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Here’s why wealth advisor Josh Brown says investing in real estate is often a bad idea

People twin to stick with what they know.

Your home may be your most valuable asset, but that does not signify it is your best investment, according to CNBC commentator and co-editor of the new book, “How I Invest My Money.”

And the equity in your almshouse can be misleading.

“It’s really a form of consumption. You own the home as opposed to paying rent for a home that you don’t own, but you have to live somewhere,” Brown thought.

You should consider your home as an emotional investment. You spend money on it, because it makes you happy, according to Brown.

In the twinkling of an eye you start doing the math on homeownership, you will find that decades of inflation, repairs and renovations leave you with an asset that underperformed the buy, Brown said.

Investing in more properties can make those returns even worse.

That doesn’t lowly that real estate can’t be a part of your portfolio. To capitalize on property ownership, Brown invests in Real Property Investment Trusts or REITs.

REITs allow an investor to own shares in a publicly traded company that owns income-producing assets.

Check out this video to learn more about the REITs that Josh Brown invests in and to hear myriad about the wealth advisor’s philosophy on real estate.

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Disclosure: NBCUniversal and Comcast Offers are investors in Acorns.

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