Hi everyone. In many cases, buying a home can be smarter than renting. With that said, there are a few scenarios in which renting MAY be a more sensible option, especially in the short term. The goal of this channel is to make you think!

@RealLifeMoney

5 жыл бұрын

Nate O'Brien As many investments it really depends on your time horizon so I completely agree. Each scenario could be different 🤔

@NickCuttonaro

5 жыл бұрын

And you've succeeded at that goal!! Such a great video, Nate! 👏

@davislyric3027

3 жыл бұрын

You probably dont care but does someone know of a method to get back into an Instagram account? I was dumb forgot my login password. I would love any tricks you can offer me

@aldogannon763

3 жыл бұрын

@Davis Lyric Instablaster :)

@davislyric3027

3 жыл бұрын

@Aldo Gannon thanks for your reply. I got to the site on google and im waiting for the hacking stuff atm. Looks like it's gonna take a while so I will reply here later when my account password hopefully is recovered.

I think renting will always be better until you are 100% sure you want to live in a certain area long term, the house buying/selling process is just such a headache and expensive

I think buying a property is a great investment. In fact, even if you move to another city you can always rent your apartment to someone and create a new income source.

@freda2758

2 жыл бұрын

Mmmm...you mean "home" not "apartment," but 'yes,' you can always rent. If you decide to that, my best advice is rent through a realtor company and not on your own. It won't satisfy all of your headaches, but it will give you some peace of mind regarding collections and (if necessary) evictions.

@johngibs5356

Жыл бұрын

It’s only great if you renting it out if you live in it it’s a liability

As a real estate investor and mortgage associate I genuinely never understood the appeal of renting for anyone other than students or temporary workers... until I saw this video. I can now really understand why I am renting a property to people. This was great, thank you for the video.

I know it can sometimes be better to rent but emotionally it's nice to own your own place that you can do what you want with 🤷‍♂️👍

@NateOBrien

5 жыл бұрын

Your point is valid. Wanted to create this video to bring to light some of the reasons as to why and some rare situations renting may be an option

People often say “renting is just flushing your money down the toilet”, but they forget that for most people, owning a home isn’t like owning an asset, it’s more like owning a liability. Most people think they make money when the house appreciates, but obviously that’s only if you sell it. Great points Nate!

@NateOBrien

5 жыл бұрын

Thank you Tyler! As I mentioned in the video, over a long period of time owning a home can be a more sensible option, but I believe many people forget some of the points that I bring to light in the video. At the very least, it’s essential to understand the potential risks or downsides to both renting and owning homes

@superultramegamaga4021

5 жыл бұрын

bwaaaaa hahhahahhahhahahha.. renting gives you zero equity, and zero collateral... owning give you both.. plus a potential for passive income .. NEVER TAKE MONEY ADVICE FROM A MILLENIAL....NEVER

@TylerSherwin

5 жыл бұрын

@@NateOBrien Exactly. Comes down to opportunity cost, much like you said in the video. Thanks!) (From one millenial to another 😉)

@Jeevongo

5 жыл бұрын

@@superultramegamaga4021 Renting requires no down payment. Why spend $40k on a down payment for a house to live in when a rental property can actually make you money every month.

@superultramegamaga4021

5 жыл бұрын

@@Jeevongo first months rent, last months rent. and a security deposit.. .. on a 120,000 dollar house the down payment is 3-5% roughly 4-6,000 dollars down.. average rent for a 2bd is 1200 dollars =3600 dollars.. 400 dollars more is a down payment the mortgate on a 120,000 dollar home is roughly 600-700 dollars... renting is for the retarded and financially irresponsable...

I rent and for me it is perfect. I work out of my home what safes me money to. No gas expenses to get to work. I also like renting because I am not responsible for any of the property. Few years ago we got hit with sever hail. Windows and roofs, had to be replaced. Boy was I happy to rent! People are still fixing damage the hail did on their property and it has been 2 years since it happened. I also like the fact that I can move with more ease. A friend of mine had to move out of state. Before he could place his house for sale he had to spend money on fixing up the place. Sure this will not be everyone's case but for me that's to much hassle.

