Final answer:
Investing in a house offers a combination of financial returns like rental income or capital gains and nonfinancial returns such as housing services. The potential for moderate return and risk, with low liquidity is a characteristic of real estate investments. The examples discussed illustrate varying outcomes of housing investments, demonstrating the potential for profit but also the need for careful market assessment.
Step-by-step explanation:
The question is centered on the profitability of owning a house, specifically whether there has been a financial gain or loss upon selling or maintaining the house.
When investing in a house, the return on investment (ROI) is composed of both financial returns, such as rental income or capital gains, and nonfinancial returns, namely the utility or 'housing services' provided by living in the home.
This dual nature of return can make the investment in a house distinct from other types of investments like bank accounts, stocks, or bonds.
The aspect of financial stability through taking out a loan is highlighted within the student's scenario, which may suggest considering refinancing options or acquiring additional funds for other investments.
The bottom line when investing in tangible assets like houses is that the rate of return can be moderate and the risk involved can be moderate for housing.
However, liquidity is low due to the time and energy needed to sell a house and access the capital gain.
In response to the examples provided regarding scenarios where individuals made profits on their houses, the outcomes illustrate the potential for both capital gains and increases in equity, which underline the investment potential of real estate.
However, it is also crucial to consider market conditions and personal financial situations before making investment decisions.