You're a pretty smart guy, but that's just DUMB.
Yes, as a property owner everyone who can will pick your pocket, but equity in real property is one of the few ways to build any real wealth for your business or family.
Renting can be advantageous to certain situations, but as you pointed out all your production is fleeting.
I said, “a bit of a...”.
What I mean by that is simply that it is not the panacea that so many think it is. It worked for my parents. It worked for me for a time.
In 1997 My then wife of 20 years decided she didn’t want to be married any more, so she kicked me out. We had owned the home for about 18 years. I rented.
Then I met the woman of my dreams just two months later at my 25 year class reunion. We rented in the Seattle area until we moved to a small hobby farm we purchased in rural KY in 2011.
In that time We lived in several houses that ranged in rental price from $1400 to $1600 a month. And the smallest was a very nice three bedroom home on Mercer Island just a couple of blocks from Paul Allen on “the scar”. The last one was a five bedroom with three full bathrooms just east of Renton on a 1/4 acre professionally landscaped lot. That one was $1600.
But here’s the deal. Had we tried to purchase that one at the time we left, it would have cost us almost $4000 a month including taxes. And as we all know, real estate collapsed. Now, it is now worth more than it was at its bottom, but the market is in a bubble yet again, so all bets are off.
Meanwhile, we not only saved tens of thousands by renting, but we were able to simply leave, without the headache of trying to sell a house. It was painless.
OTOH, if you plan on spending the rest of your life in your home, as my parents did, owning is a good idea.
"Equity in real property" may be a great way to build wealth, but that really depends on how you define "real property." The easiest way to explain the diminished appeal of home ownership is to look at it like a real estate investment. If you were an astute investor, would you ever even consider buying an asset that met the following conditions?
1. It generates no income for you. In fact, it will have a recurring negative cash flow for the entire duration of time that you own it.
2. You will likely have to borrow 50% to 80% of the purchase price -- which only reinforces the "negative cash flow" problem described in Item #1.
3. It is highly illiquid. It might take you weeks, months or even years to sell it.
If you just look at those three facts laid out there objectively, you'd never even consider buying a home as an investment. You'd be far better off just renting a shack or trailer home and putting all your excess cash in a well-diversified set of securities and revenue-generating investments.
Having said that, I'd suggest the following:
A. It's fine to buy a home if you have no interest or intention of moving for a long time, and you have a lot of control over where you live and work. It's cheaper than renting in the long run, and you might even approach this with the mindset of someone who expects to have an asset worth $0 when you leave it behind.
B. A lot of the inherent flaws I laid out in Items #1 to #3 go away under one particular set of circumstances: if you live in your home and you can use the property to run a business that generates sufficient revenue to cover most or all of the expenses of owning it. In that case, the home truly IS an investment ... which is why farms and other small businesses tied to a particular piece of property make a lot of financial sense for their owners.