By: MJ Gonzales | Executive Chronicles
Every human needs a decent shelter and these days, it’s quite expensive. Despite of that many are able to build their own and afford two or more houses. However, some experts say people should not consider buying houses as an investment or at least the easier one.
According to Times’ report, buying a house is not skyrocketed money-making venture. You’ll not earn fast from it, except if you decide to make or part of your property for rent. Two of the reasons for this are the slow appreciation versus the fast inflation rate and the expensive transaction costs.
While many has clear ideas about investing, buying a house is confusing one since it has two purposes as per New York Times. People see it a place to live and financial asset. However, the NY’s report explained that money from stocks and securities are easier to get with just few clicks or calls away than selling a house.
“On a purely financial basis, owning a home is generally more profitable over the long term than renting. But I believe an expensive home is generally not as good an investment as an inexpensive one — not considering the alternatives,” NYT writer Jeff Brown shared.
On his blog, Rich Dad Poor Dad author Robert Kiyosaki explained that a house can’t be an asset, but a liability. Kiyosaki added that it’s people such as real estate agents who think buying a house as an asset. He suggested that instead of relying on getting profit from appreciation, people should find ways to increase their cash flow.
“The simple definition of an asset is something that puts money in your pocket. This is accomplished through four different categories, one of which is real estate. When I say real estate, I don’t mean your personal residence, which is a liability. What I mean is investment real estate, which is a great investment because it puts money in your pocket each month in the form of rent,” the financial expert and businessmen shared on his blog.