Optimal Finance Daily - Financial Independence and Money Advice 3387: Why Your House Is A Terrible Investment by JL Collins on Real Estate Myths
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Dec 14, 2025 
In this insightful discussion, JL Collins, a personal finance writer renowned for his practical investing advice, challenges the conventional wisdom surrounding homeownership. He reveals the hidden costs and risks associated with owning a house, arguing that it often leads to poor financial returns compared to other investments. Collins highlights how homes can drain resources and limit flexibility while being influenced by emotions and subsidies. He even shares a tense conversation with a young renter about exploring alternatives to homebuying.
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Homes Often Look Like Bad Investments
- A primary residence matches many traits of a poor investment such as illiquidity, high costs, fragility, and concentrated risk.
- JL Collins argues these features make houses more like liabilities than productive investments.
Location Concentration Magnifies Risk
- Homes are immobile and tie owners to a single location, which concentrates risk from local economic and environmental events.
- This location-specific exposure can devastate owners' net worth if the neighborhood declines.
Checklist Reveals Home Weaknesses
- A worst-possible-investment checklist (illiquid, leveraged, taxed, immobile, unproductive) maps closely to homeownership traits.
- Collins uses this checklist to show why houses fail as financial investments.