Is a house an investment, an asset, or a liability?
An investment is anything you can buy and hold with the expectation that it will increase in value over time. The housing market in the United States is one of the most contested issues in 2025, with housing becoming seemingly unaffordable for many, and housing market crashes foretold in different parts of the country. For those on the road to financial success, affordable housing can still be attainable. It’s common to think of buying as a better use of money than renting. Is a house an investment, or is that a lie?
Is a House an Investment?
A house can be seen as an investment because you can recoup some of your money when you sell. When you rent, you cannot get that money back. Owning a house, particularly the land it’s on, offers some stability. Traditionally, houses also appreciate in the long term, so in that way, you can count a house as an investment.
On the other hand, it may not be an investment, but merely a place to call home that you put your savings into. While you can get a positive ROI off the mortgage alone, you are still losing out if you factor in property taxes, interest, homeowners’ insurance, utilities, and other expenses. In the end, these hidden but mandatory costs could even out the difference between renting vs. owning.
Is a House an Asset?
If a house is not an investment, is it an asset? To be clear, an asset is anything that holds economic value and can be converted into cash if sold. For example, a car is an asset, even though it depreciates the moment you drive it off the lot.
A house could be considered an asset. However, if you factor in the risks of managing a house and economic instability, you could go so far as to call it a liability. A house could depreciate dramatically at the time you need to move, and there is little to be done about the financial loss.
Is Real Estate Investing a Good Idea?
While you can view a house as anything from an investment to a liability, real estate investing remains a viable means of growing your wealth. A home is generally not considered primarily an investment, but rather a place to live. However, you can use your home as an investment opportunity if you are able to rent it out. Real estate investing is worthwhile if you understand what homes are likely to appreciate and how to renovate or rent them out to make a profit.
Trust the Professionals at Clagett Enterprises for Your Realty Needs
If you’re looking for an experienced property management company, the perfect realtor for your property, or a professional to assist you during your purchase of any home, you can rely on Clagett Enterprises. Clagett Enterprises is a full-service real estate company with almost 30 years of experience in the Frederick and Western Maryland area. For assistance with commercial sales, leasing, management, and development and consulting, contact us online or give us a call at 301-665-6009. To meet our team and see some of our beautiful homes, follow us on Facebook and Linkedin.