I’m in Ohio and the housing market here over the last 7-8 years is unlike anything I’ve ever seen. Homes that were bought for $130K in 2015 are now being sold for $590k. I’m talking about tiny, disgusting, poorly built 950 square foot shit boxes in quite mediocre neighborhoods. Then you’ve got Better, average sized homes in nicer neighborhoods that were $300K+ 10 years ago selling for $750k+ now. Wild times.
A recession as bad it can be, provides good buying opportunities in the markets if you’re careful and it can also create volatility giving great short time buy and sell opportunities too. This is not financial advise but get buying, cash isn’t king at all in this time!
I agree, having a brokerage advisor for investing is genius! Amidst the financial crisis in 2008, I was really having investing nightmare prior touching base with a advisor. In a nutshell, i've accrued over $2m with the help of my advisor from an initial $350k investment.
The decision on when to pick an Adviser is a very personal one. I take guidance from “Gertrude Margaret Quinto” to meet my growth goals and avoid mistakes, she's well-qualified and her page can be easily found on the net.
I live in a rent-controlled apartment and have been here for 12+ years. The rent can only legally increase by 3% per year. If I want to buy a similar home today, my mortgage payment would TRIPLE what I pay in rent. I'm staying put and I'm investing the difference into a managed index fund. That money grows faster than my rent grows in net money. For people like myself, buying a home is dumb. Especially with European laws requiring lots of renewable... things... that are insanely expensive. I was selected to be 1st choice for a new home a while ago, a good upgrade (size and luxury and location), but the total costs per month would go from $1400 to $3600. That makes no financial sense, to me. If I'm ever going to buy, it'll be in cash. In Spain. On the coast. When I retire. At age 55. Statistically, I'm way ahead of that curve.
Home ownership just made sense for my circumstances. I was able to buy a home for cheaper than rent AND I wanted to not have a rent/mortgage payment when I retire as that is our most expensive monthly expense. We just wanted to have less expenses when we will most likely have less income.
For myself my rent is 3k. A similar home would be 6.5k to own it. That includes HOA for $350 and $300 for mello roos. Literally saving twice as much. It takes nearly 15 years to pay more towards principle than interest and typically having 20% for a down payment is off the table for a lot of people so now theyre also paying PMI.
Me personally I put the max into my 401k match. I have bills. I put the max 15% of paychecks into my employee stock purchase plan with a look back period that includes purchasing 15% less than its lowest price. Credit card game is maximized with paying no interest. Would all this be possible paying twice as much for a mortgage paying primarily interest for the 1st 5 years? There's a lot of variables in everyone's location and situation. Is home ownership ideal yes. If the numbers make sense. Dont aim to buy at the low. You'll never buy. Aim to buy what you can afford.
Timing is critical. Buying is normally cheaper in the long run. But these are unusual times. Someone buying in my neighborhood today would have to pay 60% more per month than a renter. Luckily I bought a few years ago so am paying about the same as the renter if you add the maintenance costs. So I’m building equity while the renters come and go.
Always choose to buy my home. Had lots of friends kicked out of their rentals with a few months notice so the owners can sell up. Also where I live (UK)after the down payment my monthly payments for a 3 bed detached is £458 per month. Smaller house on the same street are £850 per month for renters. I’m putting £1000 in to SnP500 this way
I rented from 19 yrs old until 44 yrs old. But I saved $83k cash during that time and paid off student loans in my late 30's. I put a 68% down payment with that $83k and paid off my house in 3 years. Granted I always remained single. I would've bought a house earlier had I got married. In other words, okay to rent, just save money during that time.
@@zaalb131 - Yes, even better! Thanks! I'm saving over 30K a year cash in the bank in CD's. I know we're supposed to invest that, but since I'm a decade or less from retiring, I prefer to stock up a cash bucket. Up to $130K right now on top of my 401k.
My son who has lots of exp. in finance and a MSF says: Homes are not investments....they are liabilities. Yea, I got the mortgage, says the new home owner...No the Bank got the Mortgage, you get the obligation to pay the mortgage. Mortgage is an asset. Home purchases are a risk...it might work they might not. The realestate agent and bank want you to purchase. Dont buy unless you have saved a substantial down payment.
