http://www.allenbostrom.com/a-house-is-a-liability-and-other-naive-notions--127.html Accounting for Small Business Thu, 19 May 2011 01:11:20 +0000 hourly 1 http://wordpress.org/?v=3.3.1 http://www.allenbostrom.com/a-house-is-a-liability-and-other-naive-notions--127.html/comment-page-1#comment-20 Drew Petersen Mon, 10 Aug 2009 03:07:11 +0000 http://www.allenbostrom.com/?p=127#comment-20 That makes a lot of sense. I, too was a little confused by "Bob's" idea that a home is not an asset. Bob is trying to get people to invest in real estate, and so I think he's just trying to convince people that owning the home you live in isn't "investing" -- he feels you need to own rental properties with positive cash flow. A mortgage is a liability, but if you are able to create positive cashflow (which would mean that you'd have to be renting it out for more than your mortgage), then that liability is effectively cancelled out and turned into an asset because it's making money every month. I am sure you understand this, but I'm just thinking out loud. Robert... I mean Bob... is a little confusing on this subject. That makes a lot of sense. I, too was a little confused by “Bob’s” idea that a home is not an asset. Bob is trying to get people to invest in real estate, and so I think he’s just trying to convince people that owning the home you live in isn’t “investing” — he feels you need to own rental properties with positive cash flow. A mortgage is a liability, but if you are able to create positive cashflow (which would mean that you’d have to be renting it out for more than your mortgage), then that liability is effectively cancelled out and turned into an asset because it’s making money every month. I am sure you understand this, but I’m just thinking out loud. Robert… I mean Bob… is a little confusing on this subject.

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