Buy a home? I don't think so.

AMEN!

I knew you used TF all the time!

An older couple here in Fountain Valley just sold their home.  They live right behind Valorie.  They bought their house 42 years ago (42 YEARS!) for $27,000.  They just sold it and are moving to Arizona.  They sold the home for $615,000.  Sounds great!   But.. before you do a dance, you should subtract all the costs of owning it. Property taxes.  Etc etc.  So I bet the net-gain is nowhere near $600,000.

Another option... if I had invested that money, and bought ANY stock...  42 years ago, I think I'd be a little bummed if I had only made $600,000.  After 42 years.

Geoff is the house next door to you for rent?

Yep.  Huge yard.  Updated interior. 

Go for it Seany!!

Thats a gorgeous home, very updated. Smaller home (like most homes in  So Calif that are rent affordable), but on a very nicely sized lot. It rented quickly on the rental market. Yes, I would certainly rent now if I were younger. The benefits far outweigh the disadvantages in the sorrowful real estate market, especially in California.

Did you guys read the comments that followed the article?

I'm not sure I would take anything that Elmer in the video says seriously.  I have to agree with what many of the people said in their comments.  I rented for several years and it seemed like nothing but a pain in the arse.  Twice kicked out simply because the landlord was moving back and ending my lease early.  Dealing with shoddy, cheap repairs done by the Landlord's 14 year old nephew, not being able to do any modifications, getting charged $500 for a missing curtain strap thing etc. etc.  If you're absolutely upside down in your mortage it's one thing, but it doesn't make any sense to me to be paying someone else's mortgage for them. 

I think the main point here is to get rid of the intense pressure that we all feel/felt at a certain age to get into a house, no matter what.  It's not as clear cut as has been viewed for 100's of years.  It's a good, slow method of creating some equity for the future, but it shouldn't be considered a good investment.

If I'm paying $1600 a month for 30 years, and at the end I have $300,000 to show for it, minus all my costs of owning, so really probably closer to $200,000, thats not a great "investment".  That means I turned $576,000 ($1600x30x12) into $200,000, and waited 30 years to do that??   You could make a lot better money elsewhere, for $1600 a month for 360 months.

Also, I realized I would never save that money if I was renting.  This way I have a forced savings account within my home--if bought and sold at the right time which isn't always the case.

It shouldn't be viewed as an investment in my opinion.  You should buy a house with the idea to "buy" it and own it after you pay off the bank debt.  Not hope for equity, instant riches, etc.  Buy it and pay it off as soon as possible. 

The problem isn't owning a home, it's the credit you take out to pay for it.  Think about it, you pay WAY MORE in interest than you do for the house... by far!  But that's the WAY we're taught to purchase a home, 20% or even less down, borrow a huge chunk, make payments for 30 years.  If you looked at people who have paid cash, or mostly cash, for a home, you'd find their investment return is much higher.  Or even just for folks who pay down their principal faster than the schedule.

very good point, Leroy Brown.

That's why I paid cash for my home with all the money I made picking berries and washing police cars in Lebanon.

Hahaha! Sean, you're a funny guy, you know that? I'm kind of with Scotty on this one. I think there is also the "emotional investment" to take into consideration. Feeling ownership and belonging is pretty awesome. I love the fact that my son is growing up in OUR house and that we're creating this home together with every fix, change, etc that we do. That's definitely part of what I'm buying when I pay my mortgage every month, you know?

BTW, I think it's muslims that don't believe in paying interest.  I had a previous muslim co-worker who told me he had an interest free loan because it was against his religion.  I don't remember exactly who it was that financed him but it was some sort of underground muslim bank or something.  I need to be muslim.

Does Amex offer a Costco Muslim card? 0% does sound pretty attractive, even if I have to face east and pray on a mat a few times a day.