In a recent email blast, Ramit Sethi (great blogger who focuses on finance and productivity) said:
In a recent article by James Altucher, one of the best writers anywhere, he writes about why entrepreneurs should not buy a house. What I really liked was how he dug into the psychology of owning a house. Predictably, the commenters hate him.
How often do we do something or want something without considering WHY we really want it? For example, if I were to say, “Why do you want to buy a house?” and you replied, “I’m tired of throwing money away on rent,” I would reply: How exactly are you doing that? Can you show me the numbers? If you cannot do that, you are not ready to make the biggest purchase of your life
The article that Ramit linked to had some really interesting points about home ownership. I enjoy reading articles about home ownership, because it’s such a polarizing topic — people love it or hate it, often having a correlation with if they own a house. Here’s a few other articles with similar viewpoints:
I continue to be pessimistic about home ownership for a variety of reasons, including the recent volatility, the huge fees that are part of buying and selling a home, the popularity of renting instead of buying things (e.g. leasing cars, Netflix, subscription-based web applications, etc.), and the lack of unbiased observers (e.g. people in the real estate industry want real estate transactions to increase, people with houses want their house values to go up, renters want their rent to stay low, etc.).
I don’t know if I’ll buy a house or not, but it’s hard not to be intimidated by such a huge investment without unbiased support. I wish the real estate industry had some concept of a buyer’s advocate who was really out to help you. Instead, I see traditional buyer’s agents as being strongly incentivized to get you to sign on the dotted line (so they get paid) and wanting you to pay a high price (so they get a higher commission). I’m hoping innovative companies in the real estate space like redfin keep making the industry better (and I’d love to see the big, walled garden that is MLS opened up to web services).