It's better for me to rent and invest the difference at this point in my life. If I had a home all the extra costs would prevent me from investing as much as I do currently.
There's no doubt owning a house is a financial anchor. One thing that somehow gets missed in these videos is that say you and I have $100k. When I go out and buy a house worth $500k, then that $100k goes in down payments but someone else gives me $400k - as in $400k of real estate. If the house appreciates, then I, alone, benefit by the gain in that $400k. It's a fact that no-one is going to lend anyone $400k if there's no collateral. You are free to invest your $100k as you like. You could do well - your comment is a year old when I write this - so go back to your year younger self and buy some bitcoin at $7000 - your $100k would now be worth, a year later, $871k - ain't hindsight wonderful! Want to know what your $100k would be worth in another crypto currency dogecoin? In the last year your $100k would be worth $190million. In the mid term, when you're youngish, use the fact that you are renting to benefit from the most important aspect of renting which is mobility. Move to better jobs and better prospects. Buy once you've identified your 'forever' location. I can ask every single one of my home-owning friends and they will all say "I'm really glad I bought a house when I found I wanted to live here for 20+ years... because now that I'm older and my earning potential is diminishing, I could not possibly afford to buy the house I'm living in: neither could I afford to rent it." Because I've slogged through 20 years of overpaid mortgage payments the house is mine and I pay tax and insurance and that's about it. (FYI I made absolutely sure I didn't buy a house with an HOA - if you need any advice at all then that's it - never purchase properties controlled by HOAs). Good luck!
We did that. Rented and then bought a house. Rented out the house for 3 years. Moved into it once we could afford to. We then bought a second house. Renting it out. Going to go buy a third house today.
I was just thinking about this! I made the decision to start saving for a multi-family unit for house hacking (live in one unit, rent the others) for my first property. Great video!
Don’t do it!!! A home was the worst life mistake I ever made as a human being. They brake, they keep you broke and in constant debt, I would forever give my landlord a happy rent check, plus more for the peace of mind I enjoy. Every room becomes an abode for more and more stuff you don’t need. Constant repair and maintenance headaches. When you buy a house you become a whore to home improvement stores. Less is more, no wonder many marriages fall apart because of financial stress and strain. Don’t let traditions manipulate you from a happy life. It ain’t worth it folks, don’t finance your own mental trauma and misery.
yes people always berate us for renting for so long but I love our rental the only bad part is dealing with the landlord (but that's rarely) otherwise it leaves us with so much time to relax etc
Zar TheMad No, I brought a house when I should have stayed in an apartment. Buying a home is being a whore to a home improvement store. Renting is tops because it’s hands off. Rent goes up, tell me in life what costs money doesn’t.
I've owned two houses in the past and am currently renting. The annualized return on the first house was a paltry 2.9% and on the second was 5.1%... but that's not counting money I put in for repairs and renovations. Any investor knows that the best long-term investment is diversified in terms of market sector and geography. Owning a house is a large investment in a single sector and single geographic location... which is very risky.
Spot on. I currently have a modest house with a manageable mortgage, so I can still max out my Roth contributions. When or before I retire I will sell it, invest the proceeds, and rent. When I'm retired I prefer the simplicity of renting.
Use the 5% rule as a good baseline to find out what’s better. Take the house price and times by 5% then divide by 12. If rent prices are cheaper for the same place, might be better to rent.
one downside of owing a mortgage is you have to purchase home insurance, which is a racket with high deductibles and only really valuable if there is catastrophic damage. With interest rates so low, monthly insurance costs can be half of the mortgage payment for many.
the flip side of ownership is responsibility, and homes can be headaches as you are responsible for many more inputs and outputs that are not fun. The fun stuff of ownership are small compared to the un-fun. some landlords can suck, but renters can be discerning and find a decent landlord. It is true that the quality of rentals can suck in some places, and renters can be treated as second class citizens, and that is stupid and unfair.
Yes I want that video! I am laying in bed watching these back to back like it's a sitcom re-run. I am half asleep now but don't want to stop; your material is too good! Nevertheless, tomorrow(well, today now) is another day. Good night(good morning😆) and thank you
Excellent video, as always. It’s surprising how close the math is, as well as how much factors like how often you move and how much you pay in closing costs matters. Sadly, I think the reality is that many renters do not “invest the difference” between their rent and what they would have paid in owning a home, either due to necessity or lack of knowledge from videos like this. Renting, one could argue, also poses more risk in the form of a landlord that could decide to not renew a lease and therefore force you to move, perhaps to a lower quality or higher rent place.
It's definitely something that needs to be considered carefully before making the decision to rent or buy. I also agree that renting can pose more location stability risk which can be a major con depending on your situation (particularly for those with children... just one of the many reasons to consider home ownership even if the numbers come out in favor of renting. Like I've said not everything is about the money :)
Investing regularly is the key. If one has the options are renting and regularly making diversified investments (stocks and bonds) and owning and not having enough for other investments, renting is probably better. But as you say, people probably don't make other investments regardless of whether they rent or have a mortgage. If that's the case, having a mortgage does at least build some equity even if there are significant disadvantages to ownership.
My way is to buy a house with separate garage, live in garage, rent out the whole house, mortgage will pay for itself... win-win Also, buying a house in HOA area is like having a landlord on steroid...
Does the home meet your needs? Is it an enjoyable place to live on the whole? If so, then I'd feel pretty great that it only cost $80k! That means you can put more of your money toward other things like investing :) Thanks for the comment!
Yes I’m very happy and I do save and invest. My only debt is my 0% car loan and my house. Will all be paid in less then 10 years. I feel I got a great deal on my house as well. Love the vids keep it up!
Sounds to me like a pretty awesome situation to be in! Also sounds like you're well on your way to financial independence if you're already saving and investing and will be totally debt free within the next 10 years! Keep up the great work :)
I've owned multiple homes. I can't relate to any of the math in this story... I have an MBA in finance so I don't think I'm too bad at doing the math, and so far I'm far better off financially from having owned my own home.
We were in a 3rd scenario. We physically build our own house and paid as we went. We never carried a mortgage It was a lot of work and I would never do it again but it was totally worth it.
