Peter Schiff says homes are 'a money pit’ which ‘depletes' your wealth. Is it still ‘crazy’ to invest in real estate?

Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below. Economist Peter Schiff argues that the costs associated with owning a home can make it a worse investment than many people believe. During an appearance on a podcast, Schiff was asked about the common belief that owning a home represents a primary means of saving.

He strongly disagreed, stating that a house "depletes your savings" and is a "money pit." Home maintenance and repairs can add up to $6,000 per year, potentially amounting to nearly half of a home's value over the life of a 30-year mortgage. While property values may appreciate, market dips can occur, and inflation is the main driver of real estate value increases.

Schiff cautions that homeowners should consider the significant expenses and potential for zero or negative returns on their investment. However, real estate remains a popular investment choice, with a significant portion of Americans believing it to be the best investment option. For those seeking exposure to real estate without the associated costs and management, there are alternative investment options available.