Comment by chii

Comment by chii a day ago

> housing is a consumption expense

only the building portion.

The land is not consumed when you live there. It only appreciates due to the developments around that land, making it more desirable and thus, more valuable.

And if the land is more valuable, then it makes sense for it to cost more - either as rent, or as capital appreciation.

> everyone gets to own a house

which is not a truth, but a want/desire. So housing is an investment first and foremost, and will always remain so.

fsckboy a day ago

if you buy a house, you are entitled to rent it out and collect that rent.

if you then live in that house, you lose that rental income. That is what you are consuming. the rest of the investment remains intact.

as I like to phrase it, when you move from a rental into a house that you own, you still pay rent.

Reply View 2 replies

scientator a day ago

The idea of rent suggests that you're paying a use fee to an owner. But if you live in a house that you own, and therefore lose the potential rental income, who are you paying that use fee to? Is the loss of potential income really the same as rent? Because in that case almost every choice/action in life involves a potential loss of income. There's probably always something more profitable one could have done with time/money.

Reply View | 1 reply
- chii a day ago
  
  > Is the loss of potential income really the same as rent?
  yes it is. The term is called cost of capital, and sometimes imputed rent. But it's not an "expense" per se like it is when you pay liquid cash to somebody for use of a capital good.
  
  Reply View | 0 replies