In my country it is even cheaper to rent than but a house, you can pay around $1000 dollars a month for a really nice house, but around $2000 a month in a mortgage, makes less sense
Most people don't get tax benefit of 200$ with 24k standard deduction ; So I think it misleading to put out this video in 2020 with tax benefit. Remember. SALT deduction is only 10K. Sorry you are right... if I put 14K in charities.. I can take 200$ tax benefit
Buying a home is at best keeping the value of your money, committing 30yrs on a single investment is insane if you ask me. 3-5% is nothing, SnP 500 along goes up 10% each year, with proper investments you can beat that number at least in short term. Renting gives you more cash flow which can help you build actual wealth if you know what you are doing. Why do you think all the fund managers are working their arses off just try to beat the index? Shouldn't they be out there buying properties?
@@kaydens6964 yeah it’s crazy, but it actually does work. It is like renting a car or furniture or tools. Depends if you want convenience, just rent. If you want stability buy. Personally, I have seen a lot of older people struggle with rent, thinking renting forever will be great. They end up back with kids or in a dilapidated home or apartment stressing g about rent
@@betruetoyourself7162 I’m all for buying a place to call home if you can afford to do so. Just a bit idiotic to think it as a financial investment option. It’s more like a forced monthly payment for people who do not know how to manage their own money, so when they get old even if they spent all their money at least they have a place to live.
@@betruetoyourself7162 idiotic to think it as a investment. You are leveraging a large amount of money to bet your situation do not change for the worse for the next thirty years. For example, just a year ago pilots were great jobs, and now most of them need to find something else to do.
Rent is cheaper when you have a roommate that covers half of the expenses. It has worked for me, and was a great method of paying off my student debt. As of july I am debt free. Owning a home is nice, but dont forget it aint just the motgage you gotta pay. But also the property tax.
@@davidaaron28 I agree its just that in the event something goes wrong, you are fully responsible for repairs and maintenance. And if you lose your job and/or decide to move to another place for work you still got to go through all that hassle and hope someone will buy. I still would rather prefer to own a home but i gotta live within my means for now.
And homeowners insurance, HOA fees, landscaping, list goes on and on lol. Still glad I did it when I did. 2009 during the crash, at the closing table and the previous owner was cursing me under their breath lol
There are no separate property taxes with renting. No huge deposit. No repair costs. No homeowner association fees. No home insurance. No lawn maintenance. No 20-30 obligation to pay every month without leaving. Complete freedom to leave anytime without having to find a buyer.
The only reason I rent (despite rent hacking so that I basically live for free) is so that I can save up for mortgage deposits. And I also rent additional apartments to then use in my Airbnb business as that model is much easier to scale than owning (at least at my current net worth)
I felt so miserable owning, because I couldn’t move when I wanted. It took 4 months of planning to sell and move to a new location. I will be very careful before buying my next home. It’s like a prison. I would rather be free and pay a little more by renting.
I absolutely hate moving, I don't get it, my house is like my wife, the first time I laid eyes on her I knew she was the one, why would I move from my beloved house?
I on Rental properties but I rent aswell I love being able to pick up and leave or just have amenities that I borrow and give back. Great videos brother
I wish everyone realized this instead of glorifying homeownership as the holy grail. The decision to buy a home is complicated for all the reasons Jaspreet described. Please take note, people. Renting isn't bad if you do it wisely whilesimultaneously saving and investing. I know so many people who are "house poor" because they've been told homeownership is essential. Thank you, Jaspreet & Minority Mindset!
I needed to read this. My boys have been telling me to buy a house and I rent right now and can create my own savings and investments and avoid being house poor
Everybody at work pressures me to buy "I only pay xxx in mortgage" but there are hidden costs and this demonstrates so wonderfully I will just link my colleagues to shut them up.
I agree 10000%. Where I live, renting is frowned upon, but housing is EXPENSIVE. I have a close friend who has purchased his own home, after mortgage payments, he barely has money to survive and depends soley on overtime (which isn't guaranteed)... Meanwhile I am renting, and because of videos like this I am able to set aside money for an emergency acct, future savings for my kids, an account saving money with which I will use for investments. I REFUSE to fall into that mortgage trap
You could have a mortgage on an investment property instead - interest only. Pocket the difference in rent and remortgage at the end of every term - reinvesting the gains (but bearing in mind that capital gains are taxed when you liquidate). Watching these TH-cam videos is teaching me a lot.
@@Itsdjsigi I own my own home and mortgage is not 'locked in for good'. Property taxes and homeowners insurance go up every year and this makes your mortgage payment go up also. A friend of mine, who owns her home had another $400.00 tacked on to her mortgage payment each month because of this. You never know and can be hit with this at the end of each year unfortunately.
@@sandysimmer1279 My co worker told me this happened to her recently as well, thank you for the info.. I wasn’t as informed when I posted that comment.
I bought my 750sqft home for $24k cash. Good neighborhood, decent shape, taxes are only $90/mo. Closest rental in my area comparable to my house is $900. I think I made the right call buying lol
congrats on your investment, that is small....wow. I own a 1000sqft home. Its me and my two cats. I feel closeted and looking to get a bigger home. I too am in a wonderful neighborhood, middle class educated folks who are pharmacist, teachers and nurses. Near by great downtown shopping and restaurant area.
Ever watch The Money Pit? That was us. Bought a waterfront property that turned into a nightmare on every level. We sold it six years ago, and the new owners also sold it. Been renting since, and now my money is in the bank instead of a contractor's pocket.
I know of someone who bought a house, invested time and money renovating it, and diligently paid the mortgage for 26 years. Sadly, illness struck, leading to the loss of their home. The devastating blow sent the homeowner into a deep depression, and within a year, they passed away. It's a heartbreaking reality that often goes unspoken; we're accustomed to hearing about "forever homes," but life's twists can sometimes shatter those dreams.
If they had rented their whole life what would have been different? The problem appeared to have been a devastating illness and the financial catastrophe that followed. Losing the house was terrible but maybe the equity kept them from incurring a debt that got passed on to their children. Would they have been any less depressed if they were half a million in debt from medical bills? I don't know that for certain but after 26 yrs. they would have had considerable equity built up, if not paid off. No house is forever, we all die, what matters is how we live and if owning a home is right for you, then you should do it.
Don't forget closing cost unless you can negotiate them in, but with the way the market is right now that will be hard. On 400k closing will be over 10k could be different but from what I have seen im thinking closer to 15k+. So you can add that now your looking at 90,000+ to move in.
Importance of paying off your home early. Payed my home off in 3 years. Now I have a newer home and no mortgage. Yes I could have put all that money into investments but I secured my place of living outside of utilities and taxes. And if so thing goes really wrong I can work a minimum job to keep a roof over my head
There’s nothing wrong with renting as longest you realize eventually you could buy a home. However some people are better off renting would you rather go back to the fiasco of 2008 or rather have people be responsible and buy homes with time.
@@eliot5220 renting is better if you plan on staying in the place for less than a year. It doesn't make sense to buy a home if you plan to move out in 8 months. However, my opinion is different if you plan to stay longer than a year. The issue is at that point is everyone don't qualify for a mortgage and this is why we have a renters market.
One thing you forgot Jaspreet and that is, for most people, a house deposit will be most of their wealth. Then they use it to buy one house in one neighbourhood. They are concentrating their wealth, there is no diversification. They tie their financial future to the success of the housing market in their area. If they rent they can invest in a variety of assets.
Investment property is better than owning your own property for yourself. The best thing to do is buy an investment property in an area where development is barely beginning so that in 10 years it is a solid investment property that yields a lot.
Should also include closing costs of buying and selling, as these are thousands of dollars and make short term ownership highly impractical. Realtor fees are about 5% of home value.
