is your house an asset or a liability ?

an asset is defined as something which increases your net worth , puts money in your pocket

a liability is defined as something that takes out money from your pocket

so , the house in which you live in is a liability .. it takes money out of your pocket

• property taxes
• electricity bills
• mortgage payments / home loan payments

all of them take out money from your pocket

you might argue that the appreciation of the property is an asset . well , it’s not guaranteed. in the crisis of subprime mortgage crisis of 2008 , homes depreciated a lot due to oversupply of homes .

if you have bought a home and are renting it out to others , you will be getting some money in your pocket – again , there is a catch – the rental income should be more than the mortgage payments / home loan payments that you are making.