Towards a better tinyhouse

Inventing to freedom?

A house is *Not* an investment.

with one comment

A house is not an (monetary) investment, though it may or may not be better than renting, depending on the area. I just pulled those links from a quick search. I’m sure there are many more. I’m not going to introduce any pet economics theory here, just point out that the honest experts all agree. Though I do find it very odd that they fail to include much about the mortgage interest rate.

Yes, the appreciation or depreciation will affect the total cost of ownership, so that is one of many factors that need to be included in the cost.

But. When you own a home, especially with a mortgage, you spend money to do so, money that you will not ever see again. The more expensive house, the more you spend. A lot more.

The magic of modern finance does not change this.

However, from what I have read, it is true that mobile homes, which are considered “chattel” live in a less favorable financial climate. However, some counties in the US have started taxing them as real estate, which is good. And they did by themselves, without being asked, by all accounts.

Turns out there is apparently a sort of self-reinforcing cycle of depreciation and poor finance as a result of being considered chattel, that can be broken. When you change the way the government treats it taxwise, the banks change their treatment loanwise, and the market changes their treatment depreciation wise, and it’s much like a regular house now, financially.

So I think it would be a really good idea to get potrable tinyhouses considered real estate as soon as possible, then they could end up being even cheaper over the long run.

Also, anyone who thinks using or living in a bighouse is somehow going to make them money, or not cost much more, is a being very silly person.


Written by gregor

September 23, 2010 at 14:48

Posted in Uncategorized

One Response

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  1. […] depreciate more rapidly than a regular house, another listed is the loan terms are worse. (I have previously pointed out that assuming the structure of any house will go *up* in value is […]

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