Is Home Ownership Overrated?

Posted January 26th, 2010
by Staff (1 comment)

castleThere was a time, thankfully long past, when owning land meant you were a member of the elite in society. The “landed gentry” were the ones who made the rules, who owned the means of production and who had the most rights. Home ownership was more than just a status symbol or an investment. Owning a home meant that you led a different, more privileged life. Home owners were first class citizens, while those that rented were living their life in coach.

Today, that’s changed. Some of the most powerful and wealthy people on the planet don’t own homes. They simply rent apartments or homes all over the world. You can be the most successful person in the country today, and whether or not you own a home has no bearing on your success.

So, why own a home? For status’ sake? Perhaps there is still some pride in owning your own home, as opposed to renting. Homes as investments are iffy right now, at best.

Here are some reasons home ownership may be overrated, and why it may be disappearing:

  1. Maintenance and care. In today’s society where most families have two working parents, finding the time to keep up the home and yard can be a challenge. Most people who own more than an acre or so are likely to hire someone else to mow their lawn, for example. While gardening may be cathartic and something you enjoy, the basic activities involved in home care can be a drag.
  2. Homeowners insurance. The fact is that renters insurance is a heck of a lot cheaper than homeowners insurance. If disaster strikes and you lose your house, you can lose some of your equity depending on home values. If disaster strikes and you lose your apartment building, you can replace your stuff and move into a different apartment building.
  3. Home ownership doesn’t make you any happier. A recent study supports the idea that owning a home doesn’t necessarily reflect a happier life or one of a higher quality. You can be just as happy renting as you can if you own a home.
  4. Home ownership doesn’t provide stability to a society. Take, for example, Switzerland. Home ownership is at around 35 percent in Switzerland, yet the country doesn’t seem to be about to fall apart.
  5. Homes are no longer secure investments. It used to be that the home was a person’s biggest investment and largest source of savings. The housing crash has taught us all that this isn’t necessarily the case.

Photo via PhillipC

Categories: Home Value

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  • Posted February 4th, 2010 by Bruce at 11:18 am - Reply

    Every time there is a down market people come out saying the sky is falling and homes are no longer a secure investment. Well they are still much more secure than stocks or other alternatives. In addition they provide tax benefits, offer a place to live which you would need to pay rent anyways. Historically those who invest in real estate over time become very wealthy. I know many people who have used real estate investments to become very secure.

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