{"id":16146,"date":"2012-08-03T13:12:57","date_gmt":"2012-08-03T20:12:57","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=16146"},"modified":"2012-08-03T13:12:57","modified_gmt":"2012-08-03T20:12:57","slug":"primary-home-investment-or-liability","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/16146\/primary-home-investment-or-liability\/","title":{"rendered":"Primary Home – Investment or Liability"},"content":{"rendered":"

Pre-2007, I am not sure this topic would have even been controversial; people not only regularly utilized their home as their “primary investment”, but often, treated it as their personal piggy bank.\u00a0 In hindsight we can all judge others as we secretly lick our own wounds from a vicious downturn no saw coming, but that experience left a visceral taste in many mouths.<\/p>\n

Most experts would suggest that your primary residence is not<\/em> an investment.\u00a0 Why, you ask?\u00a0 First, you purchase a home based on need.\u00a0 Your buy and sell decisions rarely spring from analytical thinking around market timing.\u00a0 Instead, most times, they are rooted in your changing life needs.\u00a0 Second, investment strategy wages a secret war with your personal desires.\u00a0 For example, I want a tricked out man cave equipped with a full wet bar, bathroom and other appropriate amenities.\u00a0 Am I thinking about the return on my investment, or the endless joy my friends and I will have watching football on Sunday, Monday and Thursday?\u00a0 Sure, I will likely increase the value of my home with these upgrades, but the anemic return on investment, if any, would never be worth the money.\u00a0 Said differently, would you make the same upgrades to your rental property; probably not.<\/p>\n

If it was that easy, I wouldn\u2019t write the article.<\/p>\n

I will start with a question.\u00a0 Is it easier to invest in stock or buy a house?\u00a0 Right now, Berkshire Hathaway Inc. (NYSE: BRK.A)<\/a> trades at $128,175 per share.\u00a0 Its five year performance has been strikingly similar to the performance of many real estate markets.\u00a0 If you have a job making $50k and $7k in the bank, do you think you will ever in your lifetime own a share of Berkshire Hathaway A outside of a very lucky lotto ticket?\u00a0 The answer is unequivocally no.\u00a0 You don\u2019t qualify for the right to buy on margin and even if you did, where would you get the 50% required to do a margin buy?\u00a0 And how would you live on the prison food when the margin call comes?\u00a0 All important questions to consider\u2026<\/p>\n

Now, let\u2019s take that same fellow Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Pre-2007, I am not sure this topic would have even been controversial; people not only regularly utilized their home as their “primary investment”, but often, treated it as their personal piggy bank.\u00a0 In hindsight we can all judge others as we secretly lick our own wounds from a vicious downturn no saw coming, but that […]<\/p>\n","protected":false},"author":16,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[379,8,26,5,28],"tags":[],"class_list":{"0":"post-16146","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-innovation","7":"category-investment","8":"category-lending","9":"category-real-estate","10":"category-retirement","12":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":2418,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/2418\/florida-first-certainly-california-next-nevadaand-absolutely-arizona\/","url_meta":{"origin":16146,"position":0},"title":"Florida First, Certainly California, Next Nevada,and Absolutely Arizona","author":"Brian Brady","date":"December 24, 2007","format":false,"excerpt":"Lenders don't love us no' mo'. Want a vacation crib in Miami? How about an investment property in Orlando? Show up with 40%, no seller carry-backs allowed, thankyouverymuch. This e-mail came in this morning from IndyMac Bank : Florida Guideline Restrictions Transactions securing properties located in the state of Florida\u2026","rel":"","context":"In "Investment"","block_context":{"text":"Investment","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/investment\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":4477,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/4477\/alex-ill-take-irony-for-600\/","url_meta":{"origin":16146,"position":1},"title":"Alex, I’ll Take “Irony” for $600","author":"Sean Purcell","date":"September 17, 2008","format":false,"excerpt":"The government is now in the mortgage business and the insurance business.\u00a0 I am sure others will expound on the AIG debacle and all of its implications in due course.\u00a0 I just wanted to point out the something that should make me laugh so hard it brings a tear to\u2026","rel":"","context":"In "Investment"","block_context":{"text":"Investment","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/investment\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":645,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/645\/home-buyer-always-liable-for-mortgage\/","url_meta":{"origin":16146,"position":2},"title":"Home buyer always liable for mortgage . . .","author":"Greg Swann","date":"November 17, 2006","format":false,"excerpt":"This is my column from today's Arizona Republic (permanent link). No fireworks, today, just real estate. Home buyer always liable for mortgage I got a great question by e-mail. It's really a lender question, but it introduces a number of interesting topics. \"Are homeowners personally liable for their mortgages? If\u2026","rel":"","context":"In "Ask the Broker"","block_context":{"text":"Ask the Broker","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/ask-the-broker\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":4576,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/4576\/what-happened-fannie-mae-and-freddie-mac-exploded-and-many-bystanders-were-injured-in-the-blast-some-fatally\/","url_meta":{"origin":16146,"position":3},"title":"What happened? “Fannie Mae and Freddie Mac exploded, and many bystanders were injured in the blast, some fatally”","author":"Greg Swann","date":"September 22, 2008","format":false,"excerpt":"Things fall apart: Kevin Hassett at Bloomberg.com is getting death threats over this news analysis:The financial crisis of the past year has provided a number of surprising twists and turns, and from Bear Stearns Cos. to American International Group Inc., ambiguity has been a big part of the story. Why\u2026","rel":"","context":"In "Group Therapy"","block_context":{"text":"Group Therapy","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/group-therapy\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":50,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/50\/surfing-a-twenty-year-wave-in-the-desert\/","url_meta":{"origin":16146,"position":4},"title":"Surfing a twenty-year wave in the desert","author":"Odysseus","date":"January 28, 2006","format":false,"excerpt":"From the Las Vegas Review-Journal:For the next 20 years, some of the weightiest issues for home builders will be figuring out where baby boomers really want to move, when and if they sell their homes, and what type of housing will they desire, be it city-center high-rise condo, beach house,\u2026","rel":"","context":"In "General"","block_context":{"text":"General","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/general\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":5011,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/5011\/peter-schiff-our-leaders-irrationally-promoted-home-buying-discouraged-savings-and-recklessly-encouraged-borrowing-and-lending-which-together-undermined-our-markets\/","url_meta":{"origin":16146,"position":5},"title":"Peter Schiff: “Our leaders irrationally promoted home-buying, discouraged savings, and recklessly encouraged borrowing and lending, which together undermined our markets”","author":"Greg Swann","date":"October 16, 2008","format":false,"excerpt":"Peter Schiff in the Washington Post:Amid the chaos of recent days, as the federal government has taken gargantuan steps to stabilize the financial markets, realigning the U.S. economic system in the process, comes a nearly universal consensus: This crisis resulted from government reluctance to regulate the unbridled greed of Wall\u2026","rel":"","context":"In "Big Mother"","block_context":{"text":"Big Mother","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/big-mother\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/16146","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=16146"}],"version-history":[{"count":1,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/16146\/revisions"}],"predecessor-version":[{"id":16147,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/16146\/revisions\/16147"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=16146"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=16146"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=16146"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}