Why Entrepreneurs Should Not Buy Homes

For many people, the real return on buying a house is owning the house, not the increase in value of the property. Where I live housing is fairly inexpensive and I can't think if of any other similarly sized investment that is guaranteed to cover my cost of housing for the rest of my life.<p>(edit: typo)

In the introduction, the author mentions that 1) he had a lot of problems selling his first home and 2) the story of his second home is so painful that he doesn't want to write about it. After reading that, it's hard not to take the rest of the article with a huge grain of salt. There are a few good points about home ownership requiring a lot of cash and limiting your mobility, but most of the points are very questionable: the tax deduction is NOT microscopic, maintenance does NOT have to be a huge issue (depending on the house), you will NOT spend all of your time working on the house (again, depending on the house), and so on.<p>Entrepreneurs, specifically, can do clever things with houses. For example, if you can afford the down payment, there are many places where you can buy a 4 bedroom house, rent out 2-3 of the bedrooms and have a net profit every month (especially with the current interest rates.)

So basically is instead of making a downpayment for a house, invest in a business, and get a much better return.<p>The difference is the risk involved in those decisions, since a house is kind of a guaranteed investment.

"Rent. People will argue that the price of the mortgage, maintenance taxes, etc is all baked into the price of rent. Sometimes this is true. But usually not. And often maintenance and taxes will go up faster than your rent."<p>Citation needed.<p>If I pay $2000 per month * 12 and get 0 equity, vs paying $2000 * 12 + 2000 and get some percentage of that in equity, and deduct some from my taxes, something tells me if I get past the initial up front costs, and my time horizon for moving is &#62; 5 years, owning a home probably isn't a bad call.

Buying home is not for everyone but renting is NOT always better. It's better when you only need a studio or 1 bedroom but once you have a family and children, renting a 2 or 3 bedroom apartment make no financial sense. In San Francisco, I'm looking at $1000 more in rent going from a 1 bedroom to a 2 bedroom and can expect that to continue going up.<p>If you buy smart (i.e. not at the top end of your budget) with the intention to pay off your mortgage (not sell/buy every 3-7 years), you're in a far better position then someone who still has ~1/3 of their monthly income still going out the door. Even if you don't pay off your mortgage, you have the possibility to refinance, reducing your monthly nut making it far easier to survive as an entrepreneur.