[TheCDAllenGroup]

Originally Posted by Young Spark

I beg to differ... it is NOT controlled by you... the property title isn't in your name until a mortgage is paid off. Now if you own the home free and clear, then I will agree with you. But if a mortgage company owns it then the answer of it being controlled by you is no. The mortgage company can at any time foreclose on you if the mortgage payments aren't made... so how is it necessarily controlled by you?

I agree Young Spark. A home is NOT your asset when you have a mortgage. It is the asset of the lender and a liability [to you the borrower].

The second angle to this is the current nature of cashflow you have with the home. Is it putting money in your pocket or taking money out of your pocket? Is this "asset" producing income for you? Or is it only producing "bills" for you?

It's just erroneous for anyone to say that their mortgaged [bank owned], expense-generating [utilities, insurance, and maintenance] house is an asset.

[TheCDAllenGroup]

Originally Posted by zoobie

True. But of course, owning a house and lot is still an investment.

Yes, in a way it is investment. The question is how the homeowner views this "investment".

For example, many homeowners think of themselves as Donald Trump-esque real estate investors because every their home appreciates in value, they borrow the money out [aka a home equity loan]. This kind of thinking is really a loser's point of view. Why? You are continually indebting yourself to the lender. So who's winning, you or the lender?

[TheCDAllenGroup]

Originally Posted by wully00

I read three of the the RD books and I still never understood what he was talking about. Anyone understand this?

Wully,

Robert explains it very comprehensibly in this video. Fast forward to the 9:50 mark: Rich Dad's Guide to Wealth with Robert Kiyosaki, Part II

[crackah]

True, its a liability if owing.

I will ask my accounting lecturer about this question, get a pro answer.

[jasaunders]

Originally Posted by TheCDAllenGroup

Yes, in a way it is investment. The question is how the homeowner views this "investment".

For example, many homeowners think of themselves as Donald Trump-esque real estate investors because every their home appreciates in value, they borrow the money out [aka a home equity loan]. This kind of thinking is really a loser's point of view. Why? You are continually indebting yourself to the lender. So who's winning, you or the lender?

It is not a zero sum game. Just because the lender is winning doesn't mean you aren't. If you are paying 6% interest on your mortgage and your home is appreciating 10% a year, you are both winning.

[jasaunders]

Originally Posted by Young Spark

I beg to differ... it is NOT controlled by you... the property title isn't in your name until a mortgage is paid off. Now if you own the home free and clear, then I will agree with you. But if a mortgage company owns it then the answer of it being controlled by you is no. The mortgage company can at any time foreclose on you if the mortgage payments aren't made... so how is it necessarily controlled by you?

I am not sure where you are getting this information from.
If I buy I home, which I have, I own the home, not the mortgage company. The property is not owned by the mortgage company.
The house itself is an asset. The mortgage is the liability.
Sure, the loan is secured by the house, but I am not renting the house from the lender.

If I have a $20k mortgage on a house valued at $500k and all of the sudden I can't pay and the lender forecloses, I am not going to be out the whole house. The lender would sell the house and collect what is owed to them and I would receive the rest. That's because it is an asset. When the house is sold, you still have an asset less the liability that was paid off.

[Create]

I am new here but have been browsing for the past couple of days.

I am guessing that a lot of these answers come from people who have never owned a home before. I have read pretty much all the Rich Dad books and a few others and still believe a home is an asset.

Let me explain. Contrary to YoungSpark and CDAllenGroup when you purchase a home you are the owner of it. The Mortgage company has a "lein" on the house, there is a difference between the two. The deed is in your name.

Anyway, any equity you put into your home when you purchase it in the form of a down payment as well as monthly payments becomes a future investment.

You need to know that "your house" doesn't mean "your mortgage". A Mortgage is a liability, due to the fact that it is debt. Here is how I think of it:

You buy a 150,000 dollar home, pay 30,000 down, and within 5 years pay another 10,000. During that time you clean up the property and the neighborhood grows a bit making your home worth 170,000. You sell it for 170,000 and make 60,000. There is a 20,000 dollar profit on your investment of a home.

[Create]

I haven't read it yet but another benefit to owning a home is the tax shelter it provides with all the deductions available. You can end up saving thousands a year on taxes which to me is another reason I love it.

I also have a home office at home that I work out of, I write that portion of the home off in mortgage, electricity, and water (has attached bathroom).

[TheCDAllenGroup]

Originally Posted by jasaunders

It is not a zero sum game. Just because the lender is winning doesn't mean you aren't. If you are paying 6% interest on your mortgage and your home is appreciating 10% a year, you are both winning.

True. However, if a person keeps borrowing on their house [by taking out on the appreciation], then you are decreasing your cashflow [seeing that you make only earned income like most folks]. So you're NOT winning, you're LOSING.

[jasaunders]

Ok, you are correct in cases where people borrow against their house.
But I would argue I am correct when people continue earning equity in their house.

[TheCDAllenGroup]

Originally Posted by Create

I haven't read it yet but another benefit to owning a home is the tax shelter it provides with all the deductions available. You can end up saving thousands a year on taxes which to me is another reason I love it.

I do like the tax benefits. But you don't have to own a home to have the deductions of a home office; you can be renting as well. You can write off a pro rata portion against your rent for the dedicated square footage that you designate as the home office.

I also have a home office at home that I work out of, I write that portion of the home off in mortgage

Be careful with that. I know the banks tell their clients to keep buying a bigger house [as their income grows] because they can write off the mortgage as a deduction, but it's a little known fact that at a certain income level, you no longer qualify for that deduction. Yes, there's an income cap for taking mortgage payments as a deduction.