I remember having a similar discussion with my Dad about this 10 years or so back. Of course this was about the UK market, not the US, so the incentives are different (eg no mortgage interest relief) but his point was that before the 80s a house wasn't _meant_ to be an investment vehicle. It was meant to be a house, a place to live, a place to bring up kids, a place you can retire in and not have to worry about rental payments for the next 15 years or more.
The 80s perverted this concept, and suddenly people were buying houses as a short to medium term investment. The 2008 crash showed just how over-leveraged this concept can lead to.
So my question is "why _should_ there be leveraged investment opportunities"?
It's just allowing people who have the buffer to gamble and forcing people without that safety net to put everything on the line for something that shouldn't be a gamble. The haves will always be able to play the market safely and if they lose then they shrug it off, whereas the rest of us have to take a risk in order to play (with property it's the "I want a home, not an investment").
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The 80s perverted this concept, and suddenly people were buying houses as a short to medium term investment. The 2008 crash showed just how over-leveraged this concept can lead to.
So my question is "why _should_ there be leveraged investment opportunities"?
It's just allowing people who have the buffer to gamble and forcing people without that safety net to put everything on the line for something that shouldn't be a gamble. The haves will always be able to play the market safely and if they lose then they shrug it off, whereas the rest of us have to take a risk in order to play (with property it's the "I want a home, not an investment").