1. Why do you compare "house that costs $200,000" with "rent that costs $1,440"? Why don't you compare "rental of the house that worth $200,000"? Which, most likely, will be about $1,800 to $2,000... 2. Why do you add $400 for utility to a "house owning", but don't add it to a "rental"? It's really rare, if not "impossible at all" to find a "rental", where you have Internet / heating / electricity / phone / water / etc. included. Especially if you rent "a HOUSE", and not "room in the basement". PS. To make it fair comparison... Let assume that someone buys house as a "rental business property" and then compare "living in this rented house" with "buying the same house for your own living"...
However for the same or much more square footage we can get a 3 bed 2 bath house with a $1k housing cost vs the $1800 in rent for a 2 bed 2 bath. Freedom is priceless and building equity is financial peace, esp if we get a new house we would use the first home as a rental property. Dog needs a back yard, I want an office with a growing family. And with first time homeowner loan assistance we can circumvent some of those upfront costs. 💸
I wished you did the video with equivalent property instead of average. In your video your rent price was 1400, that would be roughly what rent would be in my condo area at the moment. But I purchased my property and my mortgage with HOA is about 800. Just rent vs mortgage for the same property would be a difference of 600. I know some areas it is harder to find condos. Either you purchase a house or rent an apartment. if you just take the difference of 600 per month and calculate it over the course of the 30 year loan @ 7% that comes to 485k. Owning a home has more upfront cost but over time it does have its advantages. the Rent is higher than mortgage payment, but there are much lower upfront cost noted in your video. But it can and could raise over time with inflation. If you do not rent in one location for the long term, the cost of moving from one location to another is another money factor. And at the end, this is not a cost that can decrease or go away. If the property or loan is low enough, you can pay it off early then live without a mortgage, but you will be stuck with the HOA. Lastly, the rent that you are paying is going to some one else’s mortgage. You are bring up someone else’s equity, not yours. The principle you are paying is not going away, it becomes equity to your net worth then you decide to sell the property. Renting does have its advantage in the short term,. Gives you time to find out where you really want to live. You can experience living in different locations until you find somewhere you like. With the lower up front cost it can be a platform to save money to purchase a home down the road. You do not have to worry about fixing the home/appliances, this would be addressed by the landlord.
Hung, homeownership definitely does have its advantages (financial and otherwise) depending on your situation. And, as I've said, real estate is such a hyper-local thing that the price comparison can vary widely depending on where you're looking. It sounds to me like you're in a situation where owning appears to be a favorable option from both a personal and financial perspective! Thanks for the feedback :)
Lets all just agree that both renting and buying are too expensive and that the quality of life for younger generations will be worse than their predecessors.
Venictos, I do agree that in many parts of the US both renting and owning are pretty expensive (at least in relation to typical incomes in each area)... however, I won't go so far as to say that quality of life for younger generations will be worse than their predecessors. In my opinion, it's just too early to say. I also feel that housing (while a very important part of a financial plan) is just one of the ingredients for a high quality of life. Younger generations (should they keep the rest of their financial lives in order) will have much greater flexibility when it comes to keeping those costs under control in relation to their incomes (many have taken to geographical arbitrage or remote work to enable them to live in a more cost-effective area. Others have house hacked and so on). A small misstep here is not necessarily a back breaker, so long as you're on point in other areas :)
Your analysis is pretty decent. I would have recommended including a sensitivity analysis for the major assumptions so that a range is presented. Maybe an addendum video. As someone who owned a house with 3% plus percent property tax rate and a nominal depreciation (not appreciation) of 2% over 14 years in total, the differences are quire stark to net worth.
Jeffrey, that's actually not a bad idea given how hyper-local real estate can be... kind of wish I had thought to do that in the first place. Ranges were discussed for quite a few of the assumptions in earlier videos, but perhaps an additional run through of common expectations would be appropriate for any future videos on the subject. Thanks for the suggestion!
@@NextLevelLife Thanks. Its just offers viewers something you don't really get elsewhere. Summary videos with no depth are easy to find, and that is just more than real estate - it covers basically any topic. But put together the list of major estimates, go behind each major assumption behind those estimates and provide some sensitivity to differences - and you will provide something pretty much no other channel provides
@@NextLevelLife Also - you might want to add an analysis for those individuals with high state income and property taxes in regards to the pre/post 2017 tax law changes. That has a big impact. Basically if you move from a high tax state to a low tax state, you can end being able to deduct some or all of your property taxes where now you would most likely be capped out with income taxes if you enter the top quintile of income in a high tax state
A home is not a productive asset. Therefore Buying a home (to live in) is never a financial win. Buying a productive asset (a home to rent out), and using that income to pay rent (net positive cashflow), is the best move. Therefore, Renting is ALWAYS better than buying, Assuming you do it right. If you don't do it right you're throwing money away regardless.
@@zarthemad8386 Actually I'm far from broke. At 25 I'm doing much better than most people my age. In the top 20% based on what I've seen. I was broke 4 years ago. It was terrifying. So once I got in a position to get out of it, I took steps to make sure I never fall back into that situation ever again.
Potential first time home buyer. I’m moving and thought maybe I’d buy instead of rent. There are decent homes from around $100k-$140k. And rent would be about $850/mo. I have the 20% down payment. My salary is $49k. I will only live there for 3-4 years.
Consider getting together with family. Purchasing property and buying smaller trailer homes, you can get a pretty luxurious home for a fraction the cost of a house on an eighth acre. Plus, family can pool resources for Bills and everyone saves money.
Real reason for buying a house is to take advantage of taxes. The governments will pick up about 30% of your housing cost. But with the new higher standard deduction the benefit only matters when interest and taxes exceed 12,800.
I don't believe that over 30 years the rent increase from $1700 to $4000. Is the salary also increasing following the inflation rate? Perhaps 3% appreciation is not yearly, but 3-4 years. I think it's more realistic.
Another great video. You've really been filling in your rent vs buy playlist lately. As someone who already owns a home and doesn't intend to sell any time soon, I've got to be honest I was hoping for something different this week. I of course continue to watch however, because you put out great videos and I always love expanding my knowledge on these things. Thanks for all the effort you put into your videos, keep up the great work.
Andrew, yes I've been tackling the topic quite a bit over the last several weeks. I just wanted to make sure I was thorough with such a big topic. Thanks for the feedback and continued support. I really appreciate it! Just so you know, I will be moving on to some different topics starting next week (and this will be the last rent vs buy video for quite a while).
@@NextLevelLife That makes sense. It's a big topic to cover and for those trying to decide between renting or home ownership. It's a big deal and I'm sure this series will be very helpful for them. Glad to know there's some other topics in the near future. I look forward to your upcoming videos. They're the best part of most Mondays.
