Comments on: The Three Worst Reasons to Buy a House http://www.fivecentnickel.com/2005/11/08/the-three-worst-reasons-to-buy-a-house/ personal finance tips, tricks, and commentary Sat, 21 Nov 2009 22:51:28 -0500 http://wordpress.org/?v=abc hourly 1 By: Alan James http://www.fivecentnickel.com/2005/11/08/the-three-worst-reasons-to-buy-a-house/comment-page-1/#comment-1670 Alan James Tue, 31 Jan 2006 08:07:53 +0000 http://www.fivecentnickel.com/2005/11/08/the-three-worst-reasons-to-buy-a-house/#comment-1670 The article has some good points, but it also depends on holding period and what you want out of real estate. If you are buying it as an investment, a holding period of more than ten years will all but guarantee you a positive return. Alternately, if you are buying to sell or move within a short period, you just as safe buying a stock and will have a bit more liquidity in your investment. Alan James The article has some good points, but it also depends on holding period and what you want out of real estate. If you are buying it as an investment, a holding period of more than ten years will all but guarantee you a positive return. Alternately, if you are buying to sell or move within a short period, you just as safe buying a stock and will have a bit more liquidity in your investment.

Alan James

]]> By: Belasarius http://www.fivecentnickel.com/2005/11/08/the-three-worst-reasons-to-buy-a-house/comment-page-1/#comment-796 Belasarius Mon, 14 Nov 2005 12:18:04 +0000 http://www.fivecentnickel.com/2005/11/08/the-three-worst-reasons-to-buy-a-house/#comment-796 Hi, Good points. I'd like to comment on the rent aspect. In evaluating a home as an investment you need to subtract what you'd otherwise be paying in rent from the total cost of owning the home. Note, NOT what an equivalent place would rent for, but what you'd actually be paying for the type of place you'd otherwise be renting. What you get is the actual cost of the investment, which is the amount you'd be spending over that amount that you'd have to spend with no return for a place to live. You then do you analysis on that number to see how this investment stacks up. That is, that amount is your 'opportunity cost' money that would otherwise be free to be invested elsewhere. Hi,

Good points. I’d like to comment on the rent aspect. In evaluating a home as an investment you need to subtract what you’d otherwise be paying in rent from the total cost of owning the home. Note, NOT what an equivalent place would rent for, but what you’d actually be paying for the type of place you’d otherwise be renting.

What you get is the actual cost of the investment, which is the amount you’d be spending over that amount that you’d have to spend with no return for a place to live. You then do you analysis on that number to see how this investment stacks up. That is, that amount is your ‘opportunity cost’ money that would otherwise be free to be invested elsewhere.

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