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October 25, 2014

Billionaire: Home Ownership Still the Best Investment

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Billionaire: Home Ownership Still the Best Investment

John Paulson, a billionaire hedge fund manager, says that for those looking for the best investment possible, they need to look toward home ownership.

Do Others Agree?

At the Delivering Alpha conference, presented by CNBC and Institutional Investor, Paulson said: "I still think, from an individual perspective, the best-deal investment you can make is to buy a primary residence that you're the owner-occupier of. Today, financing costs are extraordinarily low. You can get a 30-year mortgage somewhere around 4.5 percent. And if you put down, let's say, 10 percent and the house is up 5 percent, which is the latest data, then you would be up 50 percent on your investment. And you've locked in the cost over the next 30 years. And today the cost of owning is somewhat less than the cost of renting. And if you rent, the rent goes up every year. But if you buy a 30-year mortgage, the cost is fixed."

Paulson stressed that an owner-occupied home — not a home bought to be a rental — is what he views as the best investment individuals can make right now.

"To buy it as an investment and rent it out — I'm not so enamored with that concept," he said.

Source: “Paulson: Buying a House Still Best Investment,” CNBC (July 17, 2014)