I live in NYC where an average rent is $2600-$3,000. To me it doesn’t make sense to pay this kind of rent and make more sense for me to buy. I paid $200 more a month mortgage vs rent, and building equity. The issue is putting down the very high down payment but it just makes sense to buy if you live in an expense city, and if you get the down payment together. I’ve
This is a great topic 👍 Personally, owning is important to me. I live in a high cost of living area and pay a lot for home ownership. But for my lifestyle and personality (introverted homebody who loves to reno and decorate!) it's worth it to me 💕
Lissa, that is a perfect example of owning being a great move! (so long as the high cost of ownership isn't crippling your other financial goals). You may be spending a good amount of money on the home, but by the sounds of it you are getting great value for the money spent :)
Instead of aggressively paying down your mortgage, refinance to these ridiculously low int rates and invest your leftover cash in stocks. I never understood why people focus on aggressively paying down cheap debt.
You're also not comparing realistic scenarios. You're comparing buying a 2bdr house with a 1 bdrm apartment. Realistically if you're looking at living in the same area the morgage+hoa+property tax+insurance will ~= the rent. Plus the rent tracks the housing market not inflation. Also you should account for moving costs and it is likely to increase standard of living more often when renting. All in all it is much more expensive in a realistic sense
I like your videos but think ownership may have been a little under-represented. I think that moving city to city often makes it even more beneficial to purchase property. I do like your point that doing a "cheaper" option only actually helps if you are responsible enough to save/invest the difference. If you buy a home to move in, you actually only need 5% down with good credit - and in some cases you could do 3.5%, 3% or even 0% making your only additional costs the closing costs & earnest money - the latter of which you get back upon closing. If you buy even just a mediocre wedge deal then your mortgage won't actually be any higher than buying a home at its fair market value with 20% down AND you won't owe PMI. Even going in with less equity, you can have the PMI removed once you reach 20% equity by paying down your mortgage and appreciation. Using the houses in an example town of Maryville, TN - full PITI for a 3/2 you bought 15k under value (as you always should do - and this is a weak purchase in my opinion) and 10k in for that required 5% down payment, you're full PITI is about $1250, rounding up. Current rent for a similar home would be $800-$1500 in that area. Splitting the difference, that makes fair rent $1150 at the time of purchase. Now, after a year you can rent it out - but if you stay in the average 13 years that most homeowners do, then the home has almost certainly gone up by $25 a month in terms of the rent that it is worth each year. Meaning it now rents for $1475 when you move out. Assuming you manage the property yourself, that's an okay profit. If you delegate out the management, your mortgage is at least being covered by someone else with some limited vacancy. Taking into account equity paydown, tax benefits and appreciation would make this even more in favor of ownership, as would refinancing once you move out to turn the home into a rental. Although, refinancing would have some additional associated costs. You can also get the maintenance costs much better on the back end if you do the right things early on. Kind of how a new car needs a mechanic less often than a used car. Naturally, this only works if you know how to crunch these numbers and make a good deal - which requires deliberate education on the new buyer's part and work on the front end to MAKE the passive income source a reality. Most people will instead pay $200k for a house that is worth $200k and in many cases later regret it because it is costing them money.... or rather, not making them anything - which is why the advice in this video and Dave Ramsey's are applicable to most people. TL;DR - It's better to rent and make me money as your landlord if you don't spend the time to educate yourself on real estate - but if you are willing to learn, then you can beat these example numbers. Both mine and Next Level Life's.
Relentless Growth, that is true! If you engage is house hacking through the renting of your owned property the numbers can flip very quickly! Although, renting with roommates (rent hacking) can have similar effects. However, that doesn't discount your other points (particularly those about the maintenance costs which are incredibly valid and underrated in my opinion!) Again this is why its important to be honest with yourself, look at your own situation carefully and decide which path is best for you, both financially and otherwise. Since the numbers used in the video were rough averages it is very, very possible to do better in either decision (possibly even significantly better). Thanks for the comment :)
@@NextLevelLife The feeling is very mutual! I'm super pro real estate so whenever I comment in disagreement to a more experienced creator, I feel like I'm poking a bee hive XD
I can understand the feeling! I'm perfectly happy when viewers share differing views to my own (so long as they're being respectful about it as you were). After all, how else am I going to learn?
@J F lol its not some exclusive area or anything, its just where I live / where the work is. All the major cities are like this in my country. Very expensive. If you leave, you end up in some tiny town and no job, so....
Yeah but interest rates are at historic lows. Why not take advantage of cheap leverage as opposed to your own capital. Instead, invest your savings in a diversified stock/bond portfolio. Long term your portfolio should significantly outperform the low mortgage interest rate. That’s what the rich do...the OPM method (spend “other people’s money”) 🙂
I've rented for years, but since I'm going to be running a small home business, I'd like to buy a small(under 1,000 square feet) two bedroom house, preferably with cash. As far as time in the house, I can honestly say I don't want to ever move, so I'd be there for the next 35-40 years. Having had to move abruptly last year when my rental home was sold, I welcome the security and added costs of living in a modest, older home. Fortunately, housing prices are relatively low in my region, so I plan to find a nice, quiet place next summer.
I lost my job a month after closing on a new house. There wasn't any work in the area and I had to move. I didn't have large closing costs getting in thanks to having a VA loan, but because I was only in the house less than a year, I had no equity built up. I was lucky to sell at exactly what I owed on the mortgage, but closing costs cost me over $15000, which after being unemployed for half a year, didn't exist. Talk about a financial catastrophe. I won't buy again, job security doesn't exist in my profession enough to make it worthwhile again.
Sylvia, truth be told I wasn't planning on it at the moment. However, I would certainly be open to it if there was a good amount of support. What exactly would you be interested in learning about when it comes to alternative housing? Thanks for the support!
Tiny Houses are silly. Extremely expensive for the square footage and usually the 'bedroom' is a loft which is impractical for older adults. Little storage space. Obviously not for a small family and hard to fit a couple in one. Then the land...where is the tiny home' ??? These are a Fad and as inappropriate as the McMandions of the '80s.
pretty good however all of these comparisons miss one significant factor. They allow a "leveraged" return on buying a house but don't provide for a similar leveraged return for the renter. Even just a 2X leveraged return would give the renter a dramatic advantage over the buyer in the end. Assuming a 20% down payment you're giving the homeowner a 5X leveraged return. The counter argument is "leverage is risky", so is a house leveraged at 5X. Anyway, the renter can technically put a $50k "down payment" on a $100k stock investment and then pay it down similar to a mortgage and margin rates are only around 2% vs 4.5% fixed mortgage rate. SPXL gives 3X leverage without any margin costs. Anyway we need a healthy balance of owners and renters to keep their respective markets in balance.
