Friday Discussion: *IS* your home an asset?

[vand]

Yes, I know what Rich Dad/Poor Dad says, I know what Investopedia says, and I know what Fanny Mumsnet says.

But what's your take?

I have a view, but would like to hear others'.

 

[ilovesilverireallydo]

Not my effing house. its a cost sink. Always one thing or the other I need to fix. teaches me to buy a 35 old year property that the surveyor said is in good nick. Those buggers are terrible at giving you correct info. 

[AppleZippoandMetronome]

Given that an asset is defined as an item of property owned by a person or company regarded as having value - I would have to say that yes, a home is an asset. I certainly understand that a house can be a liability when maintenance and repairs are needed but the property as a whole will pretty much always hold some value which makes it very much an asset.

 

[Oldun]

A home is where you  choose to live. Make sure you don’t cheapskate on a proper surveyor when buying and be realistic about your circumstances and always always think of a worse case scenario before committing (there is nothing wrong with renting).That is all. It is a private place to bring up a family. If you are relying solely on a house to make you money, you are a gambler.

[KitboyE17]

Yes. But only when you own it outright and the bank no longer holds the deeds but you do. When it is 100% yours and you no longer owe a single penny on it to anyone. Only then is it truly one of your assets. Otherwise it is only collateral and not a true asset. IMHO. 

[AuricGoldfinger]

In a word. Yes

[Scuzzle]

I would have to say that owning your own home is an asset, it might cost you in maintainance and taxation but if Mazlows heirarchy of needs is food and a roof over your head being the top then owning your own roof over your head should guarantee this, renting is fine but if the day comes when your landlord says "get out", at least with your own property this is no longer a concern.

 

[flim]

the official answer is always yes, so they can collect duties from you the home owner

to some people, they view as cost of living there and sell it to move to another place

to others, they can not move or sell the home, or they would be upside down 

if you borrow money to buy it, then the asset owner is the lender

[Martlet]

Yes.

If it weren't, the bank would not loan money secured on it. 

[Quantumbomber]

Yes it's an asset over the long term.

It can also be a liability over the short term.

Depends on where you are in your life cycle and where the housing market is in its cycle.

[Bullionbilly]

Longterm i think so.

Im planning on mine been our pension, all been well... when im ready to jack work in ill downsize the house and bank 100k out of it to top up whatever else we have. 

Obviously this is all well and good in theory but who knows what' ll happen inbetween.

[JunkBond]

Sound plan @Bullionbilly. I am in the process of doing this at present.

Just having difficulty finding the right smaller property!

[Stu]

12 hours ago, JunkBond said:

Sound plan @Bullionbilly. I am in the process of doing this at present.

Just having difficulty finding the right smaller property!

Good luck with the hunt, that's about the only the average person benefits, that or moving to a less expensive area. I am concerned for my kids and future generations, will they ever be able afford anything (decent)

[KevinFlynn]

I will be inheriting half an appartement somewhen in the future and I will have the opportunity to mortgage it to buy the other half off my brother.

When I am thinking this through I am thinking about a liablity. The appartement will be at least 30 years old then without a major renovation for 20 years and there are a couple of things that are broken and would need to be repaired, not for function but to retain a value.

Then it is part of an appartement complex with which comes the responibility of taking care of the surrounding infrastructure, like repairs or needed structural changes or running costs like gardening of the premises. Due to the nature of being part of an owner group of the larger premises, these costs cannot be avoided or pushed to the next year. My parents are putting about as much away to fund these expenses as I am paying in rent for a similarly sized appartement at the moment.

So yes, there is the value of the object once I fully own it, and having that as a foundation would be nice, but thinking about having half the value of that appartement in gold seems much nicer at the moment. It is a very specific constellation, I know...

[KDave]

From who's point of view?

To the council whom you must pay council tax for as long as you live - your home is an asset.

To the bank who loan you debt-til-death - your home is an asset.

To the nursing home you will need when you are old - your home is an asset.

To the insurance company, surveyor and everyone else who takes money from you from start to finish - yes its an asset.

The person who 'owns' the house - take into account, insurance, repairs, mortgage interest, ect, ect. If you made money after inflation you can count your lucky stars and call it an asset. If not it was just another cost associated with being alive. 

[Xander]

29 minutes ago, KDave said:

From who's point of view?

To the council whom you must pay council tax for as long as you live - your home is an asset.

To the bank who loan you debt-til-death - your home is an asset.

To the nursing home you will need when you are old - your home is an asset.

To the insurance company, surveyor and everyone else who takes money from you from start to finish - yes its an asset.

The person who 'owns' the house - take into account, insurance, repairs, mortgage interest, ect, ect. If you made money after inflation you can count your lucky stars and call it an asset. If not it was just another cost associated with being alive. 

We're awe doomed a tell ye!

[KDave]

7 minutes ago, Xander said:

We're awe doomed a tell ye!

He did ask 

[Piggybank]

My partner and I own our home out right since  2002.  For us it has been a blessing. Since my heath took a very drastic turn for the worst in 2012 

Having no mortgage payments to make and known we had always have a roof over our head made us feel more secure in unknown territories

Moving forward both of us now has now got  private pensions and also have small home businesses.

For me it is an asset and always will be.

My mother always said  " make sure you have a house that you have paid for and your troubles will at least be halved "

IMOH  she was right

 

 

[vand]

Forgot to give my own answer on this...

Yes, I do think your home is an asset. As scuzzle said, it fulfills a requirement of the mazlow pyramid.

However, it is not a realisable liquid, income generation asset, so the marginal utility from your home flattens out and can even turn negative (higher maintenance costs) in a way that it doesn't with true liquid assets where the benefits are measurable and scalable.

A £5k caravan will fulfill the basic need of housing very nearly just as well as a 500k McMansion.  Whether you are an owner or renter, nearly all of us would be financially better off if we downsized and moved into a caravan... Buying and occupying excess housing beyond what is needed to comfortably provide shelter turns it from an asset into a liability, and there are studies that show that lifestyle costs tend to scale directly with housing costs.