5 reasons why I consider my home an investment, despite what the experts say

  • Financial experts often say that you shouldn’t think of your home as an investment, but I don’t agree.
  • When you invest money in something and get a return, it is an investment. And my house has offered a return on investment.
  • Our renovations increased 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 full of articles explaining why your primary residence is not an investment. Yes, many of us take home ownership as an important step, but financial experts often say that your single family home is just that and it shouldn’t be seen as an investment.

Having owned a home for a few years now, I totally disagree. Of course, your primary residence may not be the best investment, but it is an investment in the end.

According to the dictionary, an investment is something in which you invest money with the expectation of a return (often your money plus a little more). Here are some reasons why I put my house in the same category as the stocks, bonds and index funds that I own.

1. I made sure to buy a house that I can really afford

As with an investment, you need to be strategic when making that initial deposit and carefully weigh all of your risk factors. In the case of my main house, my husband and I made sure to buy a house that we could really afford.

We looked at financial factors like the tax rate, our down payment and the monthly mortgage payment. We also considered things like the projects we wanted to complete to improve the house. The goal was to make sure that we wouldn’t be poor in housing 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 to minimize my costs, like management fees, as well as the risk of losing money. I therefore chose to invest in the VTSAX, which is a

index fund


With our house, we also chose to play it safe, so that our housing expenses would be lower and more reasonable, but we would also have plenty of opportunities to increase the equity and overall value of our home.

2. We have added value to the property with renovations

As we were able to purchase a house that was well under our budget, we were able to start renovating shortly after moving in. My husband and I installed a backsplash in the kitchen, my dad redone all the floors, and we improved the landscaping quickly.

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

When we go to sell our home, buyers will likely appreciate the updated, modern 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 ready to move in and modernized so buyers don’t have to do much.

3. The value of your property can increase on its own

Another reason I view my home as an investment is that the property can increase in value even without us doing anything. Like any investment, you run the risk of losing money, which is very possible for any homeowner. However, most homes appreciate over time if they are kept in good condition.

Factors beyond your control, such as the economy, someone building new amenities in the neighborhood, or homes nearby that sell for a higher price, can all increase the value of your property. In just over three years, the value of our home has increased by 27% according to real estate websites. This is without even re-inspecting it or re-evaluating it after completing all of our updates.

4. We pay extra on our mortgage to build equity

The average term of a mortgage is 30 years, which is a long time. If you are able to make additional mortgage payments, you could pay off your instant loan sooner and save thousands of dollars.

I like how our lender has a feature that helps us calculate how much we could save by making additional payments. By paying only $ 250 more on principal each month, we can save almost 10 years on our loan and save $ 55,197 in interest.

a calculator that shows how much you will save in interest by paying extra on your mortgage each month

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

Unlike other investments, this return on investment can be guaranteed as long as we regularly make additional mortgage payments.

Since we bought our home, we’ve rounded up our mortgage and made additional payments to speed up equity building.

5. We can liquidate our asset by selling it or obtaining 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 might not be an instant process, but if we really wanted to downgrade or get our home equity in cash, we could sell it.

Houses are selling very quickly right now because stocks are low everywhere. This could put all of the ROI in our hands to be used for another home or some other type of investment.

Or, there is always the option of tapping the equity in our home for a low interest mortgage or line of credit, which can be used for other housing projects, another investment, or whatever. another reason.

Ultimately, these options wouldn’t be available if your home wasn’t an investment and an asset. You would not be able to borrow against the equity you own or earn money by selling your property.

When you invest money in something and see a return, it is 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 is not guaranteed, and your home could become a major financial hole and cost you dearly. But it can also be considered an investment if you get a return on the money you invested even by living there with your family. When the average person calculates their equity, they include the equity in their home because it is an asset and (in my opinion) an investment.

Ultimately, your house is there to put a roof over your head. I don’t think this is the absolute best investment because home ownership can get expensive. But I also can’t ignore the fact that I have seen a return on my investment since owning a home and feel more financially stable because of it.


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