I think this becomes more a cost difference analysis. Like if cost of mortgage is gonna be 150% the cost of rent but rent in your area os going up about 5% a year then by year 8 your paying about the same and you have equity in a house by that point. Ive had my house 11 years and its a 4 bed 2.5 bath 2400 sq ft. I could hardly afford a 2 bedroom apartment in my area because everyone i talk to with an appartmenta pays about 300$ more then my mortgage which now has 12 years left on it
I have rental property. One of my homes is 2000 sq ft, 3 br and 3 bathrooms, 1 mile from the downtown area. Rent $2500/month But if someone were buying this home, the sales price would be $500k, $100k to avoid PMI, $2400 in taxes and $125/hoi. Monthly payment would be $2600, $325 for escrow. So payment would be $2925 plus the $100k investment and would have to cover repairs. So I’d say even though rent seems high right now, it’s cheaper than owning. But does depend on location and long term plans as Beau said.
Yeah, same here. It’s been interesting watching the home value rise 40% and not being able to raise rent that whole time due to rental market conditions
I've had homes and condos and never lost money on either one of them both for the long term The advantage within association I find all outside Lawn care trees flowers plants grass watering snow removal and so on is Maintained. Where the cost is based off a percentage. When you need a new roof on a house that 30000 is all on you .
I rent one of my parent's properties. I don't think I'll be a homeowner, unless I live long enough to inherit from my parents. In my situation, it makes sense to rent, because my rent is less than half of what the market goes for, and it will never go up.
I have done both. Last house I sold I made $260k Moved due to work and have rented now for the last 2.5 years. I’m happy renting because I know owning a home is not always what’s it’s cracked up to be and I’m saving over $1000 a month. If I owned with rates this high it would take years to pay down, on top of the maintenance to own. The cost of insurance, and taxes have grown so bad in my area. If you add all the in renting is less than buying. I will wait another year and see how this market goes.
You both are correct. I don't see home ownership being a part of my future at all. Homes in my city start at 1.3mil. I'm saving 35% of my six-figure income, and even then... I'd need to be making ~350k/year to even hope to afford the monthly payment. Right now I'm saving 25% towards retirement, and 10% towards a down payment...if that's going to be a possibility.
I always wondered how people could afford multimillion dollar homes and how much income was needed for the mortgage. Then I discovered that the higher the price, the more likely the buyer is paying all cash. That large sum of cash is usually mostly equity from previous homes. Although it can also be business profits, or capital gain from investments as well. Their very first home was most likely a starter home costing less than $100K. That was certainly true with me.
@@DaveM-FFB Exactly. I'm thinking I might just pay need to pay in cash near retirement. Low-cost index funds are about the only opportunity to build wealth. Equity from homes has been consistent ~8%/year but I do not believe this trend will continue. Homes cannot stay this unaffordable forever.
In my case I'm a childless 48 year old single with a "die with zero" philosophy. I currently own a home with 90% equity. I'm not social security eligible but will pull a forever pension at least equivalent to social security starting at 55. I have $350K in brokerage; $250K combined retirement accounts, $500K home equity, and the pension starting in about 7 years. I hope to sell my house, invest the money in SP500, and become a renter forever. A $60-$70K lifestyle (in today's dollars) will do it for me. Is there a blindspot I'm not seeing here? My $1.1 mil (after home sale) plus $45K/yr pension (2% cola) for say 30 years. Do I have enough to fund my lifestyle in spite of inflation and rising rent until the end of my life?
I say it is better to buy a home. More than likely, interest rates will drop in the coming months/years causing inflation and housing prices to increase. If you can lock in a mortgage now and refinance later, you will be paying significantly less than in a year or two once inflation and housing prices increase. Plus you will also get a nice boost in net worth in the equity you have in your home. This is assuming you are staying in the same place for at least 5 years.
Inflation does not occur as a result of interest rates. It's the other way around. Interest rates are adjusted in response to inflation and other market considerations.
Owning a house is not only stupid expensive it is a crap amount of time. Mortgage and escrow is only part of the equation. It is the kitchen raining, the furnace and roof both needing replace at the same time. The maintenance and upkeep that is expensive. Your weekends are gone...because you have to spend them taking care of the broken thing. You want to go do XYZ on Tuesday evening...nope the kitchen sink is not draining.