Definitely a solid point with respect to leverage. However, a typical single family home doesn’t usually have the risk of losing 50% or more of its value in a given year either. The risk profile is nowhere near the same for the 5x leverage comparison. Regardless, the stats and back testing show that the renter/investor wins 10 out of 10 times over the 13 year average ownership time horizon with even a modestly leveraged 0.5x portfolio. The transaction costs are just too high with real estate, not to mention the headache of maintaining a property.
@@CalmerThanYouAre1thank you for your reply. I hear and appreciate your point about a house not being able to to lose 50% of it's value in any given year. Here's three things to consider. 1. At 5X leverage it only needs to drop 20% to be wiped out (even less including transaction costs). 2. how much would you lose if you were forced into foreclosure? I would predict 100% of your equity and then some. 3. It's been reported that many people put LOC's on their houses to invest in the market. I would say that's significantly more dangerous and wasting interest on that. On a side note I really despise people that brag about making money on foreclosures which in reality they're just making money off of some unfortunate family losing their home. I understand foreclosures are necessary however what purpose does it serve to brag about making money off of someone else's pain and suffering?
john nickle i think you’re missing the point. As long as you can pay your mortgage, there is no risk of foreclosure. Home values are not nearly as volatile as the stock market. You’re tying the risk of someone losing their job to the investment value of a home. Completely separate things. Personally, I believe the math supports renting and investing in instead of buying. However, the risk and volatility are definitely much higher. And the intangible aspects of owning a home change the equation substantially as soon as one has a couple of kids, especially if certain communities, school systems, etc are desired. There’s a reason most renters don’t live in upper middle class suburban communities with the best school systems.
@@CalmerThanYouAre1 i missed the point? You missed the point. You said the market can lose 50% in a year, which is extremely unlikely and even if it did it would be short lived. I gave you the benefit of the doubt and used a 20% drop in house value when in reality it's only a 10% drop on a 5x leveraged house to lose "50%" of your equity. As for foreclosures, if you don't have a long term fixed mortgage it wouldn't take a lot of increase in interest rates to push your mortgage payments into a danger zone so it doesn't just have to be a job loss to put you into foreclosure. There's a myriad of reasons for foreclosures. Also when interest rates rise enough the "value" of houses will have to drop to compensate for the reduction in buying power. Governments push home ownership because it keeps people enslaved. You can't control people who are financially liquid. How many people do you think now living in "chop" own a house somewhere? I wonder how real estate prices are doing in the "chop" zone now.
Hi there, a fan from Australia here. Is it possible to have a scenario for an expensive city like Melbourne or Sydney? It’s pretty much equivalent to New York or LA in US for real estate. I found if you can Include tired scenarios analysis (expensive vs. average), it is more relevant to audience from different types of areas. The medium price you used here is around 50% of houses in Melbourne or 1/3 of Sydney metro areas. Thanks.
Great content! I’m just lost at how after selling the first home and paying 25% for down payment and closing cost for the new home their net worth went from $339,600 to $410,000. Shouldn’t it be $339,600-($470,000*5%)=$316,100? The $94K in down payment shouldn’t affect net worth as the cash reduction gets offset by increase in equity? Thanks in advance for anyone who can help me understand.
How I see things on my side, Buy a small house with a mortgage not beyond 15 years because honestly beyond 15 years is a Financial Rape. If it happens that I change city, work on whatever I can rent again and rent my own small house which will be paying for it's own mortgage. At some point maybe even buy another house and I'm good with 2 mortgages 1 paid by the person renting 1 paid by me. I also see this as, for example if i lose my job I can go live some time in my brother's house while being able to pay for my house mortgage by renting it.
It's sad that you have to rent out part of your house to cover the mortgage. You're screwed if you have a crappy tenant and plus pro-tenant laws that are being enforced like in NYC...
Long story short: if you invest and are successful in financial return from assets then renting is slightly worse. If you don't invest in anything then renting is absolute madness.
It's better for me to rent and invest the difference at this point in my life. If I had a home all the extra costs would prevent me from investing as much as I do currently.
There's no doubt owning a house is a financial anchor. One thing that somehow gets missed in these videos is that say you and I have $100k. When I go out and buy a house worth $500k, then that $100k goes in down payments but someone else gives me $400k - as in $400k of real estate. If the house appreciates, then I, alone, benefit by the gain in that $400k. It's a fact that no-one is going to lend anyone $400k if there's no collateral. You are free to invest your $100k as you like. You could do well - your comment is a year old when I write this - so go back to your year younger self and buy some bitcoin at $7000 - your $100k would now be worth, a year later, $871k - ain't hindsight wonderful! Want to know what your $100k would be worth in another crypto currency dogecoin? In the last year your $100k would be worth $190million.
In the mid term, when you're youngish, use the fact that you are renting to benefit from the most important aspect of renting which is mobility. Move to better jobs and better prospects. Buy once you've identified your 'forever' location. I can ask every single one of my home-owning friends and they will all say "I'm really glad I bought a house when I found I wanted to live here for 20+ years... because now that I'm older and my earning potential is diminishing, I could not possibly afford to buy the house I'm living in: neither could I afford to rent it." Because I've slogged through 20 years of overpaid mortgage payments the house is mine and I pay tax and insurance and that's about it. (FYI I made absolutely sure I didn't buy a house with an HOA - if you need any advice at all then that's it - never purchase properties controlled by HOAs). Good luck!
Buy a home, rent the home, and live in a small apartment.
If you don't live in the home, it's not your home, so why bother?
We did that. Rented and then bought a house. Rented out the house for 3 years. Moved into it once we could afford to. We then bought a second house. Renting it out. Going to go buy a third house today.
house is a security, not investment... I did tell this several time to my students.
I was just thinking about this! I made the decision to start saving for a multi-family unit for house hacking (live in one unit, rent the others) for my first property. Great video!
I love where your head is at, Viet!
This is fantastic. We find ourselves in an expensive city, making okay/good money but with this conundrum of a question. So thanks so much!
