This may seem like a dumb question and maybe I'm just being really dumb here , but how should you consider a house in terms of your overall asset allocation?
I've heard it said that if you own a house/mortgage, then well, that's part of your AA and it's allocated to "Real Estate"...
But what part of it is?
For example, If the equity you have in your home is 20% of your total net worth, then do you have 20% of your AA in Real Estate? Is that how one should think about it?
Or is it the VALUE of your house that should be considered?
Or the value of your EQUITY + your MORTGAGE, but not necessarily the current market value of your home?
Is it worth considering this as part of AA at all, when its not necessarily going to "behave" like an actual REIT or some portfolio of rental properties would (those things I typically think of assets in the "Real Estate " bucket)?
I don't think you can say "I'm 100% equities" when you own a home or a have a mortgage, just not sure how to quantify it. Perhaps you're really 80% equities, 20% real estate. (At a high level)
Thanks for any thoughts!
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