0

The time I became more aware about my finances was when I was in college where I have to find a way to get myself though school by myself. I rented a room near my school. Each time the day comes for me to pay for rent, I realized more and more the importance of having my own house. I always thought that a house is an asset until this year when I read several posts from social media that a house is not an asset but a liability. It made me so confused. How is that?

Is a house really a liability and not an asset?

Christine Tibig Vickers
  • 95
  • 6
  • 2
    A house is an asset, but an asset that depreciates. The only reason a house might appreciate if you put a regular stream of money into it, maintaining it in good condition. Then it wouldn't appreciate naturally but by putting money into it. If a house today is 10 years old, in 50 years it will be 60 years old, i.e. it needs major repairs. Remember every house price index reflects an average house. If an average house today is 40 years old, in 50 years an average house will still be 40 years old. Thus, the value of your house doesn't follow the house price index. – juhist Dec 06 '22 at 06:49
  • I highly recommend trying to get actual information from posts on Social Media. – Hilmar Dec 06 '22 at 11:15
  • 2
    Be aware that the land value and the house value are two totally different things, but there is often confusion around this. – Fattie Dec 06 '22 at 16:22
  • Is a house an asset or a liability? YES!! But it’s more an asset than a liability (unless you’re stupid and “buy high” with no money down at the peak of a bubble). – RonJohn Dec 07 '22 at 04:36

0 Answers0