I have had passive and active (?) income for over 20 years now (started during uni); I write code and manage my company actively, but I have ventures which bring me money without even looking at them.

I have always done the same thing; build something up in a niche, wait until I think it reached it's peak, sell it. Most things I did made between $5k-$10k / month and so sold for a nice amount. With that money I bought a house. Sure you lose some 'freedom' (not really as you can rent something anyway), but you always have the security that you can live somewhere rent and mortgage free. If I would have to do it again, I'd buy several run down houses on big plots of land and one smaller modern house.

Anyway; crisis or no crisis; I don't care; I live for free; next to that there is very little you need (in times of downturn that is; if you make enough next to that you can do anything you like). House IS an investment, but only if you just pay cash (IMHO). With that $100k income/year OP had coming in, in college I would've saved over $50k off that. Few years and plop; cash house. Even if you don't want to live in it the rest of your life it's good to have; takes away heaps of stress later on. At least did for me.

Many of those with underwater mortgages who treated their house as a investment came out nicely. Like a business would, they defaulted on their loan, then a few years later put their saved payments toward a house down the street at half price. Even got another loan too. Of course this is more difficult to do if you need to move for work.

But with rent you have zero chance of accumulating capital - your just throwing money at the landlord. With a mortgage you have a > zero chance of making money over say 10-15 years.

after 10 years of renting you will have nothing

Tsss.. I'm alwyas disturbed by such analysis. See. When you buy a house, not even an investment, you get a place of your own which gives you quite a peace-of-mind (you know where you live, you can break some things inside it without fighting the landlord and should things go really bad, you can still sell it). Moreover, moving around when you have children is much more difficult (because those little kids like to have their friends). Etc. Not every body is made to follow his work wherever it is. There's a reason why humans settled and stopped being nomads.

This article sums up the case against quite nicely:

http://20somethingfinance.com/a-home-is-not-an-investment/

There was another article aimed at startup founders, but I couldn't find it - found this instead.

> the "house is an investment" crowd

They are. What people neglect to mention is that some investments, houses included, fail to pan out, and leave you worse off than you were before. Simply assuming that a mortgage builds useful equity is financially illiterate: If houses were a sure thing, everyone and every institution would buy them.

The really insidious idea is the idea that buying a house is what a mature, responsible person does, and that you can't be a mature, responsible person unless you're paying down a mortgage. This is marginally less potentially harmful to your future happiness than the idea that mature, responsible people smoke five packs of cigarettes a day.

It is different in Australia though it's not an especially liquid asset anywhere. Market has flattened, but it's still strong. Prices tend to double every ten years but moved more quickly recently. Haven't heard of anyone not able to rent their property out. Most people who can afford to will buy property. There is no expectation that rent will cover a mortgage - you pay the shortfall and it's still a deal worth considering.