I am a military officer that always rented for half the cost of what my expected mortgage would be and invested the rest into ETFs. Now, 20 years later, I am about to retire at 44 with a 7 figure net worth and military pension.
If you rent, you owe the landlord. If you buy, you owe the bank. There has always been a negative stigma around renting. I am 65 and have plenty of money to buy into a mortgage…but prefer not to. My life is much simpler and I invest into savings vs paying mortgage interest. My choice and I have zero debt. I am in a better position than most people my age that are trying to downsize and reduce debt. No worries and I can come & go as I please!
@ apartments never said we would own our unit. They claim that we will own our homes after paying it off but that really isn’t true. You never really own it.
The video left off a few key points 1. You're getting a 5.5% return on $250k (value of home) annually vs 10% return on $50k 2. Plus with a mortgage, you are paying down the debt 3. If youre going to count mortgage payments against your profits, you have to subtract rent payments as well. 4. The down payment was $20k in this example but they subtracted 50k from profits. Also, you can use first time home buyer option and put down less. 5. I think the key is finding a home thats not sooo much more expensive that you cant save. Also, avoid huge down payments because that will take away from oportunity costs.
Live in van be perfect if it wasnt for the lucifer scum pig police saying you can park anyware (cars have more rights than fken people 2024) but you can't sleep in it!
I rent an apartment in Texas, currently $942/month ($11,304/yr), rent goes up every year but so does property taxes and maintenance fees for condo's. I could buy a similar condo for $149,000 which has a $691/mo maintenance fee, $3,900 property taxes plus I would lose $7599 of interest on the $149,000 that I use to buy the condo. So cost to own a condo is $19,791 vs $11,304 to rent. Renting is cheaper because I can increase my savings by $8487 a year. Rent will go up each year but so does maintenance fees & property taxes. Yes property will rise in market value most years but $8487/yr invested @ 5% interest will become over $563K over 30 years.
Love that you ran the REAL numbers. Buying can be wonderful UNTIL it isn't. If the time comes when you want/need to sell, that is when things can be sticky. Someone has to WANT to buy YOUR house and all that comes with it.
@@robocop581 i can see landlords wanting more people to rent.... imagine if everybody was a landlord .... bad balance ratio of more landlords vs tenants
People in NYC rent forever and never worry about owning. I have a friend living in Brooklyn that pays $900 per month. If he bought a house right now he would be paying somewhere around 4k per month.
Well that’s one lucky ass friend. I live in Brooklyn on kings and it’s shit for a college student like me. Renting is so high just from on bedroom ranging from 1800 if you want a pet rat and a run down place that’s never weather proof (be heater leak or no ac in sight) to 2300 just for an apartment. So me personally i would rather buy risk the cost compared to the new upcoming rent increase. We having implemented the landlord paying broker fee and once that hits I’ll be trapped living with my mom until i graduate and hope for a good ass income.
I been renting most of my life for 30 yrs and now it’s unaffordable to own house. I can only afford condo now. My brother brought house 25 yrs ago for same price of studio condo and now worth more than 1M if he sell it. I moved few times cuz landlord raise the rent. I think it’s still better to own than rent in long run. I have better esteem of ownership and freedom from landlord.
Thats if someone will buy it. Also keep in mind the fees etc that come with the sell and he would still have to buy another house (if he wants one) which also comes with fees etc. Also factor in the money he spent over the years maintaining it. Really breaks even if that in the long run. Ownership still comes with its cons too. I know how you feel though.
Buying is better. The thing is the house where you live is bot an investment. So maybe thr ideal is to go for cheaper than you think you can afford. And then consider an investment if you actually can buy to let.
I was just doing the math on this in my personal life . Homes are now like 450k in Atlanta with 7% interest. That’s over $1,500 a month in interest alone . We aren’t even talking about the increase in property tax and insurance and more . I don’t see why I would buy .. the money u pay for interest on the loan is like renting 2 homes at once
when i bought a new home and had no kids and no repairs and had grants to buy it, it broke even. when i got an older house, had kids and had lots of repairs every year, it was around 8k in repairs per year, it was a nightmare, with a house you also do a lot of making it yours and yard work alone can be extremely expensive. other thing i realized that if you don’t pay taxes they will sell the house to cover the cost of taxes, so it is an illusion that kept me house poor.
