Originally Posted by gwilks98

I never really looked at it like this before. Take the standard logic brokers use to get people to buy homes:

It will appreciate in value over time, my guess is between 3 and 5% avg per year?
Your principal payments are an investment, whereas 100% of a rent fee is an expense.
Your interest on a mortgage is tax deductible.

Is it truly smarter though? Lets say I had the option over the next 30 years to live in a $120,000 house. (Yeah, it's cheaper here, but that's still pretty small.) I also had the option to live in an apartment for $550 a month.
Comparatively, I'm paying less per month for the apartment by about $200, after you computer PMI and any additional BS fees.

If I took that 200 extra per month and invested it each month for the 30 year term at an average rate of 8% (it seemed like a fair number), I'd have approx $75,000 at the end of that term. (Minus taxes, probably 50,000 or so.)

Now, had I bought the house, I figured it would have appreciated about 3.5 % per year, again, it seemed like a fair number. At the end of the term, it would be $336,000. However, I will have paid $248,002.12 for it. That's only 88,000 in profit. Keep in mind, I'm not including the taxes you pay on the sale, plus fees to both buy and sell the property. Then there's maintenance cost on the house. I'm sure over 30 years your going to have to repair quite a bit.

After all is said and done, will I really have more money than my original 50,000?

It still doesn't seem logical, maybe even counter intuitive. Was Robert Kiyosaki right? Is a house a liability instead of an asset?

Edit: I forgot to add one thing. I would have paid 128000 in interest. Assuming a 30% tax bracket, I would have roughly 55,000 in back taxes owed total. So the figures are a little better for the house, but not by much.