money: in home equity tied to the property with running costs, or in other investments (stocks, bonds, your own business)?