I can’t wrap my head around living in the same place for the rest of my life like some ppl do, I like changing my environment 😭🔥

@NateOBrien

5 жыл бұрын

Agreed. I can’t even stay in one place for more than a week

@porogami7yearsagoedited754

5 жыл бұрын

Wait... you change houses every week? 😄

@NateOBrien

5 жыл бұрын

Currently in Mexico, boarding a plane to panama as I type this comment. I’m a nomad

@Idkbkn

5 жыл бұрын

Nate O'Brien congrats on beating the rat race! I’m almost there !

@Michelle-pn9xt

4 жыл бұрын

@@porogami7yearsagoedited754 Obviously, he does not own a home.

Owning > Renting if you're going to live there long term

@NateOBrien

5 жыл бұрын

Agreed! This video is for the rare cases in which renting could be a more sensible option

@colagutten2

5 жыл бұрын

how long is long term?

@lithium81

5 жыл бұрын

False. It all depends on the economy of the country your living, risk vs investment. If proberty values goes up in a stable rate... sure, then invest your money and buy. Then fix all problems with the property, own it a few years and then sell it. BUT, if property values are decreasing and your country have financial problems slowly dragging economy down... Dont buy. On the other hand, if you already own property with 0 loans...you dont really have to care I guess ;)

@MindfreakCoD

4 жыл бұрын

@@NateOBrien But when you own a home, you can always rent it to others, therefore, the home you own is paying you the expenses while you can move around freely

@cellyszn20

4 жыл бұрын

Jørgen Børve I call long term a place you are happy to retire in.

Real estate taxes need to b considered also when buying a home. They can b a hefty expense depending on location especially after the home is paid off. I. E. Living in NJ & paying $12,000.00 to $20,000.00 yearly in RE taxes vs. living in Fl and paying $700.00 yearly in RE taxes. That s why older people flee high tax states like NY, NJ, & CA and retire in NV & Fl low tax states. Just think of all that $$ that is being paid to government officials to pick up your trash once a week that could otherwise b put into a ROTH or investing in another retirement vehicle. Thanks for the good info Nate.

@SlopChap

3 жыл бұрын

Tax break after 65

Very good advice. I'm 58. Owned a home and car. Took care of my mother. She passed at home. I took care of her. Went bankrupt, lost my 401(k). It was something I would do again. I rent now cause I'm older, upkeep is and can be consuming financially, especially when you're starting over

California is soo expensive... I bought a few years ago, and glad I did. I can't afford the monthly rent on my old, tiny, apartment

Also dealing with maintenance! Having a apartment, it’s the landlords job if something happens!

@NateOBrien

5 жыл бұрын

Yes maintenance costs can put a damper on your wallet!

@Nigtmaredemon

5 жыл бұрын

Nate O'Brien what if you hire a property management company?

@michellemarie1197

4 жыл бұрын

I rent......our landlord doesnt do that much, plus maintenance doesn't have to be a pain or expensive if you know what you're doing.

@scorpio7938

4 жыл бұрын

I owned and rented i feel renting is better my opinion

@rollzolo

3 жыл бұрын

Maybe renters can do their own repairs and lowers the rent with the landlord?

Still saving for that first down payment 😪❤️

@cherrytung

5 жыл бұрын

same boat

@kirinnguyen2074

5 жыл бұрын

me too! almost there!

@MegaMiir

5 жыл бұрын

Probably the hardest part. What do you do for cash flow? I eBay flip, cater for friends, side restaurant gig 10-20hrs week. Its hard bringing in cash as a student.

@Bonez1999

5 жыл бұрын

It's a shame... All that down payment money could be in the market earning you compounded returns instead of sitting in cash.

@chicnoir29

4 жыл бұрын

Cherry Tung - Finance & Fashion Are you planning on buying in California?

Given the current economic difficulties that the country is experiencing in 2023, how can we enhance our earnings during this period of adjustment? I cannot let my $680k savings vanish after putting in so much effort to accumulate them.

@user-3456rtu

Жыл бұрын

Well the bigger the risk, the bigger the reward and such impeccable decisions are better guided by professionals

@yfar567

Жыл бұрын

Yes true, I have been in touch with a financial advisor. With an initial starting reserve of $80k, my advisor chooses the entry and exit commands for my portfolio, which has grown to approximately $550k.

@MiikeFaber

Жыл бұрын

@@yfar567 I’ve been looking to switch to an advisor for a while now. Any help pointing me to who your advisor is?