Don’t do it!!! A home was the worst life mistake I ever made as a human being. They brake, they keep you broke and in constant debt, I would forever give my landlord a happy rent check, plus more for the peace of mind I enjoy. Every room becomes an abode for more and more stuff you don’t need. Constant repair and maintenance headaches. When you buy a house you become a whore to home improvement stores. Less is more, no wonder many marriages fall apart because of financial stress and strain. Don’t let traditions manipulate you from a happy life. It ain’t worth it folks, don’t finance your own mental trauma and misery.
yes people always berate us for renting for so long but I love our rental the only bad part is dealing with the landlord (but that's rarely) otherwise it leaves us with so much time to relax etc
Zar TheMad No, I brought a house when I should have stayed in an apartment. Buying a home is being a whore to a home improvement store. Renting is tops because it’s hands off. Rent goes up, tell me in life what costs money doesn’t.
Thanks for your honesty
I've owned two houses in the past and am currently renting. The annualized return on the first house was a paltry 2.9% and on the second was 5.1%... but that's not counting money I put in for repairs and renovations.
Any investor knows that the best long-term investment is diversified in terms of market sector and geography. Owning a house is a large investment in a single sector and single geographic location... which is very risky.
That's a great way to put it 👌
Spot on. I currently have a modest house with a manageable mortgage, so I can still max out my Roth contributions. When or before I retire I will sell it, invest the proceeds, and rent. When I'm retired I prefer the simplicity of renting.
Should you rent or rent. Property taxes are rent. Only difference is who mows the lawn or fixes the toilet.
I like how this compares buying a house vs renting, as opposed to buying vs renting a house, which so many of these types of comparisons tend to do.
Use the 5% rule as a good baseline to find out what’s better. Take the house price and times by 5% then divide by 12. If rent prices are cheaper for the same place, might be better to rent.
one downside of owing a mortgage is you have to purchase home insurance, which is a racket with high deductibles and only really valuable if there is catastrophic damage. With interest rates so low, monthly insurance costs can be half of the mortgage payment for many.
the flip side of ownership is responsibility, and homes can be headaches as you are responsible for many more inputs and outputs that are not fun. The fun stuff of ownership are small compared to the un-fun. some landlords can suck, but renters can be discerning and find a decent landlord. It is true that the quality of rentals can suck in some places, and renters can be treated as second class citizens, and that is stupid and unfair.
Yes I want that video!
I am laying in bed watching these back to back like it's a sitcom re-run. I am half asleep now but don't want to stop; your material is too good! Nevertheless, tomorrow(well, today now) is another day. Good night(good morning😆) and thank you
🤣This comment👍
Excellent video, as always. It’s surprising how close the math is, as well as how much factors like how often you move and how much you pay in closing costs matters.
Sadly, I think the reality is that many renters do not “invest the difference” between their rent and what they would have paid in owning a home, either due to necessity or lack of knowledge from videos like this.
Renting, one could argue, also poses more risk in the form of a landlord that could decide to not renew a lease and therefore force you to move, perhaps to a lower quality or higher rent place.
It's definitely something that needs to be considered carefully before making the decision to rent or buy. I also agree that renting can pose more location stability risk which can be a major con depending on your situation (particularly for those with children... just one of the many reasons to consider home ownership even if the numbers come out in favor of renting. Like I've said not everything is about the money :)
Investing regularly is the key. If one has the options are renting and regularly making diversified investments (stocks and bonds) and owning and not having enough for other investments, renting is probably better. But as you say, people probably don't make other investments regardless of whether they rent or have a mortgage. If that's the case, having a mortgage does at least build some equity even if there are significant disadvantages to ownership.
My way is to buy a house with separate garage, live in garage, rent out the whole house, mortgage will pay for itself... win-win
Also, buying a house in HOA area is like having a landlord on steroid...
Why not include the garage to get higher rent, then rent a different place for a higher quality of life for yourself?
@@Stone_624 I couldn't imagine you would find a cardboard box cheaper than a 400sqft garage.
I feel poor. My house only cost 80k. Great vid!
Does the home meet your needs? Is it an enjoyable place to live on the whole? If so, then I'd feel pretty great that it only cost $80k! That means you can put more of your money toward other things like investing :) Thanks for the comment!
Yes I’m very happy and I do save and invest. My only debt is my 0% car loan and my house. Will all be paid in less then 10 years. I feel I got a great deal on my house as well. Love the vids keep it up!
Sounds to me like a pretty awesome situation to be in! Also sounds like you're well on your way to financial independence if you're already saving and investing and will be totally debt free within the next 10 years! Keep up the great work :)
As always, informative video!
Thanks, Erika!
I've owned multiple homes. I can't relate to any of the math in this story... I have an MBA in finance so I don't think I'm too bad at doing the math, and so far I'm far better off financially from having owned my own home.
Facts!!!!
I'm buying & then renting the home. I keep most of my money and have other pay off the mortgage.
That definitely helps a lot!
That's what I'm about to do too
We were in a 3rd scenario. We physically build our own house and paid as we went. We never carried a mortgage It was a lot of work and I would never do it again but it was totally worth it.
I can imagine! Building a home takes a lot out of you, but I'm glad to hear that it was worth it in the end :)
I think it's important to also sometimes put a price on the value of the other luxuries of owning a home; ie yard, space, neighborhood , etc
1. Why do you compare "house that costs $200,000" with "rent that costs $1,440"? Why don't you compare "rental of the house that worth $200,000"? Which, most likely, will be about $1,800 to $2,000...
2. Why do you add $400 for utility to a "house owning", but don't add it to a "rental"? It's really rare, if not "impossible at all" to find a "rental", where you have Internet / heating / electricity / phone / water / etc. included. Especially if you rent "a HOUSE", and not "room in the basement".
PS. To make it fair comparison... Let assume that someone buys house as a "rental business property" and then compare "living in this rented house" with "buying the same house for your own living"...
Gr8 video. Please also do a video on other things to consider
Thanks for the feedback, GreenDagger!
However for the same or much more square footage we can get a 3 bed 2 bath house with a $1k housing cost vs the $1800 in rent for a 2 bed 2 bath. Freedom is priceless and building equity is financial peace, esp if we get a new house we would use the first home as a rental property. Dog needs a back yard, I want an office with a growing family. And with first time homeowner loan assistance we can circumvent some of those upfront costs. 💸
I wished you did the video with equivalent property instead of average. In your video your rent price was 1400, that would be roughly what rent would be in my condo area at the moment. But I purchased my property and my mortgage with HOA is about 800. Just rent vs mortgage for the same property would be a difference of 600. I know some areas it is harder to find condos. Either you purchase a house or rent an apartment.
if you just take the difference of 600 per month and calculate it over the course of the 30 year loan @ 7% that comes to 485k.