Love this video! I bought a house in my 20s and sold for a profit, but I put soooo much into it in maintenance. I would have been better off investing my money, and had my weekends back that I spent painting and sanding and stuff.
Property taxes dissuade me. Why do we pay rent for land we buy to the state government that doesn't own it? In todays system buying still means renting. Only way you own something is if you dont get it taken away from a outside source for not paying a imaginary # made by said outside source.
This does not take into account the tax side of things capital gains on s&p will be 15-23% at least vs for 1st time home owners you don’t pay taxes on like 250-500k of gains so it is a big deal
So many are focused on making money, instead of just finding an affordable place to live. Taxes, insurance, and repairs are the bills that never go away, and also the bills that increase. People also dig themselves into more debt, using their home as an ATM.
Thomas is correct, home buyers like to ignore the opportunity cost , which is huge ! Opportunity cost gives renting ALWAYS the better financial outcome over buying, unless the stock market collapses, but than your house value will too!
Sometimes it's better to buy a house, sometimes, it's not. But, investing in housing? Good luck with that. If you buy houses for renting? There are good tenants, and bad tenants. So, sad stories waiting somewhere down the road. And, deteriorating occurrs with time. And, believe it or not? Sometimes, a whole town, city becomes ghost area for some reasons. So, invest in something else, leave the housing market alone, and let the houses you will not live in to take care of those who will need a roof on their heads.
Buying a house is forced Savings. Most renters dont invest what the would be forced to pay on a mortgage and most gets wasted. Cheers thanks for the differing point of view
I’m one of the renters that do is call discipline. I rent 850 per month invest 4,500 per month wife and I. I own before sold 3 years later when I did the numbers. Best decision I ever made. And I agree with you a lot of people do it also for force saving just like getting a car payment. That’s what you call weak minded people. I’m not here to impress anyone I love money and I’ll continue to invest hard to retired on my 40s but that’s me.
4:35 Am i missing something here? You don't take into account the rent that you continue to pay while you invest in the index. Yes the equity value of the house might be lower than the equity value from the index but what about the annual payments from rent? Also in the first scenario you sell the house and you pay tax but in the second scenario you don't sell and don't take into account capital taxes
Here in Texas. I had to buy a house since the mortgage and rent were about the same. A house got me a 2 car garage, 3 bedroom, 2 bath. The same cost for an apartment only got me a one bedroom. Now this was back in 2018. My house was $250,000. Now it’s worth $370,000. And my mortgage only went up a couple hundred dollars due to taxes. Now that same apartment more than doubled what my mortgage currently is. I can sell my house now and get a nice check out of it.
Anyone who bought a property before 2022 is definitely ahead by now in 99% of cases. The only people getting screwed are new buyers that got into the market after 2022
S&P500 doubled in the same period. That is the point of the guy in the video, in the long shares outperform property. Unless you get an insanely low loan interest rate.
An issue folks in my country are facing right now is low stock of rentals. Specifically pet friendly properties. For example, in my area there are 300 units for sale and 15 units to rent. The bond repayments are around 30% more expensive than the rent would be. Unfortunately, the rental properties SUCK. Dark, worn spaces located in the less favorable areas. The buy vs rent argument is quite complex. I prefer renting but, feel like there just aren't any suitable rentals. It's quite the conundrum.
I didn't plan this but here's how i got to my dream house. Bought a duplex. Lived upstairs rented the lower floor moved out 1yr later bought a second house duplex pays the fixed rate mortgage on both. 3rd property built new. Rented that house out brand new to a renter. Never lived in it not one day. Repeat as often as I dared. Always leveraging a mortgage with a renter. Out of pocket cost $1100 to start VA loan on the first duplex with tax free money made in Afghanistan on a deployment, didn't put money down that was for an inspector and motel cost waiting for closing. And still bought stocks and index funds every month since 1992. Sometimes you have to form that snowball before you climb to the top of the hill. All maintenance done by me or a team that I assembled over the years. Lastly start a management company and add all houses into different LLC's to separate for protection. Also manage other people's property at 10% and hire a manager to run it if you have a full time job. And let the portfolio create cash flow while I pay nothing on my main house and work full time. The first few years matter.
@@charlottaw599 legally and technically they do not own the house they own a lien on the house. Still buying is always better always unless you cannot afford to buy and most buy more than they can afford because they are not smart with money anyway.
