Q:

Is it valid to mix assets and expenses when calculating the worth of a house?

I'm trying to calculate (for myself, not relying on other people's graphs) when it becomes worth it to buy vs. rent.
On the positive side, there is:

the down payment,
property that (roughly, over the long term, unless you live where it was horribly overpriced during the early 2000s bubble) appreciates about 4%/year, and
a declining mortgage balance.

But on the negative side are ongoing yearly expenses, some which decline over the years, and others that keep on rising:

Mortgage interest,
PMI (maybe),
Property taxes,
Maintenance & repair, and
Home ownwer's insurance.

If after 30 years you wind up with a house that's worth $1M, but spent $700K in expenses, do you wind with an effective house-only Net Worth of $1M - $700K = $300K?
It seems like I'm mixing apples (assets and debts) and oranges (expenses).

A:

A house's value is whatever it is sold for when you sell it. This doesn't change based on how much you put into the house. There are a lot of examples of that, but let's say you buy a house for $100K. If you assume that the home's "value" increases at 4% per year (and inflation stays at 0%), your house will objectively be worth $324K at the end of 30 years.
So the home's value is simply what the house can be sold for when you are ready to sell. If you can't sell it (for example if a housing bubble comes up or external factors like somebody building a nuclear power plant next door), the house is worth nothing. 
The concept you are mixing up is return on investment (ROI) and value. Your ROI is the difference between what you invested and its value at the time of the sale. Value is value regardless of how much you put in it, ROI takes into account all the expenses you "invest" in order to get to the value in the future.