While that’s true, I believe maintenance costs and the rate they occur is often over-stated. You need cash reserves if you are buying a house for sure.
That can definitely happen, but part of this whole financial mutant stuff the money guys go on about is understanding before you buy that you need to be prepared for those types of expenses. If you aren’t able to save for those things, renting is going to be better for you anyway
Leases are typically 6 to 12 months and leaving without notice would violate the lease. Not recommended unless you want to ruin your credit. (Military are exempt if there’s a military clause… be sure to ask before signing.)
I love the final answer. At the end of the day, money allows for freedom/flexibility to make these choices (such as moving closer to family or experiencing living in other places in the world.) While we should always aim to optimize our situation by following guidelines like the FOO, what you actually do when it's time to make that decision is entirely up to you. The moment having money feels like a trap is the moment where you realize you're asking the wrong questions and need to dig deeper into your why
I’ve owned a home before, I bought a house in 2005 and sold it in 2015 because I fell behind in its maintenance it would’ve cost more money than I had to get it up to speed. Now I’m a renter, although I’m not thrilled with renting I know that’s my best option as I’ll likely NEVER have the opportunity to own again.
Buying is so expensive (especially now) you got the loan, PMI, hoem insurance, HOA, save for maintenance, saving for property tax. A decent place where I live is 400k. Did the math and to be at/under 25% total housing costs (everything i listed) household income needs to be 180k...not sure how those who arent rich are gonna be able to buy... I personally really want to buy at some point for stability and customizing a home to be mine but income is the biggest issue.
"it's the American dream the to own a home" no people have been sold something, just like cars, vacation and name brand merchandise . Think for yourself people and don't be sold someone elses way to make a living
It's not that simple. Owning a home can be a good wealth builder. But I've seen people over pay for a home and buy at the top of their price range for 30 year mortgage, plus with an expensive HOA in a high tax area. It was a complete wealth killer. I was a renter from age 17 to 19. I rented two places. Both had tiny yards with lots of neighbors and shared parking. Rent was on the cheap side with both being small 2bedroom 1 bath. Nothing like I would buy. We bought a distressed property in a great area. We knew the guy and it was his home before he remarried. He turned it into a failed rental. It was on a great one acre of land with large oak trees. The price allowed us to do our own remodeling. We build a ton of sweat equity by painting, replacing floors, planting flowers in the yard, buying new appliances, replacing light fixtures, and replacing vanities. It has a mother in law suit in the back. It paid half the mortgage in the beginning and then more than half after 1 year. It was a tremendous wealth builder. I paid it off at age 24. And soon bought another rental.....
I prefer to own a home in $200k range in a safe and nice neighborhood with no nonsense wasteful fees like HOAs. Better yet paying cash for it. Do not own condos. It is a waste of money. Condos fees keep going up and potentially destroy the values of condos.
@@CH-vm6cq We own a rental home (that used to be our primary residence) in the Oklahoma City metro that’s worth about $240k. It’s in a solid middle class neighborhood with top-rated public schools. I’m pretty sure that sort of thing is possible in many cities in between the coasts
I’m in Ohio and the housing market here over the last 7-8 years is unlike anything I’ve ever seen. Homes that were bought for $130K in 2015 are now being sold for $590k. I’m talking about tiny, disgusting, poorly built 950 square foot shit boxes in quite mediocre neighborhoods. Then you’ve got Better, average sized homes in nicer neighborhoods that were $300K+ 10 years ago selling for $750k+ now. Wild times.
A recession as bad it can be, provides good buying opportunities in the markets if you’re careful and it can also create volatility giving great short time buy and sell opportunities too. This is not financial advise but get buying, cash isn’t king at all in this time!
I agree, having a brokerage advisor for investing is genius! Amidst the financial crisis in 2008, I was really having investing nightmare prior touching base with a advisor. In a nutshell, i've accrued over $2m with the help of my advisor from an initial $350k investment.
*@shirleygarland4766* That does make a lot of sense, unlike us, you seem to have the Market figured out. Who is this consultant?
The decision on when to pick an Adviser is a very personal one. I take guidance from “Gertrude Margaret Quinto” to meet my growth goals and avoid mistakes, she's well-qualified and her page can be easily found on the net.
