You can make 4% because you have resources to do so. I certainly wasn’t making then, what I am now. Things where so good at that point for me that I refinanced my home, paid off a car and remaining college debt and then spun it (my home) for a profit. Most people don’t save money or invest it wisely in funds or stocks (if you even can do that wisely). It is just a small percentage of people. And, the saying holds true, it takes money to make money. You really have to own 1000’s of shares of anything to make any money in the market. Land and real estate are relatively finite. Clearly, prices get driven up because of demand and the fact that there is only so much of it in a certain condition. I would like to rent all right…to other people. Because they need places to live. People need to eat too. I would like to invest in food related ventures as well. When I started my restoration business, I rented 24 ft trucks to move my stuff and demolished materials. I never could count on getting a truck when I needed it, it was expensive to rent over multiple jobs and you couldn’t pass that on to the customer. Restoration numbers are done according to Xactimate. You really can’t cost this out in a job and have insurance pay for it. So, I bought a truck. It is always available, paid for in a year, so huge write-off as well as the miles each year. Renting cost way more over a year in time and money. I get where you are going with costing it all out. But you really only can do that on the back end, if you already have resources. Renting kills young, up and coming families whose pay is not at their top end yet. Ownership and equity are better. If you are older and established, at the top of your lifetime earning scale, I can see where it makes sense for you. Younger families, not so much. I spun it into fast money that allowed me to take a step forward. You can only do that if you have saved resources or the home you are selling increases in equity and value. There percentage of folks who truly save and have any bank account is small. I think you will find that in the research.
The value to someone… as you all say regularly, is basically what they are willing to pay for what they want.
You are correct. Homeownership is a type of motivated savings plan.
Homeownership is also good for building equity if you are handy around the house. It’s sort of like InterNACHI’s free online courses, but instead of investing in your education whenever you want in the evening, you can invest in your home equity whenever you want in the evening by improving your home.