Should You "Bank" on Your Home?

We are just about to close on the selling of our home of 19 years and I was wondering what the appreciation was over the past two decades. This was inspired because my realtor keeps reminding me of how much I paid compared to our selling price. The actual cost can get really complicated (considering home improvements, tax benefits, repairs and maintenance, etc.) but I wanted to keep it simple.

I took our purchase price as the present value and our selling price minus realtor fees and updates to the house for selling as our future value. The 19 years of compounding yields a whopping 2.2% return on our house. I know all of you finance people want to look at my investment (down payment) and calculate the return based on that, with tax advantage on interest, also calculating in home repairs and maintenance, but that gets complicated really fast, and I don't have all of those records (shame on me). But this shows that our house appreciated an average of 2.2% over 19 years or about the average inflation over that period.

My grandfather always told me "you buy a house to live in and not as an investment." The house has served us well as a happy home to raise our three children; But as an investment? -Not so much. We are glad that we sold our house. We hope that the buyers enjoy the house as much as we did and they make it into their happy home (but not bank on it as their happy investment ever-after).  

Comments

Post a Comment

Popular posts from this blog

ang huwarang pamilya

Malapit nang matapos ang Buwan ng Wikang Pambansa. At bilang paggunita sa kahalagahan ng pagmamahal sa sarili nating wika ay tatanghalin ang isang paligsahan sa eskwelahan ng aming panganay na anak. Para sa Junior Advanced Casa, ang paligsahan ay isahang pagbigkas ng tula at ang napiling tula ay:   Ang Huwarang Pamilya   Sa aming tahanan Buo ang pamilya Lubos na kasiyahan Aming nadarama Maaga pa lamang Iyong makikita Haligi ng tahanan Hayun nasa palayan Ilaw ng tahanan Laging nariyan Tunay na mapagmahal Maasikaso talaga Si kuya, si ate Maasahan din Masipag, magalang Magaling sa eskwela Itong aking pamilya Magandang huwaran Sa aking paglaki Sila ang tutularan    We have been egging TL#1 to memorize the poem. It's a bit of a struggle because we exposed him to the English language. Now, we're trying to help him learn to speak in Tagalog. He has already memorized the words but wouldn't listen and try to speak in the proper intonation. He apparently did not inherit my pen...
Read more

Submerging Market Update

note: This post was begun some time ago and the date-time stamp reflects the initial draft. The bulk of the data has been added since then. China: The Collapse Begins Chinese exports are collapsing and industrial activity with it. Recent reports suggest that they are experiencing mass factory shutdowns with owners and manager absconding. According to the BBC , migrant workers from rural areas are returning to their homes in the countryside en masse . Those watching the media would think that an shocking collapse came out of nowhere in the last few weeks. Readers of Financial Jenga have known that this was not just possible but virtually inevitable for many months. China could spend some of their dollars but they need to keep at least $1 trillion so the Yuan doesn't completely crash and burn. The interesting problem is the currency mismatch and "sterilization" issues. China's money supply growth is going to fall quickly as there will be fewer incoming dollars against ...
Read more

a brief trip to (smelly) Manila Zoo

Image
Manila Zoo. There was a time a long time ago when the mere mention of Manila Zoo made me feel giddy with excitement. I have committed to memory a childhood picture where I was happily posing in front of a peacock pheasant. Simple joy! I hail from the province and a trip to Manila used to be so special. What I didn't realize until I had children is that I was lucky to have grown up a probinsyana  - to have the fields, vast expanse of free space and hills as my playground. To have flowers to pluck, leaves to gather, dragonflies to catch, trees to climb, free fresh fruits to eat. My kids aren't as lucky. That's why a trip close to nature is a treat for our children. We brought the kids to Manila Zoo yesterday, as reward to our pre-schooler for winning the Interbranch science quiz bee in school. He loves animals and was happy to see the elephant, the birds, the tigers and the crocodiles. He was indifferent to the smell and the dilapidated look of the zoo. ...
Read more