Thank you for the lead. I searched her up, and I have sent her an email. I hope she gets back to me soon.
I live in a rent-controlled apartment and have been here for 12+ years. The rent can only legally increase by 3% per year. If I want to buy a similar home today, my mortgage payment would TRIPLE what I pay in rent. I'm staying put and I'm investing the difference into a managed index fund. That money grows faster than my rent grows in net money.
For people like myself, buying a home is dumb. Especially with European laws requiring lots of renewable... things... that are insanely expensive. I was selected to be 1st choice for a new home a while ago, a good upgrade (size and luxury and location), but the total costs per month would go from $1400 to $3600. That makes no financial sense, to me.
If I'm ever going to buy, it'll be in cash. In Spain. On the coast. When I retire. At age 55. Statistically, I'm way ahead of that curve.
Home ownership just made sense for my circumstances. I was able to buy a home for cheaper than rent AND I wanted to not have a rent/mortgage payment when I retire as that is our most expensive monthly expense. We just wanted to have less expenses when we will most likely have less income.
For myself my rent is 3k. A similar home would be 6.5k to own it. That includes HOA for $350 and $300 for mello roos. Literally saving twice as much. It takes nearly 15 years to pay more towards principle than interest and typically having 20% for a down payment is off the table for a lot of people so now theyre also paying PMI.
Me personally I put the max into my 401k match. I have bills. I put the max 15% of paychecks into my employee stock purchase plan with a look back period that includes purchasing 15% less than its lowest price. Credit card game is maximized with paying no interest. Would all this be possible paying twice as much for a mortgage paying primarily interest for the 1st 5 years? There's a lot of variables in everyone's location and situation. Is home ownership ideal yes. If the numbers make sense. Dont aim to buy at the low. You'll never buy. Aim to buy what you can afford.
Timing is critical. Buying is normally cheaper in the long run. But these are unusual times. Someone buying in my neighborhood today would have to pay 60% more per month than a renter. Luckily I bought a few years ago so am paying about the same as the renter if you add the maintenance costs. So I’m building equity while the renters come and go.
Always choose to buy my home. Had lots of friends kicked out of their rentals with a few months notice so the owners can sell up. Also where I live (UK)after the down payment my monthly payments for a 3 bed detached is £458 per month. Smaller house on the same street are £850 per month for renters.
I’m putting £1000 in to SnP500 this way
I rented from 19 yrs old until 44 yrs old. But I saved $83k cash during that time and paid off student loans in my late 30's. I put a 68% down payment with that $83k and paid off my house in 3 years. Granted I always remained single. I would've bought a house earlier had I got married. In other words, okay to rent, just save money during that time.
Sounds like you made the most of your situation! Is owning your house outright as good as most people say it is?
@@zaalb131 - Yes, even better! Thanks! I'm saving over 30K a year cash in the bank in CD's. I know we're supposed to invest that, but since I'm a decade or less from retiring, I prefer to stock up a cash bucket. Up to $130K right now on top of my 401k.
@@zaalb131 - One thing I had to do was move across the country. I was sad to move away from my family but it had to be done in my case.
Love you guys, great content. But please don’t use the door bell sound effect again. My dog went berserk 😂
My son who has lots of exp. in finance and a MSF says: Homes are not investments....they are liabilities. Yea, I got the mortgage, says the new home owner...No the Bank got the Mortgage, you get the obligation to pay the mortgage. Mortgage is an asset. Home purchases are a risk...it might work they might not. The realestate agent and bank want you to purchase. Dont buy unless you have saved a substantial down payment.
A mortgage is not an asset, it's also a risk. But homes, primary residences anyway, are not investments.
And for sure only buy a home if you can easily afford it because your insurance and taxes will go up and you will have upkeep on the house.
No one hypes me up to save quite like Brian 😅🙌
I think this becomes more a cost difference analysis. Like if cost of mortgage is gonna be 150% the cost of rent but rent in your area os going up about 5% a year then by year 8 your paying about the same and you have equity in a house by that point.