@@maryleachmanbeautyconsultant I believe they can if you don't pay property tax, insurance, etc. You're never truly done as in absolute zero payments for life.
I built a home in 2023, selling it 2025 to go back to renting. I’d prefer to rent. Single woman, my child is an adult. I don’t need this whole house, what a waste.
And another thing to think about is, if your money is in the bank and we have a depression you’re gonna lose all your money. At least it’s something tangible. Let me know your thoughts thank you.
I didn’t say recession I meant depression like the 1930s the banks closed? do you think it could happen again? There’s so many homeless i’ve never before many companies laying off GMC Intel how many stores closing? It’ll be like a great reset so they can insert their one world order… one monetary system when the dollar collapses … look at the world, economic form Klouse Schwab, saying that we own nothing and be happy.
Very interesting, surprising to look at my area and come to the same conclusion. Maybe waiting isn’t that bad of an idea after all. At least till the math works in my market.
for the last 5 years, the rent increase from 1400 to 2500 in my area. th price of houses + 50%. The person who boutgh a house 10 years ago has about 170 000 dollars mortgage for 3.5%. For the home that cost 550 000. Can you guarantee that this will not happen again? NO way.
Thanks! You mentioned something at the end of your video that resonated with me. Something to the tune of owning and renting being more of a lifestyle choice. I needed to hear it as I prepare to move back to the U.S. later this year. Even though I can purchase a home comfortably, the lifestyle I envision isn't stable enough to purchase a home unless I think I can make a profit and I do not believe it is likely within a four year time period in southwest Texas.
Totally agree-shares have outperformed property over the last 100 years. I’ve even built mathematical model to back this up. It’s interesting how mainstream media has been pushing property investment for decades.
That's very true. I just pulled out of the market after realizing that if I get a 300k loan today, in 30yrs I would have paid a total amount of over 450k in just interest, which is more than the loan I get.
How does a 1.5 million dollar property owner get away with just renting it for 5800? This must be a property that's been paid off and the owner is comfortable with making a very modest return, or it's not paid off and the owner is comfortable with splitting the payment with the tenant as a charity. I guess it makes more sense that it's paid off but at about 6,000 a month, it would take 20 years and start profiting off rent. Then again you have to consider rent increases which will lower that amount of time what you also have to consider repairs/insurance, and all the things that come with owning.
Because the person renting the house is also counting on the appreciation of the home. In the video, he uses an annual home value appreciation number of 1.5% per year. They expect the house to appreciate in value at a much higher rate and are using the rent more to maintain the asset (taxes, maintenance, insurance)
Just for reference... theres a general consensus that in Mexico is cheaper in many ways, but here the mortgage interest rate generally starts at 10%, and its been that way for decades my dudes. You sweet northern childs of summer dont know what a high interest rate is. A personal loan at a bank has like 38% interest. A car loan has like 44%... like... the only way to get a better rate is if you are a business, and even so business loans start at around 22% (less if you are super close to your bank).
My parents bought a home in 1989 for $88,000 and sold it in 1999 for $89,000. You leave out how much rent increased in that time of renting or buying. If you buy a home today in 29 years your mortgage would have gone up $2000 a year due to property taxes. Renting cost would have gone up $4,000 extra a month by that 29th year. When we bought our home in 2014 was when everyone was afraid of a massive housing crash. The mortgage with escrow was $918 a month now it is $1020. Renting has gone from $1200 to now $1850 for renting the same home. And just because you own a home doesn’t mean you can’t invest also. Simple reality 70% of renters have no investments not even retirement.
I rent and been renting all my life. What I like with renting is that I treat it like a rental car. I turn up the heat to 82 in the winter time and keep the AC set at 65 degrees in the summer time. I dont really care if the HVAC unit runs all day because if it burns up they just replace it. I also like taking long hot showers now that its winter time. I spend like 30 minutes with the hot water running. Its fun and sometimes I let loose in the shower. I also love that when I go on vacation for weeks at a time its much less stress vs. owning a home.
Yup! Everything is meant to be USED anyway. Money is meant to be spent. I rather rent than own as well. Owning is too expensive and comes with too much responsibility.