Owning a home has more upfront cost but over time it does have its advantages.
the Rent is higher than mortgage payment, but there are much lower upfront cost noted in your video. But it can and could raise over time with inflation.
If you do not rent in one location for the long term, the cost of moving from one location to another is another money factor.
And at the end, this is not a cost that can decrease or go away. If the property or loan is low enough, you can pay it off early then live without a mortgage, but you will be stuck with the HOA. Lastly, the rent that you are paying is going to some one else’s mortgage. You are bring up someone else’s equity, not yours.
The principle you are paying is not going away, it becomes equity to your net worth then you decide to sell the property.
Renting does have its advantage in the short term,.
Gives you time to find out where you really want to live. You can experience living in different locations until you find somewhere you like.
With the lower up front cost it can be a platform to save money to purchase a home down the road.
You do not have to worry about fixing the home/appliances, this would be addressed by the landlord.
Hung, homeownership definitely does have its advantages (financial and otherwise) depending on your situation. And, as I've said, real estate is such a hyper-local thing that the price comparison can vary widely depending on where you're looking. It sounds to me like you're in a situation where owning appears to be a favorable option from both a personal and financial perspective! Thanks for the feedback :)
Lets all just agree that both renting and buying are too expensive and that the quality of life for younger generations will be worse than their predecessors.
Venictos, I do agree that in many parts of the US both renting and owning are pretty expensive (at least in relation to typical incomes in each area)... however, I won't go so far as to say that quality of life for younger generations will be worse than their predecessors. In my opinion, it's just too early to say.
I also feel that housing (while a very important part of a financial plan) is just one of the ingredients for a high quality of life. Younger generations (should they keep the rest of their financial lives in order) will have much greater flexibility when it comes to keeping those costs under control in relation to their incomes (many have taken to geographical arbitrage or remote work to enable them to live in a more cost-effective area. Others have house hacked and so on). A small misstep here is not necessarily a back breaker, so long as you're on point in other areas :)
Your analysis is pretty decent. I would have recommended including a sensitivity analysis for the major assumptions so that a range is presented. Maybe an addendum video. As someone who owned a house with 3% plus percent property tax rate and a nominal depreciation (not appreciation) of 2% over 14 years in total, the differences are quire stark to net worth.
Jeffrey, that's actually not a bad idea given how hyper-local real estate can be... kind of wish I had thought to do that in the first place. Ranges were discussed for quite a few of the assumptions in earlier videos, but perhaps an additional run through of common expectations would be appropriate for any future videos on the subject. Thanks for the suggestion!
@@NextLevelLife Thanks. Its just offers viewers something you don't really get elsewhere. Summary videos with no depth are easy to find, and that is just more than real estate - it covers basically any topic. But put together the list of major estimates, go behind each major assumption behind those estimates and provide some sensitivity to differences - and you will provide something pretty much no other channel provides
@@NextLevelLife Also - you might want to add an analysis for those individuals with high state income and property taxes in regards to the pre/post 2017 tax law changes. That has a big impact. Basically if you move from a high tax state to a low tax state, you can end being able to deduct some or all of your property taxes where now you would most likely be capped out with income taxes if you enter the top quintile of income in a high tax state
Buy a duplex or triplex and live in one unit works well.
A home is not a productive asset.
Therefore Buying a home (to live in) is never a financial win.
Buying a productive asset (a home to rent out), and using that income to pay rent (net positive cashflow), is the best move.
Therefore, Renting is ALWAYS better than buying, Assuming you do it right. If you don't do it right you're throwing money away regardless.
@@zarthemad8386 Actually I'm far from broke. At 25 I'm doing much better than most people my age. In the top 20% based on what I've seen.
I was broke 4 years ago. It was terrifying. So once I got in a position to get out of it, I took steps to make sure I never fall back into that situation ever again.
The average rent-length in the USA is about 3 years, so that another ~$5000 every three years less to invest. That makes a huge difference
What if I’m not investing? (Also how do you get into investing? I don’t have the time or knowledge to do stocks)
Potential first time home buyer. I’m moving and thought maybe I’d buy instead of rent. There are decent homes from around $100k-$140k. And rent would be about $850/mo. I have the 20% down payment. My salary is $49k. I will only live there for 3-4 years.
Consider getting together with family. Purchasing property and buying smaller trailer homes, you can get a pretty luxurious home for a fraction the cost of a house on an eighth acre. Plus, family can pool resources for Bills and everyone saves money.
Good video. But I think you left off repair bills. A house will need a new roof and A/C unit eventually, for example.
Maybe you can do a comparison of buying vs renting a condo.
Love the videos! It opens my eyes
Real reason for buying a house is to take advantage of taxes. The governments will pick up about 30% of your housing cost. But with the new higher standard deduction the benefit only matters when interest and taxes exceed 12,800.
Really? Because my property taxes say otherwise.
I don't believe that over 30 years the rent increase from $1700 to $4000. Is the salary also increasing following the inflation rate? Perhaps 3% appreciation is not yearly, but 3-4 years. I think it's more realistic.
Is the $1700/m rental an equivalent home to the $300.000 house? Or is the video comparing compact cheap living vs a complete family living?
Don't you have annual Common hold fees or Association fees for rental properties in the U.S?
Another great video. You've really been filling in your rent vs buy playlist lately. As someone who already owns a home and doesn't intend to sell any time soon, I've got to be honest I was hoping for something different this week. I of course continue to watch however, because you put out great videos and I always love expanding my knowledge on these things. Thanks for all the effort you put into your videos, keep up the great work.
Andrew, yes I've been tackling the topic quite a bit over the last several weeks. I just wanted to make sure I was thorough with such a big topic. Thanks for the feedback and continued support. I really appreciate it! Just so you know, I will be moving on to some different topics starting next week (and this will be the last rent vs buy video for quite a while).
@@NextLevelLife That makes sense. It's a big topic to cover and for those trying to decide between renting or home ownership. It's a big deal and I'm sure this series will be very helpful for them. Glad to know there's some other topics in the near future. I look forward to your upcoming videos. They're the best part of most Mondays.