@yfar567

Жыл бұрын

There are a lot of independent advisors you might look into. But i work with Nicole Desiree Simon and I have been working together for nearly four years, and she is excellent. You could proceed with her if she satisfies your discretion. I endorse her

Yep. You hit the nail on the head. The financial press has been saying this for 30 years. The difference between renting and owning is a wash. For example, if you take out a 30 year mortgage to buy a home for $400,000 today, it will be worth $500,000 at the end of the 30 years. Instead, if you rent at a much lower rate than mortgage payments AND YOU INVEST THE DIFFERENCE + THE OTHER ASSOCIATED COSTS OF OWNING A HOME into the stock market, you will have $500,000 at the end of 30 years. It seems hard to believe, because you donated so much to your landlords over the years. But this is the consensus among financial gurus. Of course, most people would not invest the difference. They would live a higher lifestyle "because they deserve it." But if you owned the home, you would be living at the lower standard. So it is people's psychology that comes into play for the old mantra, "It is always better to own than rent."

Hate thought being tied down for 30yrs in one place with mortgage+'hidden costs'. Prefer renting - flexibility to move.

Renting can definitely be better depending on life circumstances. Aside of the financial irrecoverable cost with owning a home, there is no price for the stress. All homeowners know the sleepless nights that come with home repairs. A new roof, water in the basement, plumbing problems, liability for sidewalks and trees, repairing appliances, etc.

You have some very valid points. I would also add that most of your house payments are interest starting out. I think you are smart in considering opportunity costs.

Grew up in a family home with a large garden. No one could appreciate it more than I do. However the effort, the time and the money to maintain it were truly never-ending. I hated weekends as a teenager because I knew I had to dust and vacuum the whole house. And my parents would come after work, eat quickly and then throw themselves at some of the many tasks that needed to be doing. I'll be renting or buying an apartment near some nice green park, thank you very much.

@freda2758

2 жыл бұрын

1. Hopefully, you're dusting and vacuuming your apartment, as these things still need to be done no matter where you live. 2. I'm betting your parents didn't see these things as a burden as much as a love for improving their home, much like we do when raising and caring for our children, Love. Wherever you are, be happy.

Bought my first condo at 20 and now going on to get my real estate license!!

@NateOBrien

5 жыл бұрын

Woot

@BrettMugford

5 жыл бұрын

Derek Wilson lots of hard work! Got promoted to management at my company at 19 as well as working a food delivery app on the side while being the cheapest person anybody has met!

What I find fascinating is that video has only 58K views (at the moment) I have watched almost all of your videos (great content btw.) and this topic is REALLY important. I would even dare to say the most important desition in one's life.

At 25, with no plans of having children and in love with travel. Renting is the best option for me right now.

@giancarloflores7316

4 жыл бұрын

at 28....same.

@missjungjeelee

3 жыл бұрын

33 turnin 34: SAME. Nomadic life is the best

@immanuelalmeida7039

3 жыл бұрын

atleast you are having fun..im really tired of making enough just to get me by lol cant wait for a promotion and start travelling and live the life im excited about..ive always wanted to be a WORLD CITIZEN

@JohnSmith-xq6cv

3 жыл бұрын

dying alone in a nursing home one day could suck!

When you rent, the landlord has to pay for maintenance and repairs, but then they raise the rent. In most cases the maintenance is fixed into your rent. A landlord can tell you to move out to sell their home.

I think me and my wife fall into this category. We rent from my mother, we pay £675 p/m for a property that should be around £900-950. Its very close to her place of work. Easy for me to commute from. So lots of plus points.

No, buying is the best option, I brought a home that I upgraded to his potential, shared it with other people I wasn't paying a penny and made a large profit after I paid my mortgage and bills, even managed with the extra cash to live in 2 different country renting a whole place just for myself, after I sold the place I made 3 times what I brought it for now I don't need to work much. A home is an asset. After you finish renting you never see that money again, I got every penny I put on my home back. My home helped me to have a better life I have zero debt and I have the freedom to decide to live where I want to live, buy what I want to buy and work for who I want to work. I also get a salary over 150k year, I love having my own home, renting is a waste of money.

If you have enough for a deposit, I don't see the point of putting money into someone else's pocket. Where I live, having a mortgage is cheaper than renting. I'm not sure why your parents spend so much on maintenance lol Plus not having to worry about paying rent when I'm retired will be a big relief!