I love my tenant. He always pays the rent on time which enables me to pay the bank on time. In three years the mortgage on that rental property will be fully paid off by my tenant. Win Win for both since you say renting is better
Renting is better i paid 850 a month invest 4,500 now calculate the numbers on that. Thank You! And make sure that person stays there for 3 more years nothing is guaranteed. O and make sure once is paid off you keep paying the taxes or the government will take it as well. 😊
Renting = 😇 Buying = 🤬 My associate in Florida bought an unfinished house a month or two ago, and I told her it was a bad idea when she told me about it last week. She just laughed....😔Well, I tried.
Thanks for this video, for me i am newly divocee but got to keep the house under my name after a Refi of course that put the Interest higher than i was paying before. After looking at my situation, i will be a a cross roads on weather or not to either keep going in this home and have to take out a HeLoan or HELOC or just out right and sell cos things are starting to break down now after being in my home for the past 6 years. I make enough money to afford both rent and mortgage but its those extra, extra annoying things that need to be taken care of that makes me spend more than i would have been just renting. Buying this current house made sense when i had all my kids and wifie still living in the house, now its just me and my lonely kitten.
This is ridiculous even with maintenance everyone knows it's a smarter investment to be paying on a mortgage vs. rental. Give it another decade or two, starter home prices will be $1million
Ramit talks about this all the time...people never want to talk about opportunity cost. They don't want to feel like they wasted their money even though they are.
Sure you can buy a home, but when you finally pay off your home, if something happens and you can't pay your TAXES, the government will TAKE your home that you have paid on for years, even if you only owe a dollar!!!
Stop buying a single family house. Buy 2 multi at least before buying a single family home. Buy a 3 family and live in one of the unit rent free. If you think renting is better, you’re just contributing to my wealth building
who paid you? renting is not cheaper than owning the landlord adds the taxes fees and maintenance to the rent unless they are stupid. and you build equipty even if the house prices stay the same. Also when your done paying you own for life so you only pay taxes for life which is almost always cheaper per month than rent. Who pays these people to spread lies?
Is not lie I paid 850 a month for rent invest 4,500 per month what you talking about. I had a house before had it for 3 years sold it when I look at the numbers. You do you just do the numbers.
No they don't. The maximum rent they can charge is capped based on market prices and local laws. Everybody would be adding 100% on top of their costs otherwise. The play is to buy cheap hoping it appreciates enough that you can charge a hefty difference from your fixed costs
I am a military officer that always rented for half the cost of what my expected mortgage would be and invested the rest into ETFs. Now, 20 years later, I am about to retire at 44 with a 7 figure net worth and military pension.
Good sh*t! Moved smarter not harder!
If you rent, you owe the landlord. If you buy, you owe the bank. There has always been a negative stigma around renting. I am 65 and have plenty of money to buy into a mortgage…but prefer not to. My life is much simpler and I invest into savings vs paying mortgage interest. My choice and I have zero debt. I am in a better position than most people my age that are trying to downsize and reduce debt. No worries and I can come & go as I please!
If the gov’t can take the house if you don’t pay property taxes do you really own it?
You never own a house in USA period.
💯
If you rent, you will be evicted if you don't pay the landlord. What is the difference?
@ apartments never said we would own our unit. They claim that we will own our homes after paying it off but that really isn’t true. You never really own it.
@@Tchild2easily just rent another house. 1st and last months rent to get a new place as the worst case scenario. There is way less at stake actually
At this point I feel like it's just hard to have a roof over your head.
The video left off a few key points
1. You're getting a 5.5% return on $250k (value of home) annually vs 10% return on $50k
2. Plus with a mortgage, you are paying down the debt
3. If youre going to count mortgage payments against your profits, you have to subtract rent payments as well.
4. The down payment was $20k in this example but they subtracted 50k from profits. Also, you can use first time home buyer option and put down less.
5. I think the key is finding a home thats not sooo much more expensive that you cant save. Also, avoid huge down payments because that will take away from oportunity costs.
Live in van be perfect if it wasnt for the lucifer scum pig police saying you can park anyware (cars have more rights than fken people 2024) but you can't sleep in it!
I rent an apartment in Texas, currently $942/month ($11,304/yr), rent goes up every year but so does property taxes and maintenance fees for condo's. I could buy a similar condo for $149,000 which has a $691/mo maintenance fee, $3,900 property taxes plus I would lose $7599 of interest on the $149,000 that I use to buy the condo. So cost to own a condo is $19,791 vs $11,304 to rent. Renting is cheaper because I can increase my savings by $8487 a year. Rent will go up each year but so does maintenance fees & property taxes. Yes property will rise in market value most years but $8487/yr invested @ 5% interest will become over $563K over 30 years.
