Why is it that cars and most other vehicles only ever depreciate in value, whereas homes generally appreciate continuously?
In: Economics
Because 99% of cars are mass produced and generic (meaning in 5 years you’ll still be able to see thousands of the same car driving around even though we’ve maybe gone through one or two model revisions since then), and cars have a limited service life based on age and how much you use and maintain them. Even if you don’t use them that much they still have parts in them that wear down with time and need to be replaced. And new cars always have new features that older cars don’t have.
Houses, on the other hand, don’t necessarily go up in value. It’s the *property* that goes up in value, because property, unlike cars, cannot be built in a factory, there’s a limited amount of it. And because there’s a limited amount of it, demand for it can go up pretty high, depending on where you live. Houses *can* go up in value, too, if you’re investing in the right projects. But most projects aren’t a $1 for $1 return – a $10,000 bathroom renovation might help boost your property by $5,000, for instance.
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