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inShare Is Home Ownership Overrated? After being forced out of my home on the Hudson River by Hurricane Sandy and finding myself in a rental apartment I've been rolling around the question, "Is owning a home really a good investment?" Robert Shiller, a Yale professor and co-founder of the Case-Shiller Home Price Index, is famous for making provocative comments on house prices. He recently delared on a Bloomberg TV interview that home ownership was "a fad...that took hold in the early 2000's." Home ownership, in my view, was never a fad, even in the go-go days of the early 2000's. My parents whole heartedly embraced home ownership as both a dream and an investment. They owned our home and we lived in it for 27 years. They both worked, paid it off early, lived in it for years without mortgage or rent payments, and sold it at a profit of 460%. I think even Mr. Shiller could appreciate an investment like that. There are several reasons I see for owning a home as an investment, probably the biggest investment a person can make. Owning replaces an expense, rent. Renting offers no potential for a return on your investment. Some experts state that over the last thirty years, renting has been cheaper than owning, and that if you invested the difference between your rent and your mortgage payment you'd be better off financially. The problem with that argument is that this isn't thirty years ago. In today's market, renting is MORE expensive than owning. And the reality is, very few people actually would invest that extra money if they had it. The other big advantage to home ownership is its tax implications. Cashing in $250,000 in profits on Microsoft stock carries with it a substantial cost in capital gains taxes. Selling a home, while not as liquid, is excluded from capital gains taxes up to the $250,000 limit. If you and another person owned the home jointly but filed separate returns, each could exclude up to $250,000 in capital gains. But here's the wrinkle I've been thinking about, now that I'm a lot closer to retiring age than I am to voting age. I think it makes sense to own the home that's where your heart is, and rent the home near where you work. In other words, buy where you would likely retire. Use it as a vacation home, a summer place, or rent it out for added income. In today's economy, where fifty is the new unemployed and where today's employee could be transferred or, worse, looking for work tomorrow, investing in a second home as a "retirement" place seems like a good idea if you can swing it. It carries all the benefits of owning a home, and will always be there as a fallback when you need it. What do you think? Is home ownership overrated? Remember, you can't live in your IRA. Owning a home as an investment makes financial sense for many Americans today. Originally posted at To own or not to own; that is the question The GPS Real Estate Team are Multi-lingual Professional Realtors & Relocation Specialists. We are Experts in Relocation and Assisting Buyers and Sellers in the Hudson Valley Region of New York State. We Welcome Referrals & Reciprocate Wherever Possible. Visit our Website for Local Listings and Area Information on the Lower and Mid-Hudson Regions of NY from Manhattan to the Catskills including Rockland, Orange, Sullivan, Ulster, Dutchess & Westchester Counties. Global Property Systems Real Estate LLC | Head Office: 680 Piermont Avenue | Piermont NY 10968 | USA Servicing: Manhattan, Rockland, Orange, Putnam, & Westchester Counties, NY, Bergen Co, NJ. & Connecticut Mid-Hudson Valley Office: 138 Dusinberre Rd, Gardiner, NY 12525 | Servicing Ulster, North Orange & Dutchess Counties, NY Manhattan Office: 370 Central Park West #340, NY NY 10025 Contact Us Buyers/Renters: 845 848 2218 | Sales: 845 680 6207 | Commercial Services: 845 825 2828 | Fax: 845 613 7223 Mid Hudson Valley Office: 845 728 9050 - Manhattan Office: 212 866 7934 Email: info@wesellny.com Our beautiful photography is courtesy of house photographer Andre R Aragon Posted by Vanessa Saunders Hudson Valley New York on 07/22/2013 02:58 PM Comments (53) Tips and Advice in the Home Buying Channel home ownership Generate short URL Post is included in group: Diary of a Realtor Post is included in group: Bartender, Make it a Double Post is included in group: Realtors® Post is included in group: Blogging & SEO 53 Comments on Is Home Ownership Overrated? 20 Most Recent Comments Displayed Show All « 1 2 3 » JUL 23 2013 With ownership comes many responsibilities, taxes, insurance, maintenance, HOA fees, special assessments, etc. Sometimes depending on time frames and work it may make much more sense to rent. With the political world up side down, I am not so sure we can count on the tax deductions of mortgage interest always being there either. It is generally much easier to buy than to sell, and when they sell there are always costs of sale to consider. Real estate people often tend to think everyone who can, should buy. This is simply not a fact. Chris Miller Nevada Land with Water Rights, Land with Water Rights For Sale (Vegas Grand Realty and Property Management) 8:49am • #35 You made me immediately think of the place my parents rent each year in FL for 3 months. I've asked "why not just buy a place?". But when they close the door to come back home, they leave any potential for worries there too. Great topic! Brenda Mayette (Miranda Real Estate Group, Inc.) 9:05am • #36 It is a great investment when not used as an ATM and the equity is spent away. ownership is not for everyone, but thos ethat do it right, enjoy the benefits Scott Godzyk, One of Manchester NH's Leading Agents (Godzyk Real Estate Services) 10:02am • #37 Owning a home is not overrated, and it you have the right plan, mindset and help, it can be extremely rewarding. It isn't something that can be rushed, it must be at the right time with the right plan in mind.