I totally agree. I'm a Landlord and it's way smarter to rent
Very smart! A great argument.
@@robocop581yeah cause your the landlord you want people to rent 😂😂
Love that you ran the REAL numbers. Buying can be wonderful UNTIL it isn't. If the time comes when you want/need to sell, that is when things can be sticky. Someone has to WANT to buy YOUR house and all that comes with it.
@@robocop581 i can see landlords wanting more people to rent.... imagine if everybody was a landlord .... bad balance ratio of more landlords vs tenants
No one owns anything even if you pay of the house, federal govt still owns the land
Property taxes 🫣
💯
People in NYC rent forever and never worry about owning. I have a friend living in Brooklyn that pays $900 per month. If he bought a house right now he would be paying somewhere around 4k per month.
Well that’s one lucky ass friend. I live in Brooklyn on kings and it’s shit for a college student like me. Renting is so high just from on bedroom ranging from 1800 if you want a pet rat and a run down place that’s never weather proof (be heater leak or no ac in sight) to 2300 just for an apartment. So me personally i would rather buy risk the cost compared to the new upcoming rent increase. We having implemented the landlord paying broker fee and once that hits I’ll be trapped living with my mom until i graduate and hope for a good ass income.
I been renting most of my life for 30 yrs and now it’s unaffordable to own house. I can only afford condo now. My brother brought house 25 yrs ago for same price of studio condo and now worth more than 1M if he sell it. I moved few times cuz landlord raise the rent. I think it’s still better to own than rent in long run. I have better esteem of ownership and freedom from landlord.
Thats if someone will buy it. Also keep in mind the fees etc that come with the sell and he would still have to buy another house (if he wants one) which also comes with fees etc. Also factor in the money he spent over the years maintaining it. Really breaks even if that in the long run. Ownership still comes with its cons too. I know how you feel though.
Buying is better. The thing is the house where you live is bot an investment. So maybe thr ideal is to go for cheaper than you think you can afford. And then consider an investment if you actually can buy to let.
I was just doing the math on this in my personal life . Homes are now like 450k in Atlanta with 7% interest. That’s over $1,500 a month in interest alone . We aren’t even talking about the increase in property tax and insurance and more . I don’t see why I would buy .. the money u pay for interest on the loan is like renting 2 homes at once
when i bought a new home and had no kids and no repairs and had grants to buy it, it broke even. when i got an older house, had kids and had lots of repairs every year, it was around 8k in repairs per year, it was a nightmare, with a house you also do a lot of making it yours and yard work alone can be extremely expensive. other thing i realized that if you don’t pay taxes they will sell the house to cover the cost of taxes, so it is an illusion that kept me house poor.
Love this video! I bought a house in my 20s and sold for a profit, but I put soooo much into it in maintenance. I would have been better off investing my money, and had my weekends back that I spent painting and sanding and stuff.
Property taxes dissuade me.
Why do we pay rent for land we buy to the state government that doesn't own it?
In todays system buying still means renting. Only way you own something is if you dont get it taken away from a outside source for not paying a imaginary # made by said outside source.
What i find funny you don't really own the house if you stop paying on the taxes they can take it lol
You will be evicted if you don't pay the rent.
This does not take into account the tax side of things capital gains on s&p will be 15-23% at least vs for 1st time home owners you don’t pay taxes on like 250-500k of gains so it is a big deal
Would you recommend renting, investing the difference and then buying either with a huge down payment or even cash?
So many are focused on making money, instead of just finding an affordable place to live.
Taxes, insurance, and repairs are the bills that never go away, and also the bills that increase. People also dig themselves into more debt, using their home as an ATM.
Thomas is correct, home buyers like to ignore the opportunity cost , which is huge ! Opportunity cost gives renting ALWAYS the better financial outcome over buying, unless the stock market collapses, but than your house value will too!
Sometimes it's better to buy a house, sometimes, it's not. But, investing in housing? Good luck with that. If you buy houses for renting? There are good tenants, and bad tenants. So, sad stories waiting somewhere down the road. And, deteriorating occurrs with time. And, believe it or not? Sometimes, a whole town, city becomes ghost area for some reasons. So, invest in something else, leave the housing market alone, and let the houses you will not live in to take care of those who will need a roof on their heads.