Please don't buy unless you're ready. I don't think family would enjoy helping you pay for a leaky roof or plumbing. Just because they think what's best for you. It can put you in deep debt.
Don't let anyone scare you into buying a house. If they really think you should build equity than just put your money in a bank. It's a much cheaper savings account.
@@traceycolvin0504 ... I agree. I asked asked them the same question and they made it seem like maintaining a house is not that expensive. It’s hard, but I won’t succumb to the the pressure though.
@@jordanroberts7931 ......Yea, I’m really not ready. I recently started investing and I’ve made some profits during that time. I think I’ll stick with that for now until I’m ready to buy a house.
@@MsKerry-lp1ue Do any of your family or friends own a house? Ask them how much are their expenses each month. Not only are you paying for property tax, there's heating which can cause an arm and a leg during the winter months. Lord forbid if the furnace happens to go out. Water bill can be high and don't forget about maintenance and up keep of curb appeal. Just to name a few of the things I had to maintain in keeping my home up.
Ahhhh thank you for the wake up call! I was staunchly a renter then felt the allure of home ownership and started looking again but you’ve reminded me that I need to run the numbers instead of just listening to heuristics
I'd rather own a home off in the country somewhere so i don't have to deal with the power of landlords and the annoyance of neighbors telling me what to do
@@sergiyprykhodko6222 That's why he said "off in the country"-- less zoning hassle. Of course you can look into the laws and pick a work-around even in more urban areas. My (urban) county puts a numerical limit on hens and forbids roosters. A male duck is a "drake," so apparently they forgot to regulate waterfowl. Unfortunately it is the ducks that are loud rather than drakes, but you need ducks for eggs (& both for duckings & therefore meat), so this is still better if you live at some distance from your neighbors. In the right climate or with the right shelters, muscovies (wart ducks) are much quieter than domesticated mallards (all other domestic breeds) though they're more of a meat than egg breed. Aquaponics probably won't be regulated either (no noise, except for the plumbing). Rabbits and guinea pigs are essentially silent, but sometimes the cuteness leads to animal welfare rules that consider them pets rather than livestock. Anyway, look at the laws and see what you can do. Sadly property taxes are so high in many areas that the savings value you get by growing your own food probably won't match the money you give to the government. In America, food isn't a top 3 expense. In an urban area, the economic thing to do is rent out floors you don't use, though I am not personally sure I am on board with the hassles of being a landlord, and the homesteading thing is definitely a more enjoyable hobby IMHO.
I disagree I own rental properties but rent where I live because in my profession I want to be flexible to move whenever I need to for a job opportunity, and it free my time up so I dont have to deal with maintenance.
@@tidey4 that makes no sense. You already do maintenance on your rentals, correct? ? Your home you pay down on your principle. If you bought right , and right location it will be easy to sell and move.
@@recyclespinning9839 Yes I do, but the rentals pay for themselves with left over cash flow. I'll eventually buy a house but at this point in my career I need to be flexible to new opportunities. All I'm saying is that buying a house is not a correct solution for everyone. Also there's no cookie cutter solution,everyone needs individualized answers.
Owning always prevails over renting, the only exception is if you can’t afford home ownership, otherwise your just giving 2500/month away to someone who took advantage of homeownership I.e. landlord....There’s an end to a mortgage or ways to create equity or leverage by renting out your home...there’s no end to renting.........................!
That's ridiculous. There are major unrecoverable costs of ownership like mortgage interest, higher insurance and property taxes, and the opportunity cost of home equity v stocks/bonds. I'm not saying no one should own, but renting is also perfectly viable.
Im single and rent from my friend. He owns the house outright he worked hard to pay it off. But I get low rent and I save the extra money and buy guacamole and ETFs.
I second this. Not having to worry about having pets, growing a family, having guests come over is priceless. Humanity cannot be quantified. I have no problem renting while I am young but I dont' want to rent when I plan on settling down. There are always ways to rent out this home and move.
That's fair, I'd say plan accordingly. The myth is, a home is an investment, which is false. If you're young, invest your cash and buy when you have a family
I understand what you say...But, all your info, is base on me living in the USA. The world is a big place.. show us about opportunity (AROUND THE WORLD) for older people (40yrs and up) what to do, show us, were to look online for that information.
When I bought my 1st home in 2005, I underestimated the cost of non mortgage items, and the one thing that jumped out at me is maintenance, this is a very overlooked cost of ownership when going from renting to buying.
I think the attraction in owning is that you are fairly sure that as long as you meet repayments you won't need to move perhaps every few years as Renters sometimes do. This is particularly important where kids are in Schools they feel good in, have friends in the neighborhood etc.. Home ownership, especially after the Mortgage is paid off, also gives a person a sense of stability ....something that is missing in almost all other aspects of life these days.
This is why I used the VA home loan 0 down. There is no PMI. I bought a condo over a home because all utilities were included in the HOA fees. Its cheaper to own a 3 bedroom than rent a 1 bedroom.
You missed the most important point. If you're paying a mortgage then you should have a paid off house to live in when you retire. If you're renting then you'll still have to pay all the way through retirement...
The argument is that when you rent you invested your down payment ($80k in this example) so when the renter retires they'll have $1,586,991.95 of investments ($80k invested for 30 years assuming a 10% return). Personally I think I could live off that no problem in retirement.
Agreed. If you rent, you’ll pay rent forever. If you own it, eventually you’ll freakin stop making payments and get to enjoy that extra cash for something else. Also, you have to look at it like this... If you rent: You paid out $400k and walk away from that house with empty pockets. If you own: sure you paid 400k but you can sell that dump and get your 400k BACK when you walk away from the house, essentially, living for FREE that entire time. 🤷🏻♂️
One thing you didn’t mentioned was that every year the rent payment goes up and the 30 year mortgage payment stays the same . So the goal is if you’re going to rent to only rent for 2 or 3 years the most, not for 10 or 20 years . after 2 or 3 years it’s more convenient to get a mortgage.
Your property taxes are subject to increase every year as well. The local school district, community college district, university system as well as you municipal, county and state agencies may propose a mil increase on property taxes. Those jokers take turns raising taxes. Im still a home owner and would not suggest not owning a home or property to anyone unless they were under 25.
Thank you mister. You are one of the few influencers here that made me decide that renting is better for now. Maybe when my financials are really good and allow me to afford a better down payment then I’ll buy a home. Another tip is having two incomes from a spouse or partner is way better than one. I will look into investing and making good ROI over paying so much money for a home.
My mom sold her home after 50 years for $285k. Now purchased retirement home for $72k. Put $100k in bank and $50k in stock market. She has no money worries and watches TV all day. Next door neighbor pays $1,000 month rent and has to work p/ t at nursing home. Who is better off ?
What if the guy spent the last 50 years investing 500 bucks every month since he didn't have to pay for repairs, property tax and home insurance? He'd be worth 2 million.
The point is for your "Average US Citizen " buying a house and paying it off in 30 years is good for raising a family and then an investment. Plus, your chance of success is extremely high.
I am seeing some discrepancies here? Where did the rest money($63000) go? To be in your mom’s position, people need to have $285000 home to begin with. Not everyone has it, especially those who are relatively new immigrants.
I postponed buying home until I'll have at least 10 cash flowing units, my preferences are duplexes/4-plexes. Besides my day job, side business and managing rentals, I don't have much time left, so renting works perfect for me. Saves tons of time and money. Here is a smart advice - when I'll be buying house in about 2-3 years, the best way will be buying fixer upper (say for $300k), add value and fix it up for $40-50k and get new appraisal for $400k. Boom, you became richer on $50k, and you did complete remodel for your custom needs - kitchen, bathrooms, flooring that you want etc.. By the way, you can add rehab costs to your mortgage, I think its called 203(k), dont remember exactly. Also, Home Depot has super convenient Pro options, so you can buy materials with 60-day interest free, or take a loan with low interest rate and pay it later. Millions of options BESIDES traditional buying overpriced houses with realtor
Your landlord (if they're smart) pays all the expenses associated with owning the home and still turns a monthly profit. Therefore buying is obviously cheaper, but it's not always practical/possible.
