Your property tax & insurance (usually less than 1/4th of your payment) goes up 2-3% (in most places).
Heh, or in my case: 30% this year.
https://smartasset.com/taxes/what-is-a-homestead-tax-exempti...
OP's original point still stands. Real estate in America is designed to have many economic advantages for wealth accumulation and preservation. You might even go as far as saying the economic advantages of real estate are a byproduct of regulatory capture
This seems correct to me. I don't think it's been specifically designed to be a store of wealth.
the property value that can skyrocket
There's people that own $8M dollar houses in Hollywood paying less property tax than people living in $800k condos.
people lose their homes all the time because the neighborhood gets gentrified and their home values go up and they can't afford the property tax.
insurance can skyrocket based on natural disasters in your region. a lot of the Gulf Coast has trouble getting homeowners insurance. if earthquakes ever pick up on the west coast. the same thing will happen
You don't own the land your home sits on. The government can take it any time they want and do whatever they want with your property; you don't really own your home even if you own it.
I mean - at some point you get into a philosophical debate about, "What, really, is ownership?". Listen if you have a mortgage, you own the house by any common definition of the term.
does one truly ever own their home?
or does one always have someone who tells them what to do via zoning or property tax or mortgage?
Does one really ever own anything, if someone can just take it from them free and clear?
As I say, there's more than one philosophical perspective on this. I am not a philosopher, but here's my take on a few perspectives:
- Pragmatist: If the law says your average person can't roll in and take it, you own it.
- Libertarian: If the law says your average person can't roll in and take it, but corporations or HOA's or other entities tell you what you can and can't do with it, you don't own it.
- Tribalist: If there's no law, and you can slaughter anyone who tries to take it, you own it.
- Feudalist: If the law protects it, but the wealthy and powerful can just roll in and take it because they make the law, you own it. Until at least it becomes of value, then you can rent it back from its gracious new owners.
- Communalist: You don't own it, the community owns it, but they're happy to allocate it for your usage as long as you play by their rules.
- Common language: If you have a mortgage on it, you own it in the eyes of the law. If you stop paying the mortgage, or go into tax arrears, or at the victim of eminent domain, people can make it not-yours, but you still own it (for now).
- Expansionist: If you were there first, you own it. Unless your culture has no concept of ownership, in which case, you don't own it, but someone else soon will.
think for yourself for a minute
let's get down to the extreme basics.
ownership means someone can't take your property.
The only way to take someone's property unwillingly is with force/theft
The government is supposed to protect you from this by being the only sanctioned use of force in the country.
however, it does the opposite and takes your property by force itself.
The difference lies in whether or not they can take your house away.
If you have a mortgage you're just renting until you pay in full. You don't own it until you fully pay.
If take a loan, and buy a house with the money, they can't take away the house. Sure, you could say that you might be forced to sell your house to pay back the loan, but that would mean nobody owns anything if he has to sell something in a pinch.
any debt you get in puts all of your assets at risk
To me the definition of ownership means someone cant come take your property if you don't do what they say.
what's even more fascinating is that even after you pay off that mortgage, your land is still able to be taken from you forcefully if you don't pay your property taxes or the government sites you for code violation.
you just traded masters from the bank to the government.
homes are one of the biggest scams of modern times in my opinion.
just like the word woman and vaccine the word owner has been modified in modern times.
according to the true definition of ownership a secured loan is not ownership as you don't have complete control over the property
The bank can't gain or lose money when your home changes in value. It can't enter your home without your permission, change the paint color, or sell your home.
It can do these things if you become unable to pay for your mortgage. Your home is security for them, but you could buy a house with a loan secured by anything else. It's not uncommon for wealthy people to borrow against their stocks and then buy a home "in cash". In that situation, you'd never say "the bank owns their home" just because they owe the bank a bunch of money.