Buying a house is forced Savings. Most renters dont invest what the would be forced to pay on a mortgage and most gets wasted. Cheers thanks for the differing point of view
I’m one of the renters that do is call discipline. I rent 850 per month invest 4,500 per month wife and I. I own before sold 3 years later when I did the numbers. Best decision I ever made. And I agree with you a lot of people do it also for force saving just like getting a car payment. That’s what you call weak minded people. I’m not here to impress anyone I love money and I’ll continue to invest hard to retired on my 40s but that’s me.
If you can't invest and save you shouldn't be getting into a mortgage.
4:35 Am i missing something here? You don't take into account the rent that you continue to pay while you invest in the index. Yes the equity value of the house might be lower than the equity value from the index but what about the annual payments from rent?
Also in the first scenario you sell the house and you pay tax but in the second scenario you don't sell and don't take into account capital taxes
Here in Texas. I had to buy a house since the mortgage and rent were about the same. A house got me a 2 car garage, 3 bedroom, 2 bath. The same cost for an apartment only got me a one bedroom. Now this was back in 2018. My house was $250,000. Now it’s worth $370,000. And my mortgage only went up a couple hundred dollars due to taxes. Now that same apartment more than doubled what my mortgage currently is. I can sell my house now and get a nice check out of it.
Anyone who bought a property before 2022 is definitely ahead by now in 99% of cases. The only people getting screwed are new buyers that got into the market after 2022
S&P500 doubled in the same period. That is the point of the guy in the video, in the long shares outperform property. Unless you get an insanely low loan interest rate.
@@diyinvesting4Uno it didn’t
@@raymondwebby2441 S&P500 2018: 2700, 2024: 5700, that is 2x my friend.
Before and after 2018 are two different situations . Dumb example
It's one of the best videos on the housing market!
Yes, because most information out there entices people to buy and keep the system moving, while the rich just buy shares.
An issue folks in my country are facing right now is low stock of rentals. Specifically pet friendly properties. For example, in my area there are 300 units for sale and 15 units to rent. The bond repayments are around 30% more expensive than the rent would be. Unfortunately, the rental properties SUCK. Dark, worn spaces located in the less favorable areas. The buy vs rent argument is quite complex. I prefer renting but, feel like there just aren't any suitable rentals. It's quite the conundrum.
I didn't plan this but here's how i got to my dream house. Bought a duplex. Lived upstairs rented the lower floor moved out 1yr later bought a second house duplex pays the fixed rate mortgage on both. 3rd property built new. Rented that house out brand new to a renter. Never lived in it not one day. Repeat as often as I dared. Always leveraging a mortgage with a renter. Out of pocket cost $1100 to start VA loan on the first duplex with tax free money made in Afghanistan on a deployment, didn't put money down that was for an inspector and motel cost waiting for closing. And still bought stocks and index funds every month since 1992. Sometimes you have to form that snowball before you climb to the top of the hill. All maintenance done by me or a team that I assembled over the years. Lastly start a management company and add all houses into different LLC's to separate for protection. Also manage other people's property at 10% and hire a manager to run it if you have a full time job. And let the portfolio create cash flow while I pay nothing on my main house and work full time. The first few years matter.
This is really the only way that home ownership is really beneficial; if it’s a cash flow situation.
Owning is usually better. Don’t buy such an expensive house. I want to be the owner. I don’t want to be at the mercy of a landlord or corporation
The bank still owns the home until you pay the loan off.
@@charlottaw599 legally and technically they do not own the house they own a lien on the house. Still buying is always better always unless you cannot afford to buy and most buy more than they can afford because they are not smart with money anyway.
@BasedDevilBuy a house. Unless you want to be complaining in 20 years when they’re 3x the price.
@BasedDevil if you own your own home free and clear, no one can kick you out of it.
@@maryleachmanbeautyconsultant I believe they can if you don't pay property tax, insurance, etc. You're never truly done as in absolute zero payments for life.
I built a home in 2023, selling it 2025 to go back to renting. I’d prefer to rent. Single woman, my child is an adult. I don’t need this whole house, what a waste.
2:39 THIs ... also capital gains tax, when you sell house
I was going to write the same thing
And another thing to think about is, if your money is in the bank and we have a depression you’re gonna lose all your money. At least it’s something tangible. Let me know your thoughts thank you.
In the long term, typically 30 yrs mortgage, even with a recession or two S&P500 always outperform the property market. Even houses went down in 2008.