Fullerton, Ca, in the 7.7 years we've rented, we have given Jacob Landlord about $140k. So, even though the cost of buying a home is extremely costly, we don't want to be renting for the rest of our lives. We didn't buy a dream home, but bought a fixer upper that has a unit to rent out. Our plan is long term about 14 years.
The problem is that when the investment is your primary home if house price increase the overall cost of all other houses in the market will also have increased so u also end up purchasing an inflated property. So zero sun game really.. Ofcourse it makes sense if u move from higher cost area to lower cost
This is very specific to USA, if you own a property in Portugal where i live, you dont pay 340 euros/month in property tax, a 400k euros house pays around 700 euros/year and building here is done to last, i live in the same house for 20 years and we only replace home appliances, and some new paint time to time..
The math is wrong the mortgage would around 1600 dollars a month for a 3% 30 year on a 400k house. And get real property taxes on a 400k house are more like 600 plus a month. And mortage insurance another 100 plus homeowners another 150 a month. That's equals 2450.
Love ya Jaspreet! But I totally disagree of factoring in the 'opportunity cost' to the "Buy" side of the comparison. The long-term opportunity in buying the house to live in is EQUITY, which someone NEVER has renting. In addition, rents and property taxes trend UP, as well as the desire of the landlord on a rental to increase his/her profit, so over time your rental expense likely increase much more than property tax and maintenance costs on a home. A final point is that you can pay off the house early, while you can NEVER finish paying rent. Thus, over time your costs can drop dramatically, even allowing for property taxes and repairs. Food for thought; your mileage may vary. Keep up the great work!
Your videos are the best i have come across. Depending on where you are in the world, whats your take no buying a piece of land and build your own house.
One thing missing is that housing insecurity isn’t mentioned when you rent ! I’m turning 50 and just bought my first home so I have rented my whole life so far and have been subject to landlords rising rent, sometimes significantly, and landlords selling the property so having to move with a few months notice ( 2 months notice one time) . Buying is security
@@bigchills7194 Don't mean to be a pessimist. But no money down isn't a good thing. It just means you have no skin in the game and a higher probability of defaulting in the future. You can pay down your home, but the cost of property taxes only rise and will get you.
I've been a landlord for a 4plex apartment. I've owned 3 homes, including an acreage. I sold and started renting. I love renting... Freedom, less stressful and it allows me to pursue job opportunities and live in different places. I have a huge income. No dependents and no heir. 😊
Spot on video and if you like changing out vanities, cabinets, flooring, etc., as trends change you will need approximately $800 per month for repairs and remodels as trends change.
The best way to learn the real estate market is by starting with your own house - that way you go through the whole process of mortgage, downpayments, repairing issues. This is why I prefered buying my house instead of renting. But like you said, it depends on the time horizon!
@@Nuvision19 I totally agree with you! And when you're done with the mortgage, you can buy a new house and use the old as a passive income source. At least this is my plan.
I used the VA home loan. No money down and no PMI. I live in Iowa my house is 190k at 2.25% interest. When accounting for the principle, loan and property taxes I pay 1,060 a month
Some things to counter point...for home owners learn to do your own repairs (TH-cam and hard work saves thousands) and homeowners warranty. Spend $400-$600 a year and have piece of mind that if anything breaks like a washer, hvac etc, it's covered.
@@johnjacob688 mostly likely those houses paid in full are for long time home owners.. I'm saying for first time home buyers...take it from somebody has being paying a mortagage for more than 10 years
Good topic!! Many American towns have few jobs with salary w/ 40k per year.. The math never works! Americans get marketed $250k homes by news, etc.. Thanks
That's probably assumed in the mortgage with escrow. To be fair, your mortgage on a $400k property will never be $1,300 lol. Maybe $1700 at the cheapest.
@ sure in this scenario. But the vast majority of people just get into FHA loans at 3% down so this scenario is even worse for them with PMI. The most expensive "savings account" in the world.
Good video, Jaspreet! Thanks for posting. A few things to consider. When buying a home the mortgage devalues over time due to inflation but rents go up. So for a 30 year mortgage that 1300 will stay 1300 over 30 years but the rent could increase to over 4K, 5k within that timeline. Mortgage will also decrease to zero once it is paid off. And that’s huge for retirement. Social security and 401(k) distributions can only go so far to pay for living expenses once you retire. Would be good to live in a paid off home and only need to pay property taxes, homeowners insurance and maintenance.
I started looking to buy a home because I thought it would guard against skyrocketing rent prices, but now I'm seeing rents tick down slightly from the peak in the summer, plus I just don't have the bandwith to make a downpayment without being broke.
definitely especially now a days where tenants have more rights than the land owners do and in areas like mine even squatters have more rights than the land owner...
Yes renting is the most convenient. Just plan to rent during retirement and you would be okay. Just remember, the older you get the more conveniences you need/want. If a landlord provides it to you, be prepared to pay a premium
Love the insights. I was considering buying a condo for my kids to rent, but it would stretch me too much and with the lost opportunity costs, etc., I’ve stepped back from that plan.
It’s crazy, I have a rental property that I just paid off last year and now I get $950 a month in passive income. After the virus is done with I will be looking for my 2nd rental property!!!!
No property tax in the UK. Me and my partner both pay £175 a month each for our mortgage. 10% down and the same property would be 5-600 to rent. This does not apply to everyone's situation. I actually lower my monthly expenses through home ownership
That's flipped. People rent the house they need today, but they buy the house they want in the future. In general, people buy more house than they would otherwise rent.
Home owners insurance as well, so he starts at just a straight mortgage payment. Also you dont have to put 20% down, PMI comes off after you have 20% equity in the home. Also when you build up the equity, pull it out to invest. Renting somewhere and buying a rental property, you will have to put 20% down and the taxes are higher on an investment home. Unless you get the home with a residential loan. Plus when you have the rental you bought you will be paying all those repairs you just mentioned your landlord is covering because you are the landlord. If you do make profit from your rental you will pay tax on that, your renters will be accepting a renters credit for sure so its a bit hard to hide. Both are good ideas, you must be disciplined.
@@LuMusk I once rented a room from a lady that had a bf staying with her that was on drugs. He broke into my room and stole my TV, Playstation, and Laptop. It was the first and last time I rented a room from anyone.
Rent will increase though to factor in appreciation....That 2500 would likely be 2700 after a year or 2 (depending on lease terms) while your mortgage will never increase (assuming fixed rate; taxes likely go up, but overall fairly stable)
It also depends on where you live. 2008 screwed up even the people who didn't lose their homes.While NYC and California homes may have doubled or tripled in 20 years, many people are barely back to pre-crash values. I live in a suburb of Chicago and while some higher end suburbs and homes in the city itself recovered quickly, even nice homes like mine did not. I bought my home in 2002. It did not get back to what I paid for it until 2015. It just barely got back to its 2008 value recently and that is because of this weird COVID price hike. Contrast that to my first home I bought in 1996, sold for 26% more in 2002 and sold for less than the 1996 price in 2014. Given the interest, taxes, new appliances, landscaping, etc., I have lost money on the house at this point. Yes I have the equity now when I sell but a lot of people don't spend 10-20 years in the same house.
Given the revised standard decution and mortgage interest cap most homeowners are not able to get the benefit of mortgage interest deduction. Property taxes are also capped to 10K/year
I don't know if it applies in US but in Canada you also have to pay income tax on rental income. So $2500 rental income is more like $2200-$2300 after deductions.
