America, Italy, Principal discussed on The Meb Faber Show

Automatic TRANSCRIPT

Need cation on that or maybe i've got that wrong because i'm idiot but the fact of the matter is that very few people almost no one fully accounts the full toss of housing they all tend to think sort of like i bought the house for this on a mortgage i paid this now i'm selling it for that and the it's way up above where i bought it so it must have been a good investment and the first one that i wrote wanted to make the point that you really need to account for the full costs all of the features including home insurance and taxes and end end in all that stuff to track from your return and when you put those all in it's actually much lower than you want and then i didn't articulate well i used the county that i came from originally that i was raised in which is one of the hottest markets in america over the ten year time period and i said you know here's the return and then people thought i cherry picked that because it was a low return in fact i cherry picked up with a high return but italy explain that very well if you actually look at lots of places in america returns over long periods have actually been that good once you fix in the costs and there's all kinds of websites you can go to to approximate what those total costs are and then there's a point that nobody wants to accept which is that there's actually hard data on all fifty states on ownership versus comparable home rental rate and in fact it is always very state to state of course but it's always much cheaper to rent a home than to buy that same home and then people say i yeah but when i buy the home i'm not paying rent well the average homeowner in america owns there for ten years and in the first ten years approximately fifteen percent of your payments ever go to principal eighty five percent or almost exactly the equivalent to.

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