I didn’t say recession I meant depression like the 1930s the banks closed? do you think it could happen again? There’s so many homeless i’ve never before
many companies laying off GMC Intel how many stores closing? It’ll be like a great reset so they can insert their one world order… one monetary system
when the dollar collapses … look at the world, economic form Klouse Schwab, saying that we own nothing and be happy.
What about the rising costs of rent?
Very interesting, surprising to look at my area and come to the same conclusion. Maybe waiting isn’t that bad of an idea after all. At least till the math works in my market.
Yuo bought it at a wrong time interest and home prices are high we all learned from financial mistakes yuo are young it’s ok it’s nice home
for the last 5 years, the rent increase from 1400 to 2500 in my area. th price of houses + 50%. The person who boutgh a house 10 years ago has about 170 000 dollars mortgage for 3.5%. For the home that cost 550 000.
Can you guarantee that this will not happen again? NO way.
Thanks! You mentioned something at the end of your video that resonated with me. Something to the tune of owning and renting being more of a lifestyle choice. I needed to hear it as I prepare to move back to the U.S. later this year. Even though I can purchase a home comfortably, the lifestyle I envision isn't stable enough to purchase a home unless I think I can make a profit and I do not believe it is likely within a four year time period in southwest Texas.
Totally agree-shares have outperformed property over the last 100 years. I’ve even built mathematical model to back this up. It’s interesting how mainstream media has been pushing property investment for decades.
That's very true. I just pulled out of the market after realizing that if I get a 300k loan today, in 30yrs I would have paid a total amount of over 450k in just interest, which is more than the loan I get.
Great breakdown . Thanks
How does a 1.5 million dollar property owner get away with just renting it for 5800? This must be a property that's been paid off and the owner is comfortable with making a very modest return, or it's not paid off and the owner is comfortable with splitting the payment with the tenant as a charity.
I guess it makes more sense that it's paid off but at about 6,000 a month, it would take 20 years and start profiting off rent. Then again you have to consider rent increases which will lower that amount of time what you also have to consider repairs/insurance, and all the things that come with owning.
Because the person renting the house is also counting on the appreciation of the home. In the video, he uses an annual home value appreciation number of 1.5% per year. They expect the house to appreciate in value at a much higher rate and are using the rent more to maintain the asset (taxes, maintenance, insurance)
Where i live at, your credit has to be a certain number. If not, you cant buy a home no matter how much money you got the bank 🤷
There's always buying for cash.
I thoroughly enjoyed your video. Thanks for being honest about your experience with homeownership.
where did you get the charts showing the better the rent map?
Just for reference... theres a general consensus that in Mexico is cheaper in many ways, but here the mortgage interest rate generally starts at 10%, and its been that way for decades my dudes. You sweet northern childs of summer dont know what a high interest rate is. A personal loan at a bank has like 38% interest. A car loan has like 44%... like... the only way to get a better rate is if you are a business, and even so business loans start at around 22% (less if you are super close to your bank).
I feel u!
Im 52 I could have retire by now and could pay this condo out right cash in today value, had I invested in s and p 500 20 years ago
great videom, good production value. pleasant voice.
My parents bought a home in 1989 for $88,000 and sold it in 1999 for $89,000.
You leave out how much rent increased in that time of renting or buying. If you buy a home today in 29 years your mortgage would have gone up $2000 a year due to property taxes. Renting cost would have gone up $4,000 extra a month by that 29th year. When we bought our home in 2014 was when everyone was afraid of a massive housing crash. The mortgage with escrow was $918 a month now it is $1020. Renting has gone from $1200 to now $1850 for renting the same home. And just because you own a home doesn’t mean you can’t invest also. Simple reality 70% of renters have no investments not even retirement.
Cap, land tax, home owners insurance. Renting is cheaper overtime. Oh you might not even live 30 yrs to pay that shit off
Wrong. People with house don't invest too
@@itsbeyondme5560 more owners invest than renters
@@josefj1776
If you own it.
People can't pay 30 years of mortgage. And it's not flexible
@@itsbeyondme5560 40% of home owners have paid off their mortgage. Again you are wrong.
Now do a comparison of renting an apartment, you will save a ton more money.
Yeah, but market returns aren't constant. You need to buy when prices are low so insurance and taxes aren't inflated.