Just because renters don't pay property tax directly doesn't mean they don't pay it. Renters pay the property tax bill indirectly through their rent. The landlord always passes the cost of the property tax bill onto the renter, they just include it in the rent like water usage and garbage pick up bills.
he did say that property taxes are included in the rent... this is beneficial to people that cant afford these expenses on their own which makes renting attractive especially in multi family homes as the expenses of the property are split up among multiple tenants.
That is why we do all our own work on our house. We replaced a third of our roof with metal for $2000 and that section should never have to be replaced again. We installed a swamp cooler for $500. We spent $500 repairing our eaves and installing gutters. We spent $70 on a plumber. Those are all the things that we have had to do and pay for in 7 and 1/2 years of living in our house.
another way to look at it your house would have to gain approximately $245,880 in value over 30 years to offset the property tax and repairs estimates not taking into account your prediction of 25 years needing a new roof for said house or garage which if skipped out on would also cut into the property gains of your home
Well if you feel broke or you wanna get richer, look at the chart for Apple,Amazon, Tesla, Etsy ,McDonalds. Then look at the chart for gold and silver . Then ask your self what you would rather invest your hard earned money in . Also look at the charts for these stocks during the 2008 financial crises and the global pandemic of 2020 . Did gold live up to its promise as safe-haven ?. Gold and silver crashed together with stocks . so if you want to start building wealth with your hard earned money , which asset is better ? The charts speaks the truth louder than the hot air coming out from the mouths of gold and silver bags I rather invest In bitcoins , make more than enough of my capital rather than to continue to recycle in gold and silver that always promises to be a long term investment year in year out.
1. the mortgage includes property tax. 2. FHA requires 3-5% down (at a higher cost of points or interest, which can be refinanced when you hit the 20% equity. investment properties are 20%.)
Ah, I got pretty close to that. I paid a little too much because when I was buying inventory was low, so I had to settle for a 3BR instead of a 2BR. Patience is important if you're chasing the dream. I wish I had extended my apartment rental for another few months for my house hunt instead of buying early. Or if you can't be patient, at least stop browsing Zillow once you've decided to buy so you don't see the houses you could have bought.
Your 10-year plan is a big one. Most people when buying their first house are like: “this is a good starter house…. For 3-5 years….. If I own a house I can sell it for more money to buy a newer one when I know I can afford a house”. So, the house does not have to be perfect now…. Maintenance, Upkeep, Taxes, Purchasing fees, Realtor fees. These are perfect examples make sure when you are looking for a house you are planning to stay there awhile, value does not grow overnight.
Wow, this was actually more valuable for me to sit through than sitting through a Ramsey Show video. Lol. Sometimes he doesn't make his reasoning very clear. You both have the same idea, ie, don't buy a house when you don't know where you want to settle down, but I like that you broke things down. Thank you for your insight.
Thank you for watching! If you enjoyed this video, you should watch - How To Earn Passive Income With $1,000: th-cam.com/video/nGa53uNPNMM/w-d-xo.html
I pay 525 a month utility included plus free cable😌😌😌
Your channel is great, but has so much spam. They even opened a minority mindset username
@@betruetoyourself7162 mcmgm
In my country it is even cheaper to rent than but a house, you can pay around $1000 dollars a month for a really nice house, but around $2000 a month in a mortgage, makes less sense
Most people don't get tax benefit of 200$ with 24k standard deduction ; So I think it misleading to put out this video in 2020 with tax benefit. Remember. SALT deduction is only 10K. Sorry you are right... if I put 14K in charities.. I can take 200$ tax benefit
I've had both. I rented and I owned property. Its all up to what's best for you, but do your homework. Don't just jump into it.
That's the real message and an honest one.
What was best for you?
@@letsgetjackdup9952 Owning my own property was best, because I had children and they had a back yard to play. There was even a swimming pool.
Exactly
@@winter051 absolutely
Thank you Jaspreet for giving me a reason to look forward to 7:30 a.m. 👌🏼
MM the first thing I watch in the morning 🔥
4:30 am for me. Popcorn (cereal) ready
Haha right
I seriously wake up for these videos! :]
5:30am here lol
Halfway through this, my wife told me that the toilet is leaking.
figures
Trees eat
IMO - it’s a zero sum game at the end of it ..
😩 last think you wanna hear right now
Lol
He forgot, that rent goes up every year about 3-5%. Plus, the owner can kick you out if he wants to sell the place.
Buying a home is at best keeping the value of your money, committing 30yrs on a single investment is insane if you ask me. 3-5% is nothing, SnP 500 along goes up 10% each year, with proper investments you can beat that number at least in short term. Renting gives you more cash flow which can help you build actual wealth if you know what you are doing. Why do you think all the fund managers are working their arses off just try to beat the index? Shouldn't they be out there buying properties?
@@kaydens6964 yeah it’s crazy, but it actually does work. It is like renting a car or furniture or tools. Depends if you want convenience, just rent. If you want stability buy. Personally, I have seen a lot of older people struggle with rent, thinking renting forever will be great. They end up back with kids or in a dilapidated home or apartment stressing g about rent
@@betruetoyourself7162 I’m all for buying a place to call home if you can afford to do so. Just a bit idiotic to think it as a financial investment option. It’s more like a forced monthly payment for people who do not know how to manage their own money, so when they get old even if they spent all their money at least they have a place to live.
@@kaydens6964 wow idiotic to buy a home? Ok if you think that, good for you
@@betruetoyourself7162 idiotic to think it as a investment. You are leveraging a large amount of money to bet your situation do not change for the worse for the next thirty years. For example, just a year ago pilots were great jobs, and now most of them need to find something else to do.
Rent is cheaper when you have a roommate that covers half of the expenses. It has worked for me, and was a great method of paying off my student debt. As of july I am debt free. Owning a home is nice, but dont forget it aint just the motgage you gotta pay. But also the property tax.
If you're renting you are very likely paying property taxes too. It's just "included" in your rent payment.
You can have a roommate owning a home too.
@@davidaaron28 I agree its just that in the event something goes wrong, you are fully responsible for repairs and maintenance. And if you lose your job and/or decide to move to another place for work you still got to go through all that hassle and hope someone will buy. I still would rather prefer to own a home but i gotta live within my means for now.
And homeowners insurance, HOA fees, landscaping, list goes on and on lol. Still glad I did it when I did. 2009 during the crash, at the closing table and the previous owner was cursing me under their breath lol
There are no separate property taxes with renting. No huge deposit. No repair costs. No homeowner association fees. No home insurance. No lawn maintenance. No 20-30 obligation to pay every month without leaving. Complete freedom to leave anytime without having to find a buyer.
The only reason I rent (despite rent hacking so that I basically live for free) is so that I can save up for mortgage deposits. And I also rent additional apartments to then use in my Airbnb business as that model is much easier to scale than owning (at least at my current net worth)
Smart move
I felt so miserable owning, because I couldn’t move when I wanted. It took 4 months of planning to sell and move to a new location. I will be very careful before buying my next home. It’s like a prison. I would rather be free and pay a little more by renting.
Wow this is how I felt (recently sold my home)
Are you kidding me ! You felt like this too ?! Wow 😯 I guess that’s how it is sometimes
Thank you all for your comments, I didn't know it felt like this. I'll stick to investment properties for now
I absolutely hate moving, I don't get it, my house is like my wife, the first time I laid eyes on her I knew she was the one, why would I move from my beloved house?
I felt the same way. Sold 2 weeks ago
I’m just going to buy an old 500 dollar van and live in it 😂
Live down by the river!