Good work - I have owned my whole adult life so for about 20 years. I was free and clear on condo for a good decade which was awesome. I got married and we bought a house and I had not a lot of time between work and businesses and family and .......... house work. Yes house work is a wild card and can take a lot of time. You said it the un predictability of home repairs is awful and also I heard another guy mention the spend a ton of money on upgrades syndrome when you own and we were subject to that. We just started renting a few months back and I love it cause I don’t have to worry about the house and it provides flexibility to move if and when it’s needed. So far I love it

I completely disagree with this one. I do agree with many of your ideas, but not this one. Rent is a trap. Land you can work. It opens up freedom to make money or resources that you don’t have access to in a rental situation. Buying can offer rentals, farm rental, farming, home business and a long list of other financial opportunities. You can have tenants paying the mortgage and their portion of the bills for a turnover so there’s not a lot of out of pocket expenses. We rent to two tenants. One pays $600/mo the other $900/mo. The mortgage is $975/mo. I only pay about $275 in utilities, versus the $1,000 we paid in rent per month while renting. The best way to make money, is to spend someone else’s money. 😉

Yes, all very valid points. I have owned 4 properties and I have happily sold the lot and am renting for exactly all the reasons you mentioned. Your only responsibility when you rent is to not wreck the place. I am loving zero owner stress! You have approached this matter from an investment perspective. From a budgeting perspective you have not added in the savings in travelling expenses. You can rent closer to your workplace and save time, money and stress. I have loved renting in different areas I want to explore. I have been in 7 totally different homes, areas and its been so much more interesting than just living in the same house forever and half a day!

I know of someone who bought a house, invested time and money renovating it, and diligently paid the mortgage for 26 years. Sadly, illness struck, leading to the loss of their home. The devastating blow sent the homeowner into a deep depression, and within a year, they passed away. It's a heartbreaking reality that often goes unspoken; we're accustomed to hearing about "forever homes," but life's twists can sometimes shatter those dreams.

I used to be a renter for a long time and then moved to an area where buying was almost half the price per month compared to renting, so I bought my first house. The first year, I spent 10k in addition to my mortgage on landscaping and building a small patio. My electric and water bills went up like crazy too ($300 - 400 per month). I do like the privacy and no more landlords who used to pop in unannounced sometimes.

Please talk about Leverage. Using mainly the bank's money to purchase a home is something you can't duplicate investing the money you saved from renting into the stock market. For example, I put 10% down on my residence + 2.5% associated costs. After nine years my residence has appreciated by 136%. If I sell now, I can pay the bank off and get my initial deposit, transaction costs, property taxes and monthly mortgage payments in the past nine years back. What's left over is 23 years of free rent based on the current rental rate in my area. That 23 years of free rent that I gained would be significantly more than the initial 12.5% I put down and monthly mortgage payments in the past nine years (actually this is a wash as it offsets rent I would've paid if I didn't buy) into the stock market at avg 7% annual gain. That is because I used mainly the Bank's money (87.5% of the initial value of the property) to buy my residence. Will I sell my place? I can but no. With interest rates at 2.7% where I live, I'll refinance my residence instead and use the proceeds of that second loan to buy a rental property or invest in the stock market.

Good information. Thinking is key on what one should do with their money. If given a choice, buy a rental, and rent your own home.

@NateOBrien

5 жыл бұрын

Grant Cardone says this quite often!

II bought last year, my closing cost and down payment was around $40,000. In one year my house is worth $90,000 more than when I bought it. When you rent, you can’t claim your interest on taxes and get that extra few thousand back on your return

I'm a phase of my life where I feel too old to live at home, and can afford rent but nowhere near the right salary to buy a home alone in my city. I'm kind of sick of people telling me how much more worth it it is to buy - I don't want to live with my parents into my 30's, thanks. At best, I'd be living paycheck to paycheck to pay for my condo, even if renting out a room - I would be miserable!

@abhishektomar2082

5 жыл бұрын

Get a man

@Poptartsthatareplain101

4 жыл бұрын

Ana M why don’t you spend the next year saving as much as you can that way when you move into your own apartment you won’t have to worry so much about rent each month bcz you’ll have stared with that cushion you spent the year saving.

@mard9802

4 жыл бұрын

Is it possible for you to find a place that you can rent with the option to buy?

