[RHSeeger]

> As long as you ignore all the other aspects, like inflation, maintenance, etc, you have a pretty darn good return on paper.

That's a pretty significant amount of things to ignore. When you include closing costs (10-15k in NY) and insurance, you're underwater on your house for a pretty long time.

[mitthrowaway2]

Insurance and maintenance are costs of shelter, though. That's an exchange for the benefit of enjoying a roof over your head -- it shouldn't be considered a financial loss from an investment perspective. If you were renting out the property instead of living there, the renter would be paying those costs through their rent.

[RHSeeger]

My apologies, I meant interest and maintenance.

And I would say that maintenance certainly counts as a financial loss when you're considering the property from an investment perspective. If it was a paper investment (stock/bond/whatever), it wouldn't exist. It's part of that specific investment.

[mitthrowaway2]

My point is that unless you're living in the woods, you have to pay for maintenance. Maintenance has a cost, but not an opportunity cost. If you choose to invest in tech or gold or whatever instead of a home, then you're still paying indirectly for maintenance for whatever structure you're occupying.

At least as a homeowner you do have the freedom to advance or defer certain maintenance work according to your budget.

[staplers]

  If it was a paper investment

Those have "maintenance" fees too at most brokerages.

[bombcar]

And even if they don’t, there’s still maintenance somewhere being paid by someone.

Some are lower maintenance than others (physical gold you have to secure, etc) but everything needs at least some work to keep from wasting away.

The point is that the simplistic “I made money selling my house” takes into account few if any of these costs (many which can be accounted as valid for the need of shelter).

[mulmen]

I rent. I pay something like $15.00 a month for insurance. My basement flooded and my landlord had to pay for an emergency plumber. It’s “built into the rent” but I still don’t have to bear the cost. My landlord assumes the risk of being ready to cover an expensive maintenance item.

[xyzelement]

Yes but you compensate them for this risk via your rent.

[chiefalchemist]

The landlord gets equity in the property. The tenant get freedom, peace of mind, etc.

It's a question of priorities and personal values.

[mulmen]

Yes, at about half the rate a mortgage on this place would cost.

I put those savings into investments that aren’t stored outside.

[paulddraper]

Historically, conventional wisdom has been two years to recoup the overhead.

Obviously depends on market volatility, and I've no idea if there's a more accurate # now.

[zdragnar]

I've heard 5-7 years, but that may be with much lower than the 20% down.

[bombcar]

7 years is the usual estimate in a “neutral/slow” market because it usually costs 10% to sell (realtor fees, etc).

Of course if appreciation is going up more than 10% you can profit much faster, or you have flipping techniques to avoid frictional costs (like being your own realtor).