Looking more and more like the new American dream
I on Rental properties but I rent aswell I love being able to pick up and leave or just have amenities that I borrow and give back. Great videos brother
I'm heavily into real estate too. My funding for most of my projects comes from my crypto portfolio. Are you in crypto?
That freedom is good. I don't move as much now so purchasing made sense for me.
I wish everyone realized this instead of glorifying homeownership as the holy grail. The decision to buy a home is complicated for all the reasons Jaspreet described. Please take note, people. Renting isn't bad if you do it wisely whilesimultaneously saving and investing. I know so many people who are "house poor" because they've been told homeownership is essential.
Thank you, Jaspreet & Minority Mindset!
I needed to read this. My boys have been telling me to buy a house and I rent right now and can create my own savings and investments and avoid being house poor
They don't know basic maths and what is opportunity cost haha
Everybody at work pressures me to buy "I only pay xxx in mortgage" but there are hidden costs and this demonstrates so wonderfully I will just link my colleagues to shut them up.
@@Wahinies yeah when they see this they gonna be like ! Whuuuuuuuttt!! 😯😂
@@Wahinies People can pressure you all day long. When you need work done on your home are they willing to offer you finance or a lending hand?
I agree 10000%. Where I live, renting is frowned upon, but housing is EXPENSIVE. I have a close friend who has purchased his own home, after mortgage payments, he barely has money to survive and depends soley on overtime (which isn't guaranteed)... Meanwhile I am renting, and because of videos like this I am able to set aside money for an emergency acct, future savings for my kids, an account saving money with which I will use for investments. I REFUSE to fall into that mortgage trap
Well said my Man 😅
I feel you but rent is only going up where as your mortgage is locked in for good
You could have a mortgage on an investment property instead - interest only. Pocket the difference in rent and remortgage at the end of every term - reinvesting the gains (but bearing in mind that capital gains are taxed when you liquidate). Watching these TH-cam videos is teaching me a lot.
@@Itsdjsigi I own my own home and mortgage is not 'locked in for good'. Property taxes and homeowners insurance go up every year and this makes your mortgage payment go up also. A friend of mine, who owns her home had another $400.00 tacked on to her mortgage payment each month because of this. You never know and can be hit with this at the end of each year unfortunately.
@@sandysimmer1279 My co worker told me this happened to her recently as well, thank you for the info.. I wasn’t as informed when I posted that comment.
I bought my 750sqft home for $24k cash. Good neighborhood, decent shape, taxes are only $90/mo. Closest rental in my area comparable to my house is $900. I think I made the right call buying lol
I did the same thing. The neighborhood gentrified and the same tract house on my street is selling for $150,000. I bought in 2008.
congrats on your investment, that is small....wow. I own a 1000sqft home. Its me and my two cats. I feel closeted and looking to get a bigger home. I too am in a wonderful neighborhood, middle class educated folks who are pharmacist, teachers and nurses. Near by great downtown shopping and restaurant area.
Where & what state did u buy a home for $24K ?
@@creativethink5448
Warren ,Ohio
@@creativethink5448 Beloit, WI. The owner of ABC Supply Diane Hendricks is revamping the town. I bought my house 2 years ago
Ever watch The Money Pit? That was us. Bought a waterfront property that turned into a nightmare on every level. We sold it six years ago, and the new owners also sold it. Been renting since, and now my money is in the bank instead of a contractor's pocket.
I know of someone who bought a house, invested time and money renovating it, and diligently paid the mortgage for 26 years. Sadly, illness struck, leading to the loss of their home. The devastating blow sent the homeowner into a deep depression, and within a year, they passed away. It's a heartbreaking reality that often goes unspoken; we're accustomed to hearing about "forever homes," but life's twists can sometimes shatter those dreams.
If they had rented their whole life what would have been different? The problem appeared to have been a devastating illness and the financial catastrophe that followed. Losing the house was terrible but maybe the equity kept them from incurring a debt that got passed on to their children. Would they have been any less depressed if they were half a million in debt from medical bills? I don't know that for certain but after 26 yrs. they would have had considerable equity built up, if not paid off. No house is forever, we all die, what matters is how we live and if owning a home is right for you, then you should do it.
Don't forget closing cost unless you can negotiate them in, but with the way the market is right now that will be hard. On 400k closing will be over 10k could be different but from what I have seen im thinking closer to 15k+. So you can add that now your looking at 90,000+ to move in.
He makes it easy to understand..
Importance of paying off your home early. Payed my home off in 3 years. Now I have a newer home and no mortgage. Yes I could have put all that money into investments but I secured my place of living outside of utilities and taxes. And if so thing goes really wrong I can work a minimum job to keep a roof over my head
Best answer yet. I’m so tired of people saying renting is better than owning.
There’s nothing wrong with renting as longest you realize eventually you could buy a home. However some people are better off renting would you rather go back to the fiasco of 2008 or rather have people be responsible and buy homes with time.
@@eliot5220 renting is better if you plan on staying in the place for less than a year. It doesn't make sense to buy a home if you plan to move out in 8 months.
However, my opinion is different if you plan to stay longer than a year. The issue is at that point is everyone don't qualify for a mortgage and this is why we have a renters market.
My plan exactly
just wait until biden raises taxes on capital gains...
One thing you forgot Jaspreet and that is, for most people, a house deposit will be most of their wealth. Then they use it to buy one house in one neighbourhood.
They are concentrating their wealth, there is no diversification.
They tie their financial future to the success of the housing market in their area.
If they rent they can invest in a variety of assets.
Investment property is better than owning your own property for yourself. The best thing to do is buy an investment property in an area where development is barely beginning so that in 10 years it is a solid investment property that yields a lot.
Should also include closing costs of buying and selling, as these are thousands of dollars and make short term ownership highly impractical. Realtor fees are about 5% of home value.
Me saving this video to send to family and friends who try to pressure me into buying a home when I’m not ready 😆
Please don't buy unless you're ready. I don't think family would enjoy helping you pay for a leaky roof or plumbing. Just because they think what's best for you. It can put you in deep debt.
Don't let anyone scare you into buying a house. If they really think you should build equity than just put your money in a bank. It's a much cheaper savings account.
@@traceycolvin0504 ... I agree. I asked asked them the same question and they made it seem like maintaining a house is not that expensive. It’s hard, but I won’t succumb to the the pressure though.
@@jordanroberts7931 ......Yea, I’m really not ready. I recently started investing and I’ve made some profits during that time. I think I’ll stick with that for now until I’m ready to buy a house.
@@MsKerry-lp1ue Do any of your family or friends own a house? Ask them how much are their expenses each month. Not only are you paying for property tax, there's heating which can cause an arm and a leg during the winter months. Lord forbid if the furnace happens to go out. Water bill can be high and don't forget about maintenance and up keep of curb appeal. Just to name a few of the things I had to maintain in keeping my home up.
Ahhhh thank you for the wake up call! I was staunchly a renter then felt the allure of home ownership and started looking again but you’ve reminded me that I need to run the numbers instead of just listening to heuristics
I'd rather own a home off in the country somewhere so i don't have to deal with the power of landlords and the annoyance of neighbors telling me what to do
amen
And it’s cheaper than living in the city
Besides you can grow a garden and keep chicks🤗
Dean Gerber in the majority of townships growing chicks is banned. Forget about it. Garden, maybe, if it is not a gated community.
