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The Absolute Insanity of Not Buying a Home When You’re Young
(www.riskology.co)
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this post was submitted on 31 Aug 2023
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I think his math is questionable and his logic even more so. My house costs about 10% of the value of the house. About half is capital opportunity cost and the other half is maintenance, taxes, and utilities. This is a cash purchase and never goes away.
Sure if you rented the same house it should be cheaper to buy. Generally one does not do that. I rented a much smaller place then I purchased. Then there is the a risk. If you buy in an up market and you have to move in a down market especially a one company town there that business went bad you are skewed.
Not saying no to home but there are many considerations. In the end it is a total numbers game. What are your exact alternatives. Then places to live including a house you own is a cost center not an investment. So cheapest apartment and smallest house is generally better.
From what I understand, at least in the US, you can write off home improvement costs in your taxes if you're willing to itemize. It's not for everyone of course, but for people who spend a lot of money improving their home, it could help reduce the financial burden.
This is effectively not true.
Any capital improvements to your home add to the homes “basis”. When you sell, your gain is the sales prices of the home less the cost of the home less capital improvements less cost of the sales. The US already allows for a significant exclusion on the gain on the sale of a primary residence from income taxes so overwhelmingly nobody will get a tax benefit from a new roof or bathroom or whatever.
No. Only adjusts basis when you sell. There are tax benefits and a lot of them. Some general but a lot very specific. Lot depends if you make money on the property. My house I have had 20 years. Maybe made 1% a year return while the cost is 5%. Typical house returns are about inflation though mine is less. Typical investment return in the market though are 5 to 10% above inflation.