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At least here in the United States, where only a minority of Americans prefers having a landlord and superintendent legally obligated to maintain their buildings and bear the risk if, say, Hurricane Sandy floods the basement. Americans romanticize the idea of owning their own roof, walls and fireplace, and they think they’ll make money off ’em, too.

The problem is that, perhaps because of tax incentives and ignorance about the financial returns from real estate investments, Americans are buying more house than they need or, in some cases, derive pleasure from. That incurs maintenance costs for the homeowner, not to mention other kinds of negative externalities for the rest of society (sprawl, traffic and greater carbon emissions) that likely outweigh the individual “psychic benefits” of buying oversize houses. If nothing else, the recent financial crisis should have taught us that it’s not in the country’s best interest to enable every aspiring homeowner to buy.


Personally, I've always treated real estate as an expense to be minimized rather than an investment.

Stocks for the Long Run.

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