@@sergiyprykhodko6222 That's why he said "off in the country"-- less zoning hassle. Of course you can look into the laws and pick a work-around even in more urban areas. My (urban) county puts a numerical limit on hens and forbids roosters. A male duck is a "drake," so apparently they forgot to regulate waterfowl. Unfortunately it is the ducks that are loud rather than drakes, but you need ducks for eggs (& both for duckings & therefore meat), so this is still better if you live at some distance from your neighbors. In the right climate or with the right shelters, muscovies (wart ducks) are much quieter than domesticated mallards (all other domestic breeds) though they're more of a meat than egg breed. Aquaponics probably won't be regulated either (no noise, except for the plumbing). Rabbits and guinea pigs are essentially silent, but sometimes the cuteness leads to animal welfare rules that consider them pets rather than livestock. Anyway, look at the laws and see what you can do. Sadly property taxes are so high in many areas that the savings value you get by growing your own food probably won't match the money you give to the government. In America, food isn't a top 3 expense. In an urban area, the economic thing to do is rent out floors you don't use, though I am not personally sure I am on board with the hassles of being a landlord, and the homesteading thing is definitely a more enjoyable hobby IMHO.
You, my friend, are the best financial TH-camr! This is an excellent video. People are told so many lies and they don’t realize it
If you decide to rent don't waste the money you save
(instead of buying a deposit) Invest it 🚀🚀
I disagree I own rental properties but rent where I live because in my profession I want to be flexible to move whenever I need to for a job opportunity, and it free my time up so I dont have to deal with maintenance.
@@tidey4 that makes no sense. You already do maintenance on your rentals, correct? ? Your home you pay down on your principle. If you bought right , and right location it will be easy to sell and move.
Banks are sneaky , front loading as you call it!!!
@@recyclespinning9839 Yes I do, but the rentals pay for themselves with left over cash flow. I'll eventually buy a house but at this point in my career I need to be flexible to new opportunities.
All I'm saying is that buying a house is not a correct solution for everyone. Also there's no cookie cutter solution,everyone needs individualized answers.
@@tidey4 thats why you should buy and HODL Cryptocurrencies.
It will surpass gold’s market cap!
Thank you to all of you that has served our great nation and thank you to those that have helped make us money. Thank you Jaspreet.
Owning always prevails over renting, the only exception is if you can’t afford home ownership, otherwise your just giving 2500/month away to someone who took advantage of homeownership I.e. landlord....There’s an end to a mortgage or ways to create equity or leverage by renting out your home...there’s no end to renting.........................!
That's ridiculous. There are major unrecoverable costs of ownership like mortgage interest, higher insurance and property taxes, and the opportunity cost of home equity v stocks/bonds. I'm not saying no one should own, but renting is also perfectly viable.
you did not watch the video did you?
Im single and rent from my friend. He owns the house outright he worked hard to pay it off. But I get low rent and I save the extra money and buy guacamole and ETFs.
Lol, guacamole
@Susan Ananda I have a strategic guacamole reserve of course and I cannot discuss those numbers because it's strategic. 😂👍😁
Can't beat good guac🤙🏼
The intrinsic value of your kids having a place they can call home....priceless...
I second this. Not having to worry about having pets, growing a family, having guests come over is priceless. Humanity cannot be quantified. I have no problem renting while I am young but I dont' want to rent when I plan on settling down. There are always ways to rent out this home and move.
Well, actually, it has a price and you decided to pay it apparently. For some people, it's simply not affordable unfortunately.
@@emptystuff1593 affordability is a different topic. I'm talking about being able to afford a house but deciding to rent instead
Also, a house is much bigger than an apartment.
That's fair, I'd say plan accordingly. The myth is, a home is an investment, which is false. If you're young, invest your cash and buy when you have a family
Brilliant and honest wisdom, am left speechless but to accept that knowledge is wealth, I thank you.
I understand what you say...But, all your info, is base on me living in the USA. The world is a big place.. show us about opportunity (AROUND THE WORLD) for older people (40yrs and up) what to do, show us, were to look online for that information.
When I bought my 1st home in 2005, I underestimated the cost of non mortgage items, and the one thing that jumped out at me is maintenance, this is a very overlooked cost of ownership when going from renting to buying.
And taxes!
@@LindaN83
I meant non mortgage related expenses....taxes are taken up in escrow and built into the mortgage.
@@enigmathegrayman2953 Just because they're excrowed in, doesn't mean they don't rise.
@@enigmathegrayman2953 yes but taxes vary. My friend was not prepared when her taxes went up.
@@LindaN83
Never said it didn’t rise.
thank you so much i’ve been stressed becuz my rent shot up $100 and wanted home fir my sons so bad but i’ll just eat the cost and wait. thank you!
I think the attraction in owning is that you are fairly sure that as long as you meet repayments you won't need to move perhaps every few years as Renters sometimes do.
This is particularly important where kids are in Schools they feel good in, have friends in the neighborhood etc..
Home ownership, especially after the Mortgage is paid off, also gives a person a sense of stability ....something that is missing in almost all other aspects of life these days.
This is why I used the VA home loan 0 down. There is no PMI. I bought a condo over a home because all utilities were included in the HOA fees. Its cheaper to own a 3 bedroom than rent a 1 bedroom.
You missed the most important point. If you're paying a mortgage then you should have a paid off house to live in when you retire. If you're renting then you'll still have to pay all the way through retirement...
You pay property tax foreverrrr.
300 vs. 2500+
@@davidaaron28 assuming taxes don't raise significantly over time. But you would still own the house
The argument is that when you rent you invested your down payment ($80k in this example) so when the renter retires they'll have $1,586,991.95 of investments ($80k invested for 30 years assuming a 10% return). Personally I think I could live off that no problem in retirement.
Agreed. If you rent, you’ll pay rent forever.
If you own it, eventually you’ll freakin stop making payments and get to enjoy that extra cash for something else.
Also, you have to look at it like this...
If you rent: You paid out $400k and walk away from that house with empty pockets.
If you own: sure you paid 400k but you can sell that dump and get your 400k BACK when you walk away from the house, essentially, living for FREE that entire time. 🤷🏻♂️
This channel is the most informative source I've found on the entire internet. Hell, it's more informative than any college courses I've taken.
One thing you didn’t mentioned was that every year the rent payment goes up and the 30 year mortgage payment stays the same . So the goal is if you’re going to rent to only rent for 2 or 3 years the most, not for 10 or 20 years . after 2 or 3 years it’s more convenient to get a mortgage.
Your property taxes are subject to increase every year as well. The local school district, community college district, university system as well as you municipal, county and state agencies may propose a mil increase on property taxes. Those jokers take turns raising taxes. Im still a home owner and would not suggest not owning a home or property to anyone unless they were under 25.
Thank you mister. You are one of the few influencers here that made me decide that renting is better for now. Maybe when my financials are really good and allow me to afford a better down payment then I’ll buy a home. Another tip is having two incomes from a spouse or partner is way better than one. I will look into investing and making good ROI over paying so much money for a home.
My mom sold her home after 50 years for $285k. Now purchased retirement home for $72k. Put $100k in bank and $50k in stock market. She has no money worries and watches TV all day. Next door neighbor pays $1,000 month rent and has to work p/ t at nursing home. Who is better off ?
Your mom?
They're women, they're both miserable
What if the guy spent the last 50 years investing 500 bucks every month since he didn't have to pay for repairs, property tax and home insurance? He'd be worth 2 million.
The point is for your "Average US Citizen " buying a house and paying it off in 30 years is good for raising a family and then an investment. Plus, your chance of success is extremely high.
I am seeing some discrepancies here? Where did the rest money($63000) go?
To be in your mom’s position, people need to have $285000 home to begin with. Not everyone has it, especially those who are relatively new immigrants.
I postponed buying home until I'll have at least 10 cash flowing units, my preferences are duplexes/4-plexes. Besides my day job, side business and managing rentals, I don't have much time left, so renting works perfect for me. Saves tons of time and money.
