> If you had that ability, investing in another asset at the same leverage level (such as shares) would net you even more financial income (obviously, its higher risk).

This sounds like Reddit "live in your Mom's basement to save on rent" type financial advice. It doesn't work if you have to use that money to pay rent. Rents tend to be about the same or more than a mortgage. If you happen to live in an area where rents are considerably lower than a mortgage than this is an outside possibility, but this also depends on your rents not skyrocketing over the course of 30 years. One of the great things about 30 year fixed loans is that they allow you to ride out market insanity.

This is the dirty little secret of these housing bubbles. It's mostly the poor who get seriously burned, because people with money have mortgages. They don't have to find a way to pay a rent that increased 40% this year. In fact many of the people are the landlords who are enjoying a massive windfall thanks to the housing crisis. They have an incentive to make sure it continues.

Depends where you're talking about in Canada from 2001 to present day the average return of housing has beat the stock market. There is also a question of what amounts you're investing. Paying down a mortgage is sort of like having ever declining rent, but if you're investing in the market instead you face ever increasing rent so the amount of the investment is different between the two scenarios.

For instance, after paying off a mortgage entirely, my housing costs will be effectively repairs, property tax and utilities. That's a tiny fraction of rent. Meanwhile over 25 years property prices have more than tripled so it's likely the renter's rent would have gone from $1500/month to $4500/month or so. If you have $7000/month for both cost of living and savings then putting $5500/month into whatever assets you choose now that your home is paid off is going to generate much better returns than putting $2500/month into whatever asset you choose after paying off your inflated rent.

Alternatively, you can buy the home purely as an investment rather than a place to live. In this case, you have rental costs either way but you don't just make the capital gains on the home you also make rental income from renting it out. Typically rental income can be around 6% of property value. If you add that to the 7.5% returns to property YoY since 2001 you get 13.5% returns. You will have some expenses to deduct from that so your net returns might end up around 11%. That's still demolishing the stock market returns.

> For instance, after paying off a mortgage entirely, my housing costs will be effectively repairs, property tax and utilities. That's a tiny fraction of rent.

no, if you paid off the mortgage, then the cost of your "rent" is just the cost of the capital sitting in the house (plus those maintenance costs you mentioned).

There's no such thing as free living. it is possible that rent is more expensive - but over time, this ought to normalize, as expensive rent will incentivize build-to-rent and arbitrage the difference to make a profit.

In a world of zoning and NIMBYs I very much doubt the market adjusts in any way that resembles an efficient market.

At most the portion of the rent I get from my capital is the difference between deploying the capital in the market and the return to housing. Since housing has historically beat the market that suggests a zero or negative rent for investing in housing.

> Since housing has historically beat the market

this is not true unless you only start counting from the past 10-20 years, and only include regions that _did_ beat the market, rather than globally.

see https://www.youtube.com/watch?v=7rvY2rIxdsA

If you measure the capital returns of housing as buying a property and letting it sit empty it doesn't beat the market. But renting a property returns roughly 6% of capital in most markets, and Canada-wide housing prices have gone up 7.5% a year over the last 20 years. Even if it costs you 2.5% of the home price to rent the property (this is a high estimate) that suggests making 11%/year over the last 20 years. If you go back longer, the capital curve for housing gets slightly lower and you might eventually get only 9% returns counting capital income and rental income. But markets still haven't returned 9%/year.

False - investing in shares on margin would get you margin called and bankrupt in many time-scales. A house can't be margin called (if you can't afford the debt service, you can still end up bankrupt).