Even if you ignore the fact that your capital is at risk (or do you think house prices never drop?) you also forget the opportunity cost of all that money sunk into the down payment.
I own property and only a fraction of what I pay each month goes to reduce loan principal. By this logic everything else I pay is "lit on fire". This is ridiculous logic. It buys me a place to live.
It also turns out that when I buy and eat a pizza, I built no equity either. Did I just light money on fire?
Property also goes up. I sold a quarter acre in downtown San Jose and bought a farm in Iowa. Which has since appreciated by a multiple. So, do that with rent.
> It also turns out that when I buy and eat a pizza, I built no equity either. Did I just light money on fire?
Obviously. If you would just buy a pizza restaurant instead, your payments would go towards your pizza equity. You'd get pizza, but you would also get returns from your mortgage payments on the pizza restaurant.
I own property and only a fraction of what I pay each month goes to reduce loan principal. By this logic everything else I pay is "lit on fire". This is ridiculous logic. It buys me a place to live.
It also turns out that when I buy and eat a pizza, I built no equity either. Did I just light money on fire?