Owning a House is a Liability NOT an Assett !

@deeeky (3669)
Edinburgh, Scotland
March 30, 2008 3:59pm CST
If you stop working today an asset puts money in your pocket whereas a liability takes money from your pocket. There are far too many people call liabilities assets. There is a big difference between the two don't you think?
1 person likes this
4 responses
@StereoDiva (2143)
• Canada
30 Mar 08
A house is an asset. If it's not, all the banks in the world are confused. Plus, the only sure investment is real estate. I'm not talking a 5 year investment, but if you have a house for 15 years, you can certainly sell it for much more than you paid for it. It's not near as risky as stocks, etc. I guess if you consider a house a liability because you have to pay for it, then you would consider investments the same because it was your money that had to go into them, same with a car, etc, etc. If you stopped working today and sold your house, you would make money... unless the economy is poor. If that's the case, sell a few years later.
@deeeky (3669)
• Edinburgh, Scotland
31 Mar 08
Yes time comes into it but even over time the price can go down and leave you with a gegative equity meaning you now owe more than you paid for it.
• Canada
31 Mar 08
I think you would find it very rare for a house to go down in value. It rarely happens.
@mysdianait (64082)
• Italy
31 Mar 08
The way things are looking (at least here in Italy) that situation is just around the corner. Many people have lost their jobs and are behind with mortgage repayments and putting their houses for sale but no-one has money to buy them - and prices are falling. It's a vicious circle.
@Darkwing (21590)
30 Mar 08
Yes, there is a big difference between the two, but if you pay your insurance, aren't you covered if you lose your job, or a large portion of your regular income? I think there are ways around the liability status, my friend. I'm not sure about that because I rent, but I always thought that's what the insurance policy was for? Brightest Blessings. x
@deeeky (3669)
• Edinburgh, Scotland
31 Mar 08
Yes the insurance is there in case of difficulty and will only pay for the interest on the loan and not the loan itself which will always be there till you pay it off. That case it is a liability!
@Darkwing (21590)
31 Mar 08
Ok... I obviously didn't know too much about that. Thank you for explaining. At least, if you buy property, you only pay for a certain time before it's yours. With rent, you can pay it all your life and have nothing to show for it, and sometimes, it's almost as expensive as a mortgage.
@deeeky (3669)
• Edinburgh, Scotland
31 Mar 08
In some cases the house is never yours until the last payment is paid. The loan maybe for example ten thousand pounds, but by the time the loan is paid fifty thousand has been paid! Plus, even if you make a profit if you sell, to buy another will swallow most of that.
1 person likes this
@mysdianait (64082)
• Italy
30 Mar 08
I think I get what you mean. You have to pay taxes etc if you are a house owner but you can't use the bricks to pay the bills?
@deeeky (3669)
• Edinburgh, Scotland
30 Mar 08
If the house has to be paid for (mortgage) then the money has to come from somewhere. If your job has gone where does the money come from?
1 person likes this
@mysdianait (64082)
• Italy
30 Mar 08
Been through that scenario. I lost my job when the firm I'd worked for for several years closed three years ago. I was halfway through a fifteen year mortgage. I had no other choice but to sell and I was lucky as it was just before all the present problems started. Now I rent a smallflat and do whichever jobcomes along but quite honestly I prefer it this way. Owning a house is not always as you say an asset.
@deeeky (3669)
• Edinburgh, Scotland
31 Mar 08
With a fifteen year mortgage and then losing your job seems to prove my point somewhat. I am glad that you found more work and are happy with your present situation.
@duranv (517)
• Honduras
30 Mar 08
But if you don't own a house, you'd have to pay rent, and I'm just guessing but I think at the end of the year you'd pay more in rent than on taxes etc. And in the end you can still sell the house and get some of your money back. So I think it is an asset, besides you can make any upgrades you want and they're yours, unlike if you are renting.
@deeeky (3669)
• Edinburgh, Scotland
31 Mar 08
If you do not own a house then obviously you do not have an assett or a liability! and if you sell the house you still have to use that money to either purchase another or go into rental accomodation.