Virtually everyone I’ve told about the Southeast Asia Escape Plan has said it: “It’s a good thing you’re keeping the house.” It’s like a mantra of delusion. 

Now, I’m no financial advisor, but if you can swing it, I urge you to buy a house, especially if you’re young. This is because while cash is still king, equity is like the king’s beautiful daughter, the princess on whom you can project all of your dirty little fantasies. So go ahead, get you some equity. You can use it for all sorts of things. For example, you can use it to take a second mortgage to make your already outsized home bigger and more luxurious. Put in a pool. You can use it to take out a home equity line of credit, which you can use to pay off your enormous credit card debt. Or you can stake your home against a massive SBA loan to open a small business that will fail within a year. Then there’s the fact that even if you sell the house for less than you paid for it because the bubble that the real estate folks insist is not a bubble bursts, you still haven’t lost. Not really. Because you’ve lived in it at least long enough to establish a decent amount of equity, which is time you were not paying rent, which is the equivalent, investment-wise, to flushing your hard-earned down the toilet. So do it. Buy that house. 

But I’m pretty sure that, in terms of smart investments, real estate is low on the list, particularly if you’re not living in the house. It’s way down there below mutual funds, stocks, bonds, silver, gold, annuities (whatever those are), and your basic emergency savings account that returns .01 percent. It’s way, way below a mobile meth lab, which can give outstanding returns if you can tolerate the occupational hazards. Sorry, foxy real estate maven Joanne Kelly, the value of our house may increase over the next few years or it may not—remember 2008?—but even if it increases, it’s not gonna keep up with a good mutual fund that tracks with the S&P 500. Not a chance. 

“Surely, though, you’ll make a decent passive income from the house as a rental property. Right? And if equity is like the princess on whom you can project your dirty fantasies, passive income is like the princess’s many nubile and, frankly, desperate to find a man cousins, right? Right?”

Wrong. Not after you take into account the juice for the property management company, regular maintenance costs, the monthly pest control, the twice-monthly lawn care, plus the homeowner’s insurance, tax on rental income, and the, frankly, extortionate property tax we pay every year. As a $2,900 a month rental, our house will bring in well under 15k a year. That’s if everything goes perfectly. But everything will not go perfectly. Because entropy. And where there’s heat—which Florida has a lot of—there’s entropy. Then the termites move in—and you know they will—the water heater stops working, our neighbor’s tree falls on the roof, and we’re out a significant portion of the rental income for the year. Compared to the 10% or more on our investment we’d get from a decent mutual fund if we sold the house and invested the money, rental income on the house looks far less fetching. 

Maybe it’s actually not a good thing we’re keeping the house. Not financially, anyway. Maybe we’d be better off selling the house now before the housing market really cools off and buying Nike stock—which any teenager will tell you is basically the only single stock that regularly beats out the S&P 500—before it really heats up again, and, just like that, significantly increase our wealth. But maybe that’s not what our family, friends, and acquaintances really mean when they say, “It’s a good thing you’re keeping the house.” Maybe Colin nailed it with his variation on the theme: “I’m glad you’re keeping the house because that means you’re coming back.” 

“But, wait, you are coming back, aren’t you? Aren’t you?”

. . .