j**4
发帖数: 10425 | 1 By Lou Carlozo | Reuters – 1 hour 53 minutes ago
....
Share6EmailPrint.....Rich Arzaga owns a luxury home in San Ramon, California
, but he's not betting on it as an investment.
The founder and CEO of Cornerstone Wealth Management, who bought the 5,000
sq. ft. property in 2005 for $1.8 million and has spent $500,000 improving
it, considers the abode a wonderful place for his family. But ask him to
rate his home -- or any home, for that matter -- as a financial investment,
and Arzaga balks.
"It's the American Dream to own a home, but whoever said that didn't do the
analysis on it," says Arzaga, knowing he's taking a contrarian stance to
conventional wisdom.
Examining 250 properties around the U.S., and going through close to 40
client files to project the financial impact of owning real estate versus
liquidating it, Arzaga, an adjunct professor in personal finance at the
University of California at Berkeley, found that, "100 percent of the time
it was better to rent, rather than own."
That's right: 100 percent.
The reason is simple. While a home is the main repository of wealth for many
Americans, it comes with numerous hefty expenses. The carrying costs - what
's needed to hold and maintain the asset - range from property taxes and
home insurance to emergency repairs and renovations. In a rental situation,
the landlord covers those costs, leaving the occupant free to invest revenue
in other areas.
"I don't have the emotions a lot of people do surrounding real estate,"
Arzaga says. "I have steely eyes for how investing in real estate works, and
I'd better be a prudent investor for my clients."
Owning a dream home, he says, creates a drain on other financial priorities,
causing homeowners "not to meet their financial goals. They were going to
fail."
[Also see: America's Top Turnaround Towns]
Some real estate experts thought there was some truth to Arzaga's argument,
albeit with several conditions.
"To state that owning a home is or isn't a good investment is too simplistic
," says Jeffrey Rogers, president and COO of Integra Realty Resources. "It
depends. In times of relatively higher rents, low home values, and low
interest rates, it makes sense to own a home. But in a reverse market, it
wouldn't be economically feasible. Over time, those who purchase in down or
flat markets with low interest rates come out ahead."
"Our lifetimes are a long time, and when we look over the long term, real
estate and other investments tend to have a positive return," says Jed Kolko
, chief economist at Trulia.com,
a real estate search and research website. "But when it comes to real estate
, changing your mind is expensive. There are a lot of costs involved in
buying, selling and moving. If you move every two years, it's probably a bad
investment for you. It also depends on your job market. If you're in a one-
company town and the company goes down, there goes your job and there goes
your home value."
Greg McBride, a senior analyst at Bankrate.com, agrees with one point of
Arzaga's. "Home ownership is not so much a creator of wealth as a store of
wealth," he says. "The promise of home ownership is that over the long haul,
it can rebate many or perhaps all of your costs, unlike rent, which doesn't
rebate a dime."
The trouble, he says, is that many Americans want a home so badly, they
neglect other ways to grow wealth and financial security.
"You have the other financial bases covered: emergency savings, retirement
savings, paying off debt, saving for the education of your children,"
McBride says. "There's no sense in buying a home if it's going to deplete
your emergency or retirement savings."
McBride crunched the numbers in a pre-bubble era (2004) for a home purchased
at $200,000 by a buyer in the 27 percent marginal tax bracket. Factoring in
a 30-year mortgage, $1,200 in annual home insurance, closing costs of $5,
500 and maintenance costs of $100 a month, along with property taxes, he
calculated that it would take a selling price, 10 years later, of $395,404
just to break even. His conclusion gave Arzaga's view credence: "
Homeownership may not be the moneymaker you think it is."
Then there's the emergency fund, a must for when a home requires unexpected
repair work.
"As far as emergency savings is concerned, six months of a cushion is
adequate," McBride says. "But only 24 percent of people have that kind of
cushion, and about 65 percent own homes."
So while home ownership may sound glamorous, you need a lot of money to make
it work, without much guarantee of positive returns in a post-bubble era.
Indeed, Arzaga cites himself as an example of how home ownership doesn't pay
off. His residence is today worth $1.5 million, about 17 percent less than
what he paid.
So why not sell? For Arzaga, it's a lifestyle choice, and one that he doesn'
t regret, since his big money-making investments are elsewhere. | g*******a
发帖数: 31586 | | m*******y
发帖数: 14292 | | j**4
发帖数: 10425 | 4 there are a lot of SB who wants to own ah
【在 m*******y 的大作中提到】
: 从哪儿RENT呢 有人OWN才能有人RENT
| m*******y
发帖数: 14292 | 5 wants to
【在 j**4 的大作中提到】
: there are a lot of SB who wants to own ah
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