I definitely want to see the video on the non-financial considerations that you mentioned near the end :)
I live in NYC where an average rent is $2600-$3,000. To me it doesn’t make sense to pay this kind of rent and make more sense for me to buy. I paid $200 more a month mortgage vs rent, and building equity. The issue is putting down the very high down payment but it just makes sense to buy if you live in an expense city, and if you get the down payment together. I’ve
This is a great topic 👍 Personally, owning is important to me. I live in a high cost of living area and pay a lot for home ownership. But for my lifestyle and personality (introverted homebody who loves to reno and decorate!) it's worth it to me 💕
Lissa, that is a perfect example of owning being a great move! (so long as the high cost of ownership isn't crippling your other financial goals). You may be spending a good amount of money on the home, but by the sounds of it you are getting great value for the money spent :)
@@NextLevelLife Thank you! I genuinely believe I am 😄
Enjoyed this vid thanks
Yeah but what if you pay off your house and say 10 years then the homeowner comes out way ahead
@joseph mengele04 If moving, just buy another then rent this one out. problem solved.
Instead of aggressively paying down your mortgage, refinance to these ridiculously low int rates and invest your leftover cash in stocks. I never understood why people focus on aggressively paying down cheap debt.
You're also not comparing realistic scenarios. You're comparing buying a 2bdr house with a 1 bdrm apartment. Realistically if you're looking at living in the same area the morgage+hoa+property tax+insurance will ~= the rent. Plus the rent tracks the housing market not inflation. Also you should account for moving costs and it is likely to increase standard of living more often when renting. All in all it is much more expensive in a realistic sense
I like your videos but think ownership may have been a little under-represented.
I think that moving city to city often makes it even more beneficial to purchase property. I do like your point that doing a "cheaper" option only actually helps if you are responsible enough to save/invest the difference.
If you buy a home to move in, you actually only need 5% down with good credit - and in some cases you could do 3.5%, 3% or even 0% making your only additional costs the closing costs & earnest money - the latter of which you get back upon closing. If you buy even just a mediocre wedge deal then your mortgage won't actually be any higher than buying a home at its fair market value with 20% down AND you won't owe PMI. Even going in with less equity, you can have the PMI removed once you reach 20% equity by paying down your mortgage and appreciation.
Using the houses in an example town of Maryville, TN - full PITI for a 3/2 you bought 15k under value (as you always should do - and this is a weak purchase in my opinion) and 10k in for that required 5% down payment, you're full PITI is about $1250, rounding up.
Current rent for a similar home would be $800-$1500 in that area. Splitting the difference, that makes fair rent $1150 at the time of purchase. Now, after a year you can rent it out - but if you stay in the average 13 years that most homeowners do, then the home has almost certainly gone up by $25 a month in terms of the rent that it is worth each year.
Meaning it now rents for $1475 when you move out. Assuming you manage the property yourself, that's an okay profit. If you delegate out the management, your mortgage is at least being covered by someone else with some limited vacancy. Taking into account equity paydown, tax benefits and appreciation would make this even more in favor of ownership, as would refinancing once you move out to turn the home into a rental. Although, refinancing would have some additional associated costs.
You can also get the maintenance costs much better on the back end if you do the right things early on. Kind of how a new car needs a mechanic less often than a used car.
Naturally, this only works if you know how to crunch these numbers and make a good deal - which requires deliberate education on the new buyer's part and work on the front end to MAKE the passive income source a reality. Most people will instead pay $200k for a house that is worth $200k and in many cases later regret it because it is costing them money.... or rather, not making them anything - which is why the advice in this video and Dave Ramsey's are applicable to most people.
TL;DR - It's better to rent and make me money as your landlord if you don't spend the time to educate yourself on real estate - but if you are willing to learn, then you can beat these example numbers. Both mine and Next Level Life's.
Relentless Growth, that is true! If you engage is house hacking through the renting of your owned property the numbers can flip very quickly! Although, renting with roommates (rent hacking) can have similar effects. However, that doesn't discount your other points (particularly those about the maintenance costs which are incredibly valid and underrated in my opinion!) Again this is why its important to be honest with yourself, look at your own situation carefully and decide which path is best for you, both financially and otherwise. Since the numbers used in the video were rough averages it is very, very possible to do better in either decision (possibly even significantly better). Thanks for the comment :)
@@NextLevelLife The feeling is very mutual! I'm super pro real estate so whenever I comment in disagreement to a more experienced creator, I feel like I'm poking a bee hive XD
I can understand the feeling! I'm perfectly happy when viewers share differing views to my own (so long as they're being respectful about it as you were). After all, how else am I going to learn?
Let’s see it!!
The comparison is not valid: A flat to a house with different values. Also using average prices is distorting the outcome.
Good lord imagine being able to buy a home for $200k. Where I live the average price for a small house is $1mil.
@J F lol its not some exclusive area or anything, its just where I live / where the work is. All the major cities are like this in my country. Very expensive. If you leave, you end up in some tiny town and no job, so....
Im renting because I can;t pay the house in cash , I dont want debt
Yeah but interest rates are at historic lows. Why not take advantage of cheap leverage as opposed to your own capital. Instead, invest your savings in a diversified stock/bond portfolio. Long term your portfolio should significantly outperform the low mortgage interest rate. That’s what the rich do...the OPM method (spend “other people’s money”) 🙂
Go over the things to consider when buying a home?!!
I've rented for years, but since I'm going to be running a small home business, I'd like to buy a small(under 1,000 square feet) two bedroom house, preferably with cash. As far as time in the house, I can honestly say I don't want to ever move, so I'd be there for the next 35-40 years. Having had to move abruptly last year when my rental home was sold, I welcome the security and added costs of living in a modest, older home. Fortunately, housing prices are relatively low in my region, so I plan to find a nice, quiet place next summer.
You can do it!
@@NextLevelLife Thanks for the encouragement. Your videos have been very helpful.
I lost my job a month after closing on a new house. There wasn't any work in the area and I had to move. I didn't have large closing costs getting in thanks to having a VA loan, but because I was only in the house less than a year, I had no equity built up. I was lucky to sell at exactly what I owed on the mortgage, but closing costs cost me over $15000, which after being unemployed for half a year, didn't exist. Talk about a financial catastrophe. I won't buy again, job security doesn't exist in my profession enough to make it worthwhile again.