Ive had my house 11 years and its a 4 bed 2.5 bath 2400 sq ft. I could hardly afford a 2 bedroom apartment in my area because everyone i talk to with an appartmenta pays about 300$ more then my mortgage which now has 12 years left on it
I have rental property. One of my homes is 2000 sq ft, 3 br and 3 bathrooms, 1 mile from the downtown area. Rent $2500/month
But if someone were buying this home, the sales price would be $500k, $100k to avoid PMI, $2400 in taxes and $125/hoi. Monthly payment would be $2600, $325 for escrow. So payment would be $2925 plus the $100k investment and would have to cover repairs.
So I’d say even though rent seems high right now, it’s cheaper than owning.
But does depend on location and long term plans as Beau said.
Same boat. House is about $2200 for rent, but the house next door would require $85K down and a monthly payment of $2700
Yeah, same here. It’s been interesting watching the home value rise 40% and not being able to raise rent that whole time due to rental market conditions
I've had homes and condos and never lost money on either one of them both for the long term The advantage within association I find all outside Lawn care trees flowers plants grass watering snow removal and so on is Maintained.
Where the cost is based off a percentage.
When you need a new roof on a house that 30000 is all on you .
I rent one of my parent's properties. I don't think I'll be a homeowner, unless I live long enough to inherit from my parents. In my situation, it makes sense to rent, because my rent is less than half of what the market goes for, and it will never go up.
I have done both. Last house I sold I made $260k
Moved due to work and have rented now for the last 2.5 years. I’m happy renting because I know owning a home is not always what’s it’s cracked up to be and I’m saving over $1000 a month. If I owned with rates this high it would take years to pay down, on top of the maintenance to own. The cost of insurance, and taxes have grown so bad in my area. If you add all the in renting is less than buying. I will wait another year and see how this market goes.
Fact of Life--Over the long run, being an owner is always better than paying the owner's mortgage. If your life is not stable, do not buy, just rent.
You both are correct. I don't see home ownership being a part of my future at all. Homes in my city start at 1.3mil. I'm saving 35% of my six-figure income, and even then... I'd need to be making ~350k/year to even hope to afford the monthly payment.
Right now I'm saving 25% towards retirement, and 10% towards a down payment...if that's going to be a possibility.
I always wondered how people could afford multimillion dollar homes and how much income was needed for the mortgage. Then I discovered that the higher the price, the more likely the buyer is paying all cash. That large sum of cash is usually mostly equity from previous homes. Although it can also be business profits, or capital gain from investments as well. Their very first home was most likely a starter home costing less than $100K. That was certainly true with me.
@@DaveM-FFB Exactly. I'm thinking I might just pay need to pay in cash near retirement. Low-cost index funds are about the only opportunity to build wealth. Equity from homes has been consistent ~8%/year but I do not believe this trend will continue. Homes cannot stay this unaffordable forever.
In my case I'm a childless 48 year old single with a "die with zero" philosophy. I currently own a home with 90% equity. I'm not social security eligible but will pull a forever pension at least equivalent to social security starting at 55. I have $350K in brokerage; $250K combined retirement accounts, $500K home equity, and the pension starting in about 7 years. I hope to sell my house, invest the money in SP500, and become a renter forever. A $60-$70K lifestyle (in today's dollars) will do it for me. Is there a blindspot I'm not seeing here? My $1.1 mil (after home sale) plus $45K/yr pension (2% cola) for say 30 years. Do I have enough to fund my lifestyle in spite of inflation and rising rent until the end of my life?
Wow nice
Not everythig is a financial decision, it's a life decision
But this show is a financial show so the questions are specifically about financials.
Depends where u live. East coast big cities no. Small towns with cheap houses yes😊
The answer to nearly everyone of these questions is "it depends"
A house is not for everyone.
Renting is not for everyone.
Until I'm a tenured professor, I don't think it's worth my while to purchase a home. Until then, I'm content with renting.
Long term buy is better and for short term rent is better.
I say it is better to buy a home. More than likely, interest rates will drop in the coming months/years causing inflation and housing prices to increase. If you can lock in a mortgage now and refinance later, you will be paying significantly less than in a year or two once inflation and housing prices increase. Plus you will also get a nice boost in net worth in the equity you have in your home. This is assuming you are staying in the same place for at least 5 years.
7-10 years is the range more than 5 nowadays
Inflation does not occur as a result of interest rates. It's the other way around. Interest rates are adjusted in response to inflation and other market considerations.
