A Home Can Be a House of Mirrors
I can already hear the doors slamming.
Whenever I write about homeownership, I get e-mails from readers who are convinced I hate real estate. That isn't the case at all. I believe most folks should aim to own their own home and that, under the right circumstances, buying rental real estate can be a smart move.
But it's also clear to me that many people overestimate the likely gain from homeownership, leading them to buy homes that are too big, overspend on remodeling and purchase vacation properties that are poor investments. What's going on here? I blame it on a fistful of financial illusions.
Telling Tales
According to home-finance corporation Freddie Mac, home prices have climbed 5.9% a year over the past three decades, barely ahead of the 4.7% inflation rate. But as behavioral-finance experts often note, people tend to put a lot more weight on anecdotal evidence than on statistical averages.
Indeed, whenever I mention Freddie Mac's numbers, readers brush them aside and instead tell me how Aunt Ethel made a killing in real estate. I have my doubts about whether Aunt Ethel really did as well as these readers suggest. But her success, if true, is no great surprise.
When people buy homes, they are making a massive bet on a single piece of property. As in those contests where a bunch of investors each pick one stock, you would expect at least a few folks to score huge gains. But just because there are a couple of lucky winners doesn't mean all homeowners will make out like bandits.
Muddled Math
Even if homeowners earn rather ordinary returns, they are often under the illusion that they have done extraordinarily well. To understand why, suppose you buy a $200,000 house, putting down $40,000 and borrowing the other $160,000.
Over the next six years, the house's value climbs to $282,000. That's a 5.9% annual increase, right in line with Freddie Mac's numbers. But the gain sure seems impressive, because in six short years you have earned an $82,000 windfall on your $40,000 down payment. With easy money like that available, why not buy the biggest home possible and also purchase a few vacation properties?
Problem is, this calculation ignores a fistful of costs. Let's say that, when you borrowed the $160,000, you took out a 30-year loan with a 6% mortgage rate.
The good news is, during the first six years, your monthly mortgage payments would have paid off $13,763 of the $160,000 borrowed, so that your gain in home equity comes to $95,763. The bad news is, you would also have paid $55,305 in mortgage interest during those six years.
If you are in the 25% federal income-tax bracket and you can deduct your mortgage interest, the after-tax cost would amount to a hefty $41,479. Nonetheless, if you subtract that $41,479 from your $95,763 increase in home equity, you would still be left with a healthy $54,284 profit.
Realizing this profit, however, would be costly. If you pay a 5% real-estate broker's commission to sell your $282,000 home, your profit would shrink by $14,100 to $40,184.
Moreover, we haven't factored in other costs, like maintenance expenses, homeowner's insurance, property taxes and the closing costs when you first bought the place. Those costs shouldn't wipe out your entire $40,184 gain. Still, after all these costs and after you figure in inflation, your net gain in home equity is probably modest.
And yet, despite all this, your home has probably been a decent investment. After all, you got to live in the place for six years without paying rent. But for some reason, folks ignore this imputed rent and instead focus exclusively on home-price appreciation.
No Improvement
The math gets more muddled once you figure in remodeling costs. Folks will take their home's purchase price, add the cost of all their home improvements and then compare this sum to their home's sale price or current value. Oftentimes, it appears that building the new bathroom and putting in the new kitchen has greatly increased their home's value.
But, in reality, remodeling is a terrible money loser. Consider a study in the November 2002 Consumer Reports. The magazine surveyed real-estate appraisers to find out what return homeowners were likely to earn, assuming they sold a year after making various home improvements.
The results weren't encouraging. According to Consumer Reports, you might recoup just 50% to 75% of the cost of a major kitchen remodeling, attic-bedroom addition or bathroom remodeling. Meanwhile, you might get back 40% to 50% of the cost of a sunroom or family-room addition. What if you wait longer than a year to sell? The percentage recouped would be even less.
That doesn't mean you shouldn't remodel your home if you will get a lot of pleasure from the resulting improvements. But don't kid yourself that these home improvements are a good investment.
Hidden Risks
Real estate doesn't just seem like a fabulous moneymaker. Readers also tell me that houses are a low-risk investment. But are they? True, unlike with stocks and mutual funds, you won't ever open the morning newspaper and discover your home's value has plunged 20%.
But you shouldn't take too much comfort from this lack of information. Maybe your home's value is fluctuating wildly. Maybe it's worth a lot less than you imagine. But you won't really know until you go to sell.
There is a silver lining, however, to these financial illusions. Many folks say buying a home is the best investment they ever made, and I believe them.
People may be too quick to buy and sell stocks and mutual funds. But with their homes, they really do behave like long-term investors, clocking their modest gains, collecting their imputed rent and saving regularly as they pay down their mortgages.
