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Why buying your own home is not an investment but a liability

Posted by Arthur Peter on

Why buying your own home is not an investment but a liability

The problem with buying your own home is it doesn't generate any income. You are the one paying the rent. As long as you have a job that is fine and probably a good way to get started with getting your first real estate property.

However, the problem is you have to keep your job otherwise you can't pay your mortgage.

The whole purpose of investing is to generate more and more income and to keep your cost low. So eventually you will generate more income through your investments than the expenses you have.

This is the reason why buying your own house is not considered an investment but a liability.

Your own home is not generating any income, rather it is creating more expenses. For example maintenance, taxes, etc.
So if you are looking at your investment portfolio, the amount you create to generate an income .. it is better not to add your own home to it. Since it is not generating any income.

Althought in the long term once you paid off your house it could save you a lot of money and make your living expenses much cheaper.
However it is not considered to be part of your investment portfolio.

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