13.5 years now to break even. @@WeBeatMedicare6969
Owning a house is not only stupid expensive it is a crap amount of time. Mortgage and escrow is only part of the equation. It is the kitchen raining, the furnace and roof both needing replace at the same time. The maintenance and upkeep that is expensive. Your weekends are gone...because you have to spend them taking care of the broken thing. You want to go do XYZ on Tuesday evening...nope the kitchen sink is not draining.
While that’s true, I believe maintenance costs and the rate they occur is often over-stated.
You need cash reserves if you are buying a house for sure.
I've been a home owner for 13 years. Not once has my house ruined my weekend or Tuesday night. What are you on about?
That can definitely happen, but part of this whole financial mutant stuff the money guys go on about is understanding before you buy that you need to be prepared for those types of expenses. If you aren’t able to save for those things, renting is going to be better for you anyway
Define the American Dream
Hot girl!! But my favorite is Brian, brain and beauty is a great combo❤
Renting is always better. If i need to split within 24 h im gone! ❤
Leases are typically 6 to 12 months and leaving without notice would violate the lease. Not recommended unless you want to ruin your credit. (Military are exempt if there’s a military clause… be sure to ask before signing.)
@@mikejohnson7225 im military ✌️
Live with parents and max tax advantaged accounts and save for 20% down
I love the final answer. At the end of the day, money allows for freedom/flexibility to make these choices (such as moving closer to family or experiencing living in other places in the world.) While we should always aim to optimize our situation by following guidelines like the FOO, what you actually do when it's time to make that decision is entirely up to you. The moment having money feels like a trap is the moment where you realize you're asking the wrong questions and need to dig deeper into your why
I’ve owned a home before, I bought a house in 2005 and sold it in 2015 because I fell behind in its maintenance it would’ve cost more money than I had to get it up to speed. Now I’m a renter, although I’m not thrilled with renting I know that’s my best option as I’ll likely NEVER have the opportunity to own again.
Buying is so expensive (especially now) you got the loan, PMI, hoem insurance, HOA, save for maintenance, saving for property tax. A decent place where I live is 400k. Did the math and to be at/under 25% total housing costs (everything i listed) household income needs to be 180k...not sure how those who arent rich are gonna be able to buy... I personally really want to buy at some point for stability and customizing a home to be mine but income is the biggest issue.
: )
"it's the American dream the to own a home" no people have been sold something, just like cars, vacation and name brand merchandise .
Think for yourself people and don't be sold someone elses way to make a living
It's not that simple. Owning a home can be a good wealth builder. But I've seen people over pay for a home and buy at the top of their price range for 30 year mortgage, plus with an expensive HOA in a high tax area. It was a complete wealth killer.
I was a renter from age 17 to 19. I rented two places. Both had tiny yards with lots of neighbors and shared parking. Rent was on the cheap side with both being small 2bedroom 1 bath. Nothing like I would buy.
We bought a distressed property in a great area. We knew the guy and it was his home before he remarried. He turned it into a failed rental. It was on a great one acre of land with large oak trees. The price allowed us to do our own remodeling. We build a ton of sweat equity by painting, replacing floors, planting flowers in the yard, buying new appliances, replacing light fixtures, and replacing vanities. It has a mother in law suit in the back. It paid half the mortgage in the beginning and then more than half after 1 year. It was a tremendous wealth builder. I paid it off at age 24. And soon bought another rental.....
Once again, I don’t plan on getting married or having children so apartment living is for me.
Apartments are crazy now. I'd need a 2 bedroom and most where I live now 1100. Basically the same as my mortgage with HOA fees
I prefer to own a home in $200k range in a safe and nice neighborhood with no nonsense wasteful fees like HOAs. Better yet paying cash for it. Do not own condos. It is a waste of money. Condos fees keep going up and potentially destroy the values of condos.
Where can you get a house for that price? You must be in the country because the average home price in the US is close to 400k now
@@CH-vm6cq We own a rental home (that used to be our primary residence) in the Oklahoma City metro that’s worth about $240k. It’s in a solid middle class neighborhood with top-rated public schools. I’m pretty sure that sort of thing is possible in many cities in between the coasts
@@CH-vm6cq that average is also wrong. Try living near major cities. I live in Seattle and average price is $1M.
“Rill” or Real estate?