5 Reasons I Consider My Home an Investment, Despite What Experts Say


  • Financial experts often say you shouldn’t think of your home as an investment, but I disagree.
  • When you put money into something and see a return, it’s an investment. And my home has offered ROI.
  • Our renovations have upped its value, and we could easily sell it for a profit or take out a HELOC.
  • Read more stories from Personal Finance Insider.

The internet is filled with articles explaining how your primary home is not an investment. Yes, many of us see owning a home as a huge milestone, but financial experts often say that your single-family home is just that and it shouldn’t be considered an investment.

After owning a home for a few years now, though, I wholeheartedly disagree. Sure, your primary home might not be the best investment, but it is an investment at the end of the day. 

According to the dictionary, an investment is something that you put money into with the expectation of seeing a return (oftentimes your money plus some extra). Here are a few reasons why I put my home in the same category as the stocks, bonds, and index funds that I own. 

1. I made sure to buy a home I can truly afford

Like an investment, you have to be strategic when you’re making that initial deposit and carefully weigh all your risk factors. In the case of my primary home, my husband and I made sure to buy a home we could truly afford

We looked at financial factors like the tax rate, our down payment, and monthly mortgage payment. We also considered things like the projects we wanted to complete to upgrade the house. The goal was to make sure that we wouldn’t be house-poor and end up spending a fortune on house-related costs each month. 

When I opened a Vanguard brokerage account, I wanted to invest a certain amount but also minimize my costs, like management fees, as well as the risk of losing money. So I chose to invest in the VTSAX, which is a diverse


index fund

.

With our home, we opted to play it safe, too, so our housing expenses would be lower and more reasonable, but we’d also have a lot of opportunity to increase equity and the overall value of our home.

2. We’ve added value to the property with renovations

Since we were able to buy a home that was well under our budget, we were able to hit the ground running with renovations shortly after moving in. My husband and I installed a backsplash in the kitchen, my dad redid all the floors, and we upgraded the landscaping quickly.

While all of these things cost us money, they also helped increase the value of our home, so I consider it an investment in our property. Earlier this year, I spent about $5,000 on a bathroom remodel. According to Zillow, the ROI on a typical bathroom model is over 70%. I don’t see an ROI like that currently anywhere in the stock market or with cryptocurrency. 

When we go to sell our home, the buyers will likely appreciate the updated and modern-looking bathroom, and we can use it to justify our asking price. It’s no secret that you can sell your home for a lot more money when it’s move-in ready and upgraded so the buyers don’t have to do much.

3. Your property’s value can go up all on its own

Another reason why I consider my home an investment is because the property value can go up even without us doing anything. Like any investment, you run the risk of losing money, which is totally possible for any homeowner. However, most homes appreciate over time if they are kept in decent shape. 

Factors that are out of your control, like the economy, someone building new amenities in the neighborhood, or nearby homes selling for an increased price, can all make your property’s value go up. In a little over three years, our home’s value has increased by 27% according to realty sites. This is without us even getting it reinspected or appraised again after finishing all our updates. 

4. We’re paying extra on our mortgage to build equity

The average mortgage term is 30 years, which is a long time. If you’re able to make extra mortgage payments, you could pay your loan off early and save thousands of dollars in the process.

I like how our lender has a feature that helps us calculate how much we could save by making extra payments. By paying just $250 extra toward the principal each month, we can shave nearly 10 years off our loan and save $55,197 in interest.

Choncé Maddox could save over $55,000 in interest by making extra mortgage payments.

Choncé Maddox


Unlike other investments, this ROI can be guaranteed so long as we consistently make extra mortgage payments. 

Since we bought our home, we’ve been rounding up our mortgage and making extra payments to build equity faster. 

5. We can liquidate our asset by selling it or getting a home-equity loan

It’s no secret that with enough equity in your home, you can liquidate the asset by selling it or borrowing from what you already own. It may not be an instant process, but if we really wanted to downgrade or get the equity out of our home in cash we could sell it. 

Homes are selling very fast right now since inventories are low all over. This could put all the ROI in our hands to be used for another home or another type of investment. 

Or, there’s always the option to tap the equity in our home for a low-interest home-equity loan or line of credit, which can be used for more housing projects, another investment, or any other reason. 

The bottom line is, these options wouldn’t be available if your home wasn’t an investment and an asset. You wouldn’t be able to borrow from the equity you have or make money by selling your property.

When you put money into something and see a return, it’s called an investment

I like to call a spade a spade. An investment is something that you put money into with the hope of seeing a return. A return isn’t guaranteed, and your home could end up being a major money pit and cost you a lot. But it can also be treated as an investment if you’re getting a return on the money you put in even while living there with your family. When the average person calculates their net worth, they include their home’s equity because it’s an asset and (in my opinion) an investment.

Ultimately, your home is there to put a roof over your head. I don’t think it’s the absolute best investment because homeownership can get expensive. But I also can’t ignore the fact that I do see ROI since becoming a homeowner and I feel more financially stable because of this.



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