投资房产能赚大钱？
只要我写关于房地产投资的文章，就会收到很多读者的电子邮件，他们坚信我痛恨房地产。其实并不是那么回事。我相信多数人应该都想拥有自己的房子，而且在某些时候，买一桩可出租用的房子是不错的选择。
但我也知道，正是由于过高的估计了房地产投资回报，才促使很多人盲目购买过大的住宅、追求豪华装修，甚至还有的购买并不怎么具有投资价值的度假住宅。这是为何？我认为原因主要是人们对房产投资抱有不切实际的幻想。
真实的故事
联邦住房贷款抵押公司(Freddie Mac)的数据显示，在过去三十年中，美国的房价以每年5.9%的速度增长，仅略高于每年4.7%的通货膨胀率。投资行为学专家经常说，人们往往把个别的投资成功案例当作普遍情况，而不愿相信统计平均数据。
每当我谈起联邦住房贷款抵押公司的数据，读者总是不予以重视，反倒来告诉我埃塞尔姑妈(Aunt Ethel)的房地产投资如何赚钱。我怀疑埃塞尔姑妈的投资是否真像读者们说得那么好。但即便是真的，也不是什么大不了的事。
当人们购置家业时，他们是在某一套房子上下了一个巨大的赌注。就好像很多投资者每人挑选了一只股票，其结果是只会有几个人能赚到大钱。幸运儿毕竟是少数，个别成功投资案例并不代表所有的房地产投资都能成功。 好好算算帐
即便房地产投资只赚得很一般的投资回报，房主们通常也会误以为自己赚了不少。为什么呢？假如你花20万美元买了一套房子，首付是4万美元，其余16万美元使用银行贷款。
在未来的6年中，这套房子的价值上升到28.2万美元，也就是说每年升值5.9%，这完全符合联邦住房贷款抵押公司的数据。你的房子在短短6年中升值8.2万美元，也就是说你用4万美元的投资获得了8.2万美元的收益，这当然是笔不错的买卖。如果钱真这么好赚，那干嘛不再买更大的房子，再投资几栋度假住宅呢？
其实，这样的计算方法是有问题的，其中有很大一笔成本被忽视了。假设16万美元贷款的期限是30年，贷款利率为6%。
好消息是，你在这6年中每个月支付还款，总共还清了13,763美元的本金，这样一算你的投资收益应当是95,763美元。坏消息是，与此同时，你还支付了55,305美元的按揭贷款利息。
如果你的纳税比率是25%，贷款利息可以抵减纳税支出，所以你的税后利息成本应当是41,479美元。将这笔利息支出从95,763美元收益中减去，你的投资收益就降低至54,284美元。
要实现这些收益的成本是相当高的。你可能需要支付5%的中介费才能卖掉这套价值28.2万美元的房子，这样你的收益就又减少了14,100美元至40,184美元。
另外还有其他一些支出你没有考虑。比如，房屋修缮费、业主保险费、房产购置税和刚开始买房时办理贷款的各种手续费。这些乱七八糟的费用不可能将你的40,184美元收益全部吃掉，但把它们扣除后，再刨除了通货膨胀因素，你的投资所得可就只剩下可伶的一点了。
但尽管如此，你的家也许还能算得上是个不亏本的投资，毕竟你在一个地方住了6年都没付房租。但出于某些原因，有的人计算投资收益时只会考虑房屋有没有升值，而没有将节省的房租包括在内。
装修要额外算钱
上述计算没有包括装修成本。人们通常是将房屋购买价格与装修价格加起来，然后再去与房屋卖价或房屋现值做比较。通常情况下，修一个新浴室或是弄一个新厨房似乎会大大提高房屋的价值。
但实际情况是，装修是赔钱的买卖。2002年11月份的《消费者报告》(Consumer Reports)曾对房地产评估师进行了一项调查，想看看装修1年后出售的房产可能给房主带来多少回报。
调查结果并不令人满意。《消费者报告》称，房主也许仅能收回50%-75%的厨房装修、阁楼卧室装修或浴室装修成本。此外，阳光室或起居室的装修只能收回40%-50%的成本。如果装修完成超过1年后才出售，能够收回的成本就更少。
这并不是说你很想装修却不让你装修。关键是你要明白，这些装修并不是很好的投资。
潜在风险
房地产并不是一棵美妙的摇钱树。有读者对我说，房地产投资的风险比较低。但事实是这样么？房地产与股票和共同基金确有不同，你不会在某个清晨打开报纸，突然发现自己的产业贬值了20%。
但房地产的信息流量小也会给你带来不利。你的房产价值可能波动的非常剧烈，可能它的价值比你想像中少很多，但除非你卖掉它，否则你无从知道它到底值多少钱。
不过话也说回来，并不是所有房地产投资都不好。很多人说，房地产是他们最成功的投资。这我完全相信。
人们投资股票和共同基金可以快进快出，但如果投资房地产，就只能做一个长期投资者了。
