You save on rent, so you need to include that in your calculations. Also most homeowners use leverage to purchase a home (mortgage) which juices up returns on investment. You typically wouldn’t be able to do that with traditional stock investments. I would say that in general, real estate returns have been better than S&P 500, especially in certain locations.
Mortgage interest is financially equivalent to rent. (It is deductible, as long as it’s high enough.)
Both ways, positive and negative, increasing risk.
Can buy on margin any time., Can buy options.
Words are wind.
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I’m not sure what your point is. I’m merely saying that you need to factor in the benefit of housing (as expressed by equivalent monthly rental payments) in the calculation.
A mortgage is a levered investment with monthly cash inflows (no monthly rent) + terminal payoff on sale. Your monthly mortgage payments is how much you put into that investment, and the leverage decreases over time as you pay off the debt.
Whoa! This is information I had not ever heard! Thanks!
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If homeownership consistently outperformed the sp500 then a lot of fund managers would be out of a job.
I think you should fact check yourself before you wreck yourself
The point I’m making is that most people dont buy stocks on margin, and most people use mortgages to invest in real estate. So if you calculate the historical returns to owning a home, they are usually juiced up because of leverage. Of course some people get destroyed as well, but historically that’s not the case. Where I live there is no doubt that real estate has performed better than the major stock indices, and especially true when people used long term mortgages which increases the leverage. Whether that trend will continue, I don’t know. I’m merely disagreeing with the idea that owning a home doesn’t pay off that much.
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Where I live, it has historically outperformed the stock market by quite a margin. Of course it might be a bubble that will pop. Adding the leverage aspect to it, the returns have been quite spectacular. Again, not claiming that this will always be the case.
I think a more accurate statement is; homeownership pays off handsomely in very select markets over the long term
Annual property taxes, interest payments, maintenance, sales tax on the home, real estate agent fees, etc wear the return down to a nub for all but a few select cities
Again, one must consider the leverage aspect. You can get a big mortgage, stay in the house for a few years, and then sell for a big profit. Your actual investment is minimal.
You can also get wrecked. I’m merely pointing out that many people dont calculate the return on investment properly.
Please just share any real estate market that has outperformed the sp500 (you don’t have to share the one you live in, any one is fine)
Even San Fran hasn’t done so over a 30 year period. Once admin expenses are factored in it isn’t even close
Well I’m canadian!
Vancouver underperformed both San Fran and sp500 over the last 30 years
Anyways I’ll just let you continue to make things up
I doubt it for vancouver but I might be wrong. Do you have a link?
Yeah but then you have no house and you have to move somewhere “worse” or leverage up even more for a “nicer” house
Not really walking away with much unless you move to some shit hole
this assumes no leverage, doesn’t take into account the rental payments you didnt have to make, etc.
So for anyone who bought a home in the last decade, on mortgage (which is almost always the case), there’s absolutely no way that the stock market did better than vancouver real estate.
I’m crying laughing. The link you shared shows the sp500 outperforming Vancouver over the 3, 5, 7, 10, 20, and since 1999
Why did you expose yourself like this 
And once you factor in admin expenses the gap widens even further
Good luck in retirement
what gap? There is no gap. You want to look at 30 years because the stock market was booming in teh 90s mostly due to the .com bubble.
It’s just a fact that real estate has been very good over the last twenty years in canada. So this idea that the stock market always outperforms real estate is just simply wrong.