Many folks (mostly boomers) believe that land/houses are by themselves a good investment. So they buy a larger house than they need and more land than they need and rationalize it saying it's the smart thing to do because "prices will always go up".
Of course if you buy houses and rent them out you can make money. Being a good landlord takes work though, and it's by no means a guaranteed way to riches. Having unused rooms in your house or land that's idle? Lousy investment. Summer home? Lousy investment.
I actually doubt that investment value is primarily what drove boomers to buy bigger houses. They did it because they wanted the comfort of a bigger house, and didn't value some things that they were giving up such as pedestrian neighborhoods.
Indeed, being a landlord is work, but I think that being your own landlord and pocketing the tax deductions and "imputed rent" is quite manageable for a family.
Of course if you buy houses and rent them out you can make money. Being a good landlord takes work though, and it's by no means a guaranteed way to riches. Having unused rooms in your house or land that's idle? Lousy investment. Summer home? Lousy investment.