Here is a smart advice - when I'll be buying house in about 2-3 years, the best way will be buying fixer upper (say for $300k), add value and fix it up for $40-50k and get new appraisal for $400k. Boom, you became richer on $50k, and you did complete remodel for your custom needs - kitchen, bathrooms, flooring that you want etc.. By the way, you can add rehab costs to your mortgage, I think its called 203(k), dont remember exactly. Also, Home Depot has super convenient Pro options, so you can buy materials with 60-day interest free, or take a loan with low interest rate and pay it later. Millions of options BESIDES traditional buying overpriced houses with realtor
Your landlord (if they're smart) pays all the expenses associated with owning the home and still turns a monthly profit. Therefore buying is obviously cheaper, but it's not always practical/possible.
Fullerton, Ca, in the 7.7 years we've rented, we have given Jacob Landlord about $140k. So, even though the cost of buying a home is extremely costly, we don't want to be renting for the rest of our lives. We didn't buy a dream home, but bought a fixer upper that has a unit to rent out. Our plan is long term about 14 years.
The problem is that when the investment is your primary home if house price increase the overall cost of all other houses in the market will also have increased so u also end up purchasing an inflated property. So zero sun game really.. Ofcourse it makes sense if u move from higher cost area to lower cost
Fantastic presentation and wonderfully presented!
You are very wise , I learn so much from this channel . Thank you 🙏
Thanks for commenting, I will refer you to my trade analyst and accountant to make good income, go more on digital assets..
His what@app
+ 1 8 1 8 6 9 7 1 5 5 4..
This is very specific to USA, if you own a property in Portugal where i live, you dont pay 340 euros/month in property tax, a 400k euros house pays around 700 euros/year and building here is done to last, i live in the same house for 20 years and we only replace home appliances, and some new paint time to time..
The math is wrong the mortgage would around 1600 dollars a month for a 3% 30 year on a 400k house. And get real property taxes on a 400k house are more like 600 plus a month. And mortage insurance another 100 plus homeowners another 150 a month. That's equals 2450.
just stick to the basic principles, do not worry about calculations. deduct the down payment from principal.
Im trying to look at houses in that range (400K) in this state, the monthly mortgage is double of what was mentioned. 🤔
Love ya Jaspreet! But I totally disagree of factoring in the 'opportunity cost' to the "Buy" side of the comparison. The long-term opportunity in buying the house to live in is EQUITY, which someone NEVER has renting. In addition, rents and property taxes trend UP, as well as the desire of the landlord on a rental to increase his/her profit, so over time your rental expense likely increase much more than property tax and maintenance costs on a home. A final point is that you can pay off the house early, while you can NEVER finish paying rent. Thus, over time your costs can drop dramatically, even allowing for property taxes and repairs. Food for thought; your mileage may vary. Keep up the great work!
Opportunity cost is huge and we tend to miss it for most of the time.
No mames
Aren’t you unemployed?
@@edwardlopez9061 Ach! Right in the logic! :)
What? Sounds like some random bot talk
Your videos are the best i have come across. Depending on where you are in the world, whats your take no buying a piece of land and build your own house.
One thing missing is that housing insecurity isn’t mentioned when you rent ! I’m turning 50 and just bought my first home so I have rented my whole life so far and have been subject to landlords rising rent, sometimes significantly, and landlords selling the property so having to move with a few months notice ( 2 months notice one time) . Buying is security
Also I used my VA home loan ... no money down and was still cheaper than my last apartment!
@@bigchills7194 Don't mean to be a pessimist. But no money down isn't a good thing. It just means you have no skin in the game and a higher probability of defaulting in the future. You can pay down your home, but the cost of property taxes only rise and will get you.
@@bigchills7194 No money down means you got shafted buddy. Sorry to break the news to you.
@@LindaN83 Property taxes increase for landlords too. The tenants then pay via rent increases.
@@LindaN83 but for a veteran, they have preferential status on job apps so they are more likely to have a steady job. I think @bigchills71 did great.
This was extremely useful and educational. Thank you. Liked and subscribed
Thanks. This clearly explained. Neither works , so settled for van life.
Thanks, Do you experience difficulty in trading...Inbox + 1 (4 0 9) 2 0 6_1 3 4 6
I've been a landlord for a 4plex apartment. I've owned 3 homes, including an acreage.
I sold and started renting. I love renting... Freedom, less stressful and it allows me to pursue job opportunities and live in different places.
I have a huge income. No dependents and no heir. 😊
To Summarize...
Rent where you live,
rent out what you own
Spot on video and if you like changing out vanities, cabinets, flooring, etc., as trends change you will need approximately $800 per month for repairs and remodels as trends change.
The best way to learn the real estate market is by starting with your own house - that way you go through the whole process of mortgage, downpayments, repairing issues. This is why I prefered buying my house instead of renting. But like you said, it depends on the time horizon!
Don't wait too long to buy...the older you get, the less tolerance you'll have for the challenges of owning.
@@Nuvision19 I totally agree with you! And when you're done with the mortgage, you can buy a new house and use the old as a passive income source. At least this is my plan.
I used the VA home loan. No money down and no PMI. I live in Iowa my house is 190k at 2.25% interest. When accounting for the principle, loan and property taxes I pay 1,060 a month
the house I bought has a second kitchen on the second floor, very easy to rent out the second floor while I live in the first floor.
My neighbor are annoying
As long as its legal, go for it.
Some things to counter point...for home owners learn to do your own repairs (TH-cam and hard work saves thousands) and homeowners warranty. Spend $400-$600 a year and have piece of mind that if anything breaks like a washer, hvac etc, it's covered.
I had a colleague who bought a small townhouse in downtown San Francisco in the 1970s. He is glad he didn't rent a place back then.
Brilliant!! Thank you for your thorough explanation!!!!
Is very simple..either you pay your own mortgage or you pay somebody else mortgage
Actually some houses are owned free and clear so you wouldn't be paying someone elses mortgage.
@@johnjacob688 mostly likely those houses paid in full are for long time home owners.. I'm saying for first time home buyers...take it from somebody has being paying a mortagage for more than 10 years
Yeah try leaving your rented apartment to your kids
Your simple outlook does not consider the math.
@@moneybags179 most family member think you owe them something thats why I neve rent to any of my family members
Good topic!! Many American towns have few jobs with salary w/ 40k per year.. The math never works! Americans get marketed $250k homes by news, etc.. Thanks
You forgot home insurance
That's probably assumed in the mortgage with escrow. To be fair, your mortgage on a $400k property will never be $1,300 lol. Maybe $1700 at the cheapest.
@@jordanroberts7931remember he paid $80,000 down.
Agree missing HAO and insurance
@ sure in this scenario. But the vast majority of people just get into FHA loans at 3% down so this scenario is even worse for them with PMI. The most expensive "savings account" in the world.
It’s common sense he figured we all know
Good video, Jaspreet! Thanks for posting. A few things to consider. When buying a home the mortgage devalues over time due to inflation but rents go up. So for a 30 year mortgage that 1300 will stay 1300 over 30 years but the rent could increase to over 4K, 5k within that timeline.
Mortgage will also decrease to zero once it is paid off. And that’s huge for retirement. Social security and 401(k) distributions can only go so far to pay for living expenses once you retire. Would be good to live in a paid off home and only need to pay property taxes, homeowners insurance and maintenance.
This right here 👏🏾 ☝🏾
In 30 years your rent will be up to $3500 a month and your mortgage $0
Just buy land they aint making it anymore.
Real talk.
you forgot about Taxes
Your property taxes will be $3500 by then. The Great American Ripoff.
@@thetalkingboard Canadian my land taxes are next to nothing
I started looking to buy a home because I thought it would guard against skyrocketing rent prices, but now I'm seeing rents tick down slightly from the peak in the summer, plus I just don't have the bandwith to make a downpayment without being broke.
