I'd sure like to know more about those.
For instance, buy an index with a low maintenance fee that tracks the REIT. It's also a lot quicker (and easier) to get out of that index fund than it is to get out of your home. https://personal.vanguard.com/us/FundsSnapshot?FundId=0123&#...
The key is, you can invest in real estate without owning a home and better still: be diversified into multiple kinds of real estate. A home is a very homogeneous investment vehicle. Think of it more like a savings account with a maintenance fee but you can live inside it.
That throws the calculation way off, because you don't get the tax benefits associated with buying and living in a house.
Money flows, tax breaks can decrease the viscosity of that flow.
There's more than one way to play the game. :)
This will obviously not be accessible to you - but just to illustrate that they do exist for special protected classes of individuals.
When I heard this from my co-worker, I was flabbergasted.
Her relatives, senior citizens in India, get +9% interest on their personal savings. Call it subsidized, but there is no risk.
She is really annoyed when they harangue her about her middling 1-2% interest rates.
Which one would you do? The reason why _some_ people make money from housing is leverage. You take out a huge loan and if it goes up in value a few %, you made much more than your starting value. Leverage works exactly the same way when prices are declining. Your small $50,000 downpayment is quickly erased by a 5% decline in value.
I don't like leverage in my investments. I prefer to know that I can't lose more money than I invested in the first place. I diversify my risk so that I can never lose more than 10-25% of what I own with a single investment. Why would I put so much money in a single asset that is extremely illiquid and has so much leverage that I can lose more than my net worth?
Housing just doesn't make sense until the market returns to reality - and with federal subsidies including tax credits, Fannie Mae and Freddie Mac, it won't return to a fair market until _all_ government subsidies are removed, including mortgage interest tax credits, Fannie/Freddy backing mortgages, etc.