I rent and been renting all my life. What I like with renting is that I treat it like a rental car. I turn up the heat to 82 in the winter time and keep the AC set at 65 degrees in the summer time. I dont really care if the HVAC unit runs all day because if it burns up they just replace it. I also like taking long hot showers now that its winter time. I spend like 30 minutes with the hot water running. Its fun and sometimes I let loose in the shower. I also love that when I go on vacation for weeks at a time its much less stress vs. owning a home.
Yup! Everything is meant to be USED anyway. Money is meant to be spent. I rather rent than own as well. Owning is too expensive and comes with too much responsibility.
You saying all that but living in a house
I love my tenant. He always pays the rent on time which enables me to pay the bank on time. In three years the mortgage on that rental property will be fully paid off by my tenant. Win Win for both since you say renting is better
Renting is better i paid 850 a month invest 4,500 now calculate the numbers on that. Thank You! And make sure that person stays there for 3 more years nothing is guaranteed. O and make sure once is paid off you keep paying the taxes or the government will take it as well. 😊
What about buying out right?
Even worse. Imagine all that money making 11% return in the stock market vs perhaps 2-3% what the house value increases.
OK what if there’s a depression and our banks close and our money is worthless which it already is somewhat worthless
@@leenasandoval9994 not to worry about banks, the shares are not held in banks. When you buy S&P500 you own part of the best 500 companies in USA.
Not to worry. Shares are not held in banks. You are actually owner of actual companies.
Renting = 😇
Buying = 🤬
My associate in Florida bought an unfinished house a month or two ago, and I told her it was a bad idea when she told me about it last week. She just laughed....😔Well, I tried.
Thanks for this video, for me i am newly divocee but got to keep the house under my name after a Refi of course that put the Interest higher than i was paying before.
After looking at my situation, i will be a a cross roads on weather or not to either keep going in this home and have to take out a HeLoan or HELOC or just out right and sell cos things are starting to break down now after being in my home for the past 6 years.
I make enough money to afford both rent and mortgage but its those extra, extra annoying things that need to be taken care of that makes me spend more than i would have been just renting. Buying this current house made sense when i had all my kids and wifie still living in the house, now its just me and my lonely kitten.
I bought to save my kids from having a mortgage since i will be giving it to them after i died.
My dad bought a house in California for 500k and now it’s 800k, I told him to wait until it’s 1M , then he can sell and retire in Mexico 😂
The return on investment is way more than your estimate if you started in 1992. You'll be a millionaire by now.
This is ridiculous even with maintenance everyone knows it's a smarter investment to be paying on a mortgage vs. rental. Give it another decade or two, starter home prices will be $1million
I bought a home and do hvac lol I did all my own repairs labor of love lol sold it made some money and then some lol
interest was higher in the 1980s you all just got to used to cheap interest. I have rented and now I own, owning is better period the end
Homes were cheaper back then too. You could get a home with a minimum wage job.
Source: trust me bro
Wrong
Your parents sold in 2007… isn’t that the same year that property value crashed?
For the people who think owning is better, you guys dont know how to truly invest your money.
Ramit talks about this all the time...people never want to talk about opportunity cost. They don't want to feel like they wasted their money even though they are.
Sure you can buy a home, but when you finally pay off your home, if something happens and you can't pay your TAXES, the government will TAKE your home that you have paid on for years, even if you only owe a dollar!!!
That's Ramits thumbnail
Stop buying a single family house. Buy 2 multi at least before buying a single family home. Buy a 3 family and live in one of the unit rent free. If you think renting is better, you’re just contributing to my wealth building
You forgot about the capital gains tax you get when selling a home. Which you wouldn’t get with stocks.
who paid you? renting is not cheaper than owning the landlord adds the taxes fees and maintenance to the rent unless they are stupid. and you build equipty even if the house prices stay the same. Also when your done paying you own for life so you only pay taxes for life which is almost always cheaper per month than rent. Who pays these people to spread lies?
Is not lie I paid 850 a month for rent invest 4,500 per month what you talking about. I had a house before had it for 3 years sold it when I look at the numbers. You do you just do the numbers.
No they don't. The maximum rent they can charge is capped based on market prices and local laws. Everybody would be adding 100% on top of their costs otherwise. The play is to buy cheap hoping it appreciates enough that you can charge a hefty difference from your fixed costs
Dude you bought at the top in Toronto. Gtfo