Well as a tenant you’re free from most liability that comes with owning a home
definitely especially now a days where tenants have more rights than the land owners do and in areas like mine even squatters have more rights than the land owner...
Yes renting is the most convenient. Just plan to rent during retirement and you would be okay. Just remember, the older you get the more conveniences you need/want. If a landlord provides it to you, be prepared to pay a premium
Love the insights. I was considering buying a condo for my kids to rent, but it would stretch me too much and with the lost opportunity costs, etc., I’ve stepped back from that plan.
It’s crazy, I have a rental property that I just paid off last year and now I get $950 a month in passive income. After the virus is done with I will be looking for my 2nd rental property!!!!
Wow that’s cool af how old are u btw 💯💯💯
@@Tonymontana_420 42
Frank The Tank Im following ur footsteps 🙏
No property tax in the UK. Me and my partner both pay £175 a month each for our mortgage. 10% down and the same property would be 5-600 to rent. This does not apply to everyone's situation. I actually lower my monthly expenses through home ownership
Simple solution.......
You RENT a $400k house
You BUY a $250k house
😊
Smart
That's flipped. People rent the house they need today, but they buy the house they want in the future. In general, people buy more house than they would otherwise rent.
Good luck finding a 250k home in California.
@Susan Ananda I forgot the question mark lol.
Buy 250k house
Rent out two floors
Sleep in one
Home owners insurance as well, so he starts at just a straight mortgage payment. Also you dont have to put 20% down, PMI comes off after you have 20% equity in the home. Also when you build up the equity, pull it out to invest. Renting somewhere and buying a rental property, you will have to put 20% down and the taxes are higher on an investment home. Unless you get the home with a residential loan. Plus when you have the rental you bought you will be paying all those repairs you just mentioned your landlord is covering because you are the landlord. If you do make profit from your rental you will pay tax on that, your renters will be accepting a renters credit for sure so its a bit hard to hide. Both are good ideas, you must be disciplined.
Buy home to rent all the rooms 😂
Exactly, each room $750 /4bd home = $3k Lol
I have a co-worker who just bought a house and rent out all the room
My aunt bought a 4 bedroom home and rent out 3 up stair room for $800
@@RickiHockersmith83 yeap, here in FL , easy you find tenant for $800 per room , just lit more headache to deal..
@@LuMusk I once rented a room from a lady that had a bf staying with her that was on drugs. He broke into my room and stole my TV, Playstation, and Laptop. It was the first and last time I rented a room from anyone.
Great vids, very informative!!! Thank you for wonderful content!!!
Too good and valuable information
Rent will increase though to factor in appreciation....That 2500 would likely be 2700 after a year or 2 (depending on lease terms) while your mortgage will never increase (assuming fixed rate; taxes likely go up, but overall fairly stable)
THANK YOU FOR THIS
Yeah he stay dropping jewels.
It also depends on where you live. 2008 screwed up even the people who didn't lose their homes.While NYC and California homes may have doubled or tripled in 20 years, many people are barely back to pre-crash values. I live in a suburb of Chicago and while some higher end suburbs and homes in the city itself recovered quickly, even nice homes like mine did not. I bought my home in 2002. It did not get back to what I paid for it until 2015. It just barely got back to its 2008 value recently and that is because of this weird COVID price hike. Contrast that to my first home I bought in 1996, sold for 26% more in 2002 and sold for less than the 1996 price in 2014. Given the interest, taxes, new appliances, landscaping, etc., I have lost money on the house at this point. Yes I have the equity now when I sell but a lot of people don't spend 10-20 years in the same house.
Looking forward to this one.👍
🙏🙏
Given the revised standard decution and mortgage interest cap most homeowners are not able to get the benefit of mortgage interest deduction. Property taxes are also capped to 10K/year
In these uncertain times...... Keep things simple.
Thanks for commenting, I will refer you to my trade analyst and accountant to make good income, go more on digital assets..
His what@app
+ 1 8 1 8 6 9 7 1 5 5 4..
I don't know if it applies in US but in Canada you also have to pay income tax on rental income. So $2500 rental income is more like $2200-$2300 after deductions.
This dude is God 🙏 sent! Easily Top 5 value added content channels on TH-cam!
Good work brother as always
Just because renters don't pay property tax directly doesn't mean they don't pay it. Renters pay the property tax bill indirectly through their rent. The landlord always passes the cost of the property tax bill onto the renter, they just include it in the rent like water usage and garbage pick up bills.
he did say that property taxes are included in the rent... this is beneficial to people that cant afford these expenses on their own which makes renting attractive especially in multi family homes as the expenses of the property are split up among multiple tenants.
That is why we do all our own work on our house. We replaced a third of our roof with metal for $2000 and that section should never have to be replaced again. We installed a swamp cooler for $500. We spent $500 repairing our eaves and installing gutters. We spent $70 on a plumber. Those are all the things that we have had to do and pay for in 7 and 1/2 years of living in our house.
I wish home prices in my area were 400k. They were that in 2004 or so.
Come to Boise idaho buddy.
another way to look at it your house would have to gain approximately $245,880 in value over 30 years to offset the property tax and repairs estimates not taking into account your prediction of 25 years needing a new roof for said house or garage which if skipped out on would also cut into the property gains of your home
Well if you feel broke or you wanna get richer, look at the chart for Apple,Amazon, Tesla, Etsy
,McDonalds. Then look at the chart for gold and silver . Then ask your self what you would rather invest
your hard earned money in . Also look at the charts for these stocks during the 2008 financial crises and
the global pandemic of 2020 . Did gold live up to its promise as safe-haven ?. Gold and silver crashed
together with stocks . so if you want to start building wealth with your hard earned money , which asset
is better ? The charts speaks the truth louder than the hot air coming out from the mouths of gold and
silver bags I rather invest In bitcoins , make more than enough of my capital rather than to continue to
recycle in gold and silver that always promises to be a long term investment year in year out.
The 2020 stock market has been weird and proven difficult to invest
Despite all the economic crisis this is the right time to start up an investment
Nice words
You're right investing is the key
It can be said a little simpler.if you want to be rich then focus on saving and investing.if you want to be
poor focus on spending.
1. the mortgage includes property tax. 2. FHA requires 3-5% down (at a higher cost of points or interest, which can be refinanced when you hit the 20% equity. investment properties are 20%.)
16:34 As Macklemore would say “I have cash in the bank and gas in my tank”
Our property and MUD taxes are 3.2%. That’s 1,200 per month for me in Texas.
My dream home was the cheapest home in a safe area that I could pay off in a few years.
Ah, I got pretty close to that. I paid a little too much because when I was buying inventory was low, so I had to settle for a 3BR instead of a 2BR.
Patience is important if you're chasing the dream. I wish I had extended my apartment rental for another few months for my house hunt instead of buying early. Or if you can't be patient, at least stop browsing Zillow once you've decided to buy so you don't see the houses you could have bought.
@@ordinaryhuman5645 That browsing needed to be stopped 😅
Finally someone with common sense!
Your 10-year plan is a big one. Most people when buying their first house are like: “this is a good starter house…. For 3-5 years….. If I own a house I can sell it for more money to buy a newer one when I know I can afford a house”. So, the house does not have to be perfect now…. Maintenance, Upkeep, Taxes, Purchasing fees, Realtor fees. These are perfect examples make sure when you are looking for a house you are planning to stay there awhile, value does not grow overnight.
Where i live the price of mortgage+taxes+insurance would be higher than renting.
Where is that?
Wow, this was actually more valuable for me to sit through than sitting through a Ramsey Show video. Lol. Sometimes he doesn't make his reasoning very clear. You both have the same idea, ie, don't buy a house when you don't know where you want to settle down, but I like that you broke things down. Thank you for your insight.