Quote:
Originally Posted by Parallex
Real Estate isn't inheriently a poor investment, it's just like anything else in that it has to be properly valued. The market failure of the US housing market during the past 4 years was more a market failure in non-fixed rate mortgages by banks/lenders then anything else. Well that and the western compulsion to attempt to live beyond our means. That being said it's entirely possible that Zuckerberg can't find a place to buy that is both valued properly and fits his needs.
I'd rather own then rent in general, renting is just assetless sunk money.
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Only in the case where renting vs. buying is exactly the same on a cash-flow basis. Often this is not the case and renting ends up being cheaper than even the interest proportion of a mortgage payment (In others words the difference between renting and buying is just who you pay interest to, the bank or a landlord). Another bonus of renting is that you don't have to pay for maintainence and repairs, many homeowners really underestimate this cost. Also factor in the fact that the principal portion you pay is dead money (home equity doesn't pay you interest or dividends unless you have tenants and that comes with its own perils) earning nothing in interest or dividends. This makes a compelling case to rent and invest the difference in a broad variety of investments that earn a return. That way you get diversification, liquidity, and flexibility. All things your house can't do for you as an asset.