This was a great video! Are you going to do a video on alternative housing ( like tiny houses)?
Sylvia, truth be told I wasn't planning on it at the moment. However, I would certainly be open to it if there was a good amount of support. What exactly would you be interested in learning about when it comes to alternative housing? Thanks for the support!
Tiny Houses are silly. Extremely expensive for the square footage and usually the 'bedroom' is a loft which is impractical for older adults. Little storage space. Obviously not for a small family and hard to fit a couple in one. Then the land...where is the tiny home' ??? These are a Fad and as inappropriate as the McMandions of the '80s.
Very few people put down 20% on a home.
Not the best comparison
Yes make it
Thanks for the feedback, Don-micheal!
pretty good however all of these comparisons miss one significant factor. They allow a "leveraged" return on buying a house but don't provide for a similar leveraged return for the renter. Even just a 2X leveraged return would give the renter a dramatic advantage over the buyer in the end. Assuming a 20% down payment you're giving the homeowner a 5X leveraged return. The counter argument is "leverage is risky", so is a house leveraged at 5X. Anyway, the renter can technically put a $50k "down payment" on a $100k stock investment and then pay it down similar to a mortgage and margin rates are only around 2% vs 4.5% fixed mortgage rate. SPXL gives 3X leverage without any margin costs. Anyway we need a healthy balance of owners and renters to keep their respective markets in balance.
Definitely a solid point with respect to leverage. However, a typical single family home doesn’t usually have the risk of losing 50% or more of its value in a given year either. The risk profile is nowhere near the same for the 5x leverage comparison. Regardless, the stats and back testing show that the renter/investor wins 10 out of 10 times over the 13 year average ownership time horizon with even a modestly leveraged 0.5x portfolio. The transaction costs are just too high with real estate, not to mention the headache of maintaining a property.
@@CalmerThanYouAre1thank you for your reply. I hear and appreciate your point about a house not being able to to lose 50% of it's value in any given year. Here's three things to consider. 1. At 5X leverage it only needs to drop 20% to be wiped out (even less including transaction costs). 2. how much would you lose if you were forced into foreclosure? I would predict 100% of your equity and then some. 3. It's been reported that many people put LOC's on their houses to invest in the market. I would say that's significantly more dangerous and wasting interest on that. On a side note I really despise people that brag about making money on foreclosures which in reality they're just making money off of some unfortunate family losing their home. I understand foreclosures are necessary however what purpose does it serve to brag about making money off of someone else's pain and suffering?
john nickle i think you’re missing the point. As long as you can pay your mortgage, there is no risk of foreclosure. Home values are not nearly as volatile as the stock market. You’re tying the risk of someone losing their job to the investment value of a home. Completely separate things. Personally, I believe the math supports renting and investing in instead of buying. However, the risk and volatility are definitely much higher. And the intangible aspects of owning a home change the equation substantially as soon as one has a couple of kids, especially if certain communities, school systems, etc are desired. There’s a reason most renters don’t live in upper middle class suburban communities with the best school systems.
@@CalmerThanYouAre1 i missed the point? You missed the point. You said the market can lose 50% in a year, which is extremely unlikely and even if it did it would be short lived. I gave you the benefit of the doubt and used a 20% drop in house value when in reality it's only a 10% drop on a 5x leveraged house to lose "50%" of your equity. As for foreclosures, if you don't have a long term fixed mortgage it wouldn't take a lot of increase in interest rates to push your mortgage payments into a danger zone so it doesn't just have to be a job loss to put you into foreclosure. There's a myriad of reasons for foreclosures. Also when interest rates rise enough the "value" of houses will have to drop to compensate for the reduction in buying power. Governments push home ownership because it keeps people enslaved. You can't control people who are financially liquid. How many people do you think now living in "chop" own a house somewhere? I wonder how real estate prices are doing in the "chop" zone now.
Hi there, a fan from Australia here. Is it possible to have a scenario for an expensive city like Melbourne or Sydney? It’s pretty much equivalent to New York or LA in US for real estate. I found if you can Include tired scenarios analysis (expensive vs. average), it is more relevant to audience from different types of areas. The medium price you used here is around 50% of houses in Melbourne or 1/3 of Sydney metro areas. Thanks.
Ah the age old question...
Great content! I’m just lost at how after selling the first home and paying 25% for down payment and closing cost for the new home their net worth went from $339,600 to $410,000. Shouldn’t it be $339,600-($470,000*5%)=$316,100? The $94K in down payment shouldn’t affect net worth as the cash reduction gets offset by increase in equity? Thanks in advance for anyone who can help me understand.
How I see things on my side, Buy a small house with a mortgage not beyond 15 years because honestly beyond 15 years is a Financial Rape. If it happens that I change city, work on whatever I can rent again and rent my own small house which will be paying for it's own mortgage. At some point maybe even buy another house and I'm good with 2 mortgages 1 paid by the person renting 1 paid by me. I also see this as, for example if i lose my job I can go live some time in my brother's house while being able to pay for my house mortgage by renting it.
One other thing to consider is that mortgage interest is a tax write off against your income.
Don't you have to re-claim the interest tax deduction when you sell the house?
you cant rely on investing. A home is real material , shelter. Investments are very volatile. Own is always is something you have.
Im so lost
Too late bought mine a year ago
lol 😂
Got to be conservative. Use closing cost 10%
Renting is fine, but never as along term Option
more the issue with renting is other peoples expectations that you should buy
It's sad that you have to rent out part of your house to cover the mortgage. You're screwed if you have a crappy tenant and plus pro-tenant laws that are being enforced like in NYC...
Do it
Thanks for the feedback, saqued!
thumbs up^^^^
Depends on your lifestyle. Single vs married. Kids vs no kids. Dogs vs cats🤣
buy a home, rent the home, buy a home, rent the home. rinse repeat
is it possible for the landlords to steal from their tenants ?
Buy a house rent it out, sell your car, buy a small camper/van and live in it.
Crappy way to live
What happens if I'm a crappy investor and spend all my extra money on beer?
Long story short: if you invest and are successful in financial return from assets then renting is slightly worse.
If you don't invest in anything then renting is absolute madness.
don't agree because renting is so easy and less stressful
Neither.ou should build one yourself.
You mean with your own 2 hands? a team? or a company/builder that sells new homes like M/I Homes?
@@o4saken1 Gather some friends hire a carpemter to teach you a few tricks if needed and bite over more than you can chew and chew it!