Kevin O'Leary Insists Your Home Isn't an Asset — Real Estate Always Goes Up? 'Ask the People Who Bought in 2007 and Watched Their Values Collapse'

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For years, buying a location has been treated similar a rite of passage—a motion you've made it. Kevin O'Leary says it's much similar walking into a fiscal trap with a granite countertop.

In a December YouTube video, the "Shark Tank" capitalist took a wrecking shot to 1 of the astir profoundly held beliefs astir wealth: that your location is your top asset.

"We've been fed this prevarication for generations that your location is your biggest asset. Wrong," O'Leary said. "Your location is your biggest liability."

And helium doesn't mean successful theory—he means successful monthly payments. "An plus puts wealth successful your pocket. A liability takes wealth out," helium explained. "Your house, the 1 you unrecorded in, takes wealth retired of your pouch each azygous month." He listed it all: mortgage, spot taxes, insurance, maintenance, utilities. "It's a wealth pit. And the bigger the house, the bigger the pit."

O'Leary past addressed a content that's shaped however millions warrant overspending connected housing: the thought that existent property ever appreciates. Buy a home, hold a fewer years, and merchantability it for much than you paid. But helium rapidly dismantled that too.

"Real property ever goes up successful value, does it?" helium asked. "Ask the radical who bought successful 2007 and watched their location values collapse."

It was a pointed notation to the lodging clang that caught an full procreation disconnected guard. In the years starring up to 2008, galore first-time buyers—especially Gen Xers successful their 30s and aboriginal Millennials—were encouraged to agelong their budgets successful pursuit of homeownership.

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When the marketplace turned, they were near holding mortgages worthy much than their homes. "Ask the radical who are underwater connected their mortgages close now," O'Leary said.

Even erstwhile spot values bash rise, helium argued, you can't really usage that equity unless you merchantability your home—or get against it. "Which is conscionable much debt."

"And fto maine archer you thing astir debt," helium added. "Debt is simply a instrumentality that makes affluent radical richer and mediocre radical poorer."

O'Leary took purpose astatine the mode banks substance the problem. "The slope approves them for $500,000. So they bargain a $500,000 house. That's insane," helium said. "The slope doesn't attraction astir your fiscal future. The slope wants you successful arsenic overmuch indebtedness arsenic imaginable due to the fact that that's however they marque money."