The best argument I've heard (and I'm somewhat sympathic to) is to compare home equity with real estate investment vehicles.
1) REIT is a diversified bet on a group of high-grade properties that has positive cash flow, levered with a commercial loan borrowed at 3-4%. It's as liquid as stocks, and managed by someone other than you.
2) Home equity is an undiversified bet on a single residential property that has no cash flow, levered with a retail loan borrowed at 5-6%. It's fundamentally illiquid, and managed by you.
Here is a question: People normally consider it's dangerous to lever your REIT position. Doesn't it suggest that home ownership is actually risker than commonly perceived?
1) REIT is a diversified bet on a group of high-grade properties that has positive cash flow, levered with a commercial loan borrowed at 3-4%. It's as liquid as stocks, and managed by someone other than you.
2) Home equity is an undiversified bet on a single residential property that has no cash flow, levered with a retail loan borrowed at 5-6%. It's fundamentally illiquid, and managed by you.
Here is a question: People normally consider it's dangerous to lever your REIT position. Doesn't it suggest that home ownership is actually risker than commonly perceived?