Home as investment? Not so much
Jonathan Clements, the great personal finance writer for the Wall Street Journal, is leaving journalism. In a parting “Getting Going” column, he referred to some of his columns that received the most feedback from readers.
Among them was “How Houses Eat Money” from June 2005. The upshot was that our homes aren’t the fabulous investment vehicles they’re made out to be. That was a risky thing to say in mid-2005, when home prices were soaring through the roof. Clements used his own New Jersey home as an example, showing after 13 years he basically broke even. That’s after factoring in mortgage interest, home improvements, property taxes, insurance and other costs.
The benefit of home ownership comes from not paying rent for all those years and when the mortgage is paid off, living rent-free for the rest of your life.
There’s lots to quibble with in the column, but it makes for very interesting reading.
