Why everyone wants you to buy a house? Why?

 Why everyone wants you to buy a house

For many people, their own home is THE capital investment par excellence.

Prices can go up as you like.

However, I am always amazed why people, for whom any investment beyond the savings account is already too risky, willingly shoulder high mortgages.

After all, most people have to go into a lot of debt to make the dream of their own four walls come true.

Where does this special status come from that the - mostly loan-financed - home enjoys in our society?

In order to understand the phenomenon one could ask: Cui bono? Who is it good for?

Who has (for decades) influenced the formation of opinions on real estate and benefits from it when the home investment solution appears in a particularly favorable light?

I spotted a couple of suspects ...

The Banks

... not only need savers (lenders), but also debtors (borrowers). Among other things, the banks, which are not quite by chance called credit institutions, live from the difference between credit and credit interest.

Of course, companies are also possible borrowers, but real estate mortgages are without a doubt an important pillar in the business model of banks.

So it is in the interest of the banks if part of the population goes into debt for their own homes.

So that there are always enough debtor candidates, the loan-financed home is made attractive to them in commercials ("Make space for your dreams!") Or they are deliberately denied living for rent ("Turn your back on your landlord!")

The message gets through to many. Because before you throw the money down the throat of a landlord every month, you can "pay off something of your own", that seems to be the general consensus.

The fact that it is renting space in one case and renting capital in the other is irrelevant when considering.

The employers

What interest might employers have in their employees going into debt for their own home?

The answer is simple and is already in the name: A property makes you immobile. Geographically and financially.

If you are in debt up to your ears, you will think twice about seriously looking up at your job and messing with your boss.

Who wants to jeopardize the financing for the "dream of owning a home" by carelessly jeopardizing their job?

For some employers this is certainly not inconvenient, because it increases the likelihood enormously that the dear employees will stay “on track” in the long term and are also willing to swallow a toad or two.

In many cases, house builders who are frustrated by their job are left with an internal dismissal because they can no longer afford the "external" dismissal.

The State

State institutions also have a heart for property owners. Especially in the form of easy-to-collect taxes.

Property tax is a convenient way to get money for the treasury. And the more often real estate changes hands, the more real estate transfer tax is due for the tax authorities.

A well-rounded affair for the state bag ...

The construction industry and craft

... are happy when the real estate market is booming. Because then a lot of new houses will be built and old houses will be modernized.

While landlords have traditionally been reluctant to invest in their real estate - some tenants will be able to sing a song about it - many homeowners are only really thriving when they redesign their living space.

As much as possible is being added and converted, because “there is always something to do”, as a large hardware store chain likes to emphasize in dramatically staged commercials.

More profiteers

There are a few other professional groups for which the real estate market offers decent income opportunities:

For notaries, the processing of property purchases is part of the (well-paid) bread and butter business.

Lawyers come into play when the parties involved in the purchase or construction process cannot come to an agreement.

There is also good money to be made in concrete gold for brokers, appraisers and energy consultants.

The parents

For many members of the parents' generation, owning a home is a central part of their lifestyle. It conveys a feeling of security and security - something that you would also like for your children and their savings.

If the children stay tenants out of conviction, this indirectly constitutes an attack on the parents' model of life. How can suddenly be wrong what has always been right for generations?

Quite a few moderate dissonances in families are likely to be due to differences of opinion on the question of home ownership.

I am aware of a case in which the father did not speak to his son for several weeks just because he dared to move into a rented apartment instead of - as the parents wanted - to buy a home.

Some home builders or buyers who share the parents' enthusiasm for real estate can look forward to a preferred inheritance, which is of course externally referred to as an "interest-free loan".

However, the money is strictly earmarked and it would hardly be imaginable that this equity injection could find its way into a securities account as an alternative.

The friends

Friends and acquaintances also look to their environment for confirmation of the greatest financial decision of their life.

Signing a loan agreement for several hundred thousand euros is certainly relatively exciting. At least in a sense, I imagine it would be exciting to contract a large chunk of one's earned income to a credit institution for 20 years or more.

In view of this scope, it is only understandable that people like to reassure themselves time and time again that they really made the best of all decisions. The higher the quota of homeowners among friends and acquaintances, the more one has the pleasant feeling of having done exactly the right thing.

Pink glasses?

Consciously or unconsciously, all of the above-mentioned interest groups contribute to drawing attention primarily to the positive aspects of a home.

There is no doubt about it.

I would never deny that rent-free living space, nicely designed according to your own ideas, is a good thing.

Unfortunately, in the vast majority of cases, this requires outside capital, which casts a shadow over the whole matter.

Anyone who plunges into the real estate adventure should definitely be aware of the risks of financing.

What to do with the money

Another point that is often overlooked, if not actively hidden: there is no alternative to home ownership as an investment.

I am always stunned when intelligent people of my generation (X) tell me with the conviction that nowadays there is NO other solution than to invest their savings in real estate.

Shares are not a good place to hold assets because they are ultimately “too speculative” or “too insecure”. Jeez ...!

Incidentally, it is precisely this ignorance of securities investments in combination with an almost naive love of real estate that has significantly led me to found zendepot.

From some readers' emails I understand that I was able to make a contribution now and then to at least correct the all too romantic view of real estate.

That really makes me happy.

But I also know that there is still a lot to be done.