@AnaMerfu

4 жыл бұрын

@@Poptartsthatareplain101 your savings shouldn't go towards your regular living expenses, they will eventually be depleted. And a year wouldn't be enough, a mortgage for a small condo in my city is over 2-3k a month. I put my savings in investments while paying for a room.

@AnaMerfu

4 жыл бұрын

@@mard9802 that's pretty rare here as far as I know

It might depend on where you live but predominantly, you need a place to live in so if you pay your mortgage you’re effectively saving money as you can sell or rent out your property. If you rent, money is used and ends there. Where I live my old rent was = my current mortgage. Good idea I bought as I live now landlord pressure free where they want to run your life, constantly increase rent and possibly kick you out as they please.

Pretty good points here... still need to mention the property tax, high interest rates if not the 20% + downpayment is made and exorbitant maintenance fees if buying a condo ( at least in Canada)

another example i can think of is when you want to live in a city where the jobs are, which makes homes very expensive. Software engineering in SF bay area is very well paid but the home prices are crazy. if i were a software engineering in SF bay area, i would forego home buying by renting the cheapest place possible, throw the rest of the earnings into investments, and then move somewhere else to buy a home when i retire with returns from investment (following the 4% rule) . the main appeal of living in SF is the jobs, so when your retire, just go live somewhere way more affordable where you could easily buy a home

It depends on time horizon, even tho each can have their benefits. Like renting while saving up for that daunting down payment can be smart 😁

@NateOBrien

5 жыл бұрын

Both renting and buying have pros and cons, created this video in the hopes that it makes people think about their specific situation!

Here's one more. You can rent an apartment according to your circumstances, like a sharing a flat when single, a 2 or 3 bhk with partner and kids , move in with your parents if you're taking break from work. Even if you switch jobs in the same city, you can switch apartment to be closer to work.

I find it hilarious when people say renting is just throwing away money. For many people in their young 20's renting is still a great option (Factoring in costs associated with buying a house - could be a good video topic for you)

@NateOBrien

5 жыл бұрын

Yes it would be very interesting to break down the numbers. Over the long run it would most likely be smarter to buy but there are too many factors and different situations for there to be one right answer and one wrong answer

@TheOpinionSports

5 жыл бұрын

Brandon Beavis Investing yea but all that money you threw away on rent you can’t make money on that place you stay in if the home value price increases

What if you buy a home and just rent it out when you move?

@Effervescence

5 жыл бұрын

thats what you should do, you either sell (never tell your agent what you want to sell for just ask them to sell for the highest they can) or you rent. You nearly always from my experience want to rent out it is another stream of income and it takes little upkeep. you might only have to mow the lawn fix some pipes, general upkeep. you could even hire other people to do that as well

@lambo23guy

4 жыл бұрын

in most cases you can only do this if you own the home outright and don't have any loans. if you wanted to buy a house to rent out you would need a commercial loan which means you can't live there. The best way around this is to buy a house and put on airbnb

@stevend481

4 жыл бұрын

@@lambo23guy commercial loan is for mutli family over 4 units. But for a 1-4 unit, of course you can rent it out no problem

@betruetoyourself7162

4 жыл бұрын

lambo23guy you could live there for 2 years and not refinance. You would get the best homeowner Interest rate. If you refinance while not living there, you need to pay investor interest rate

💡 I need a sort of summary in this. I DEMAND clarity.

You must have practiced a lot of times for this video, as I can not see any visible cut.

I bought my first home shortly after college.. a condominium actually. Every time after that whenever I sold one home I took 100% of the money from that home and put it down on the next one. If I had been renting instead of buying I would have nothing but a bunch of rent receipts. Instead I have a nice respectable net worth. 🥰 You can never go wrong owning real estate!

Lovvvveeee! All of my projects were all approved for payment! Waaaaah!

Comes down to lifestyle and your return on money. If your rent is cheaper than what it would cost you owning a home and remember there's government rates and taxes you might have a to pay as an owner then rent BUT you need to be investing the rest of the money to get a better return then paying off your home; otherwise just buy a home and pay it off asap if you have no intention to invest. If you want to be mobile and not locked down to a home, which isn't for everyone then of course rent.

I agree there are so many variables when it comes to renting vs buying. But for my situation buying is definitely better in my opinion. The main reason is because houses where I live are significantly less expensive compared to many other areas. If you live in Nebraska and you can find a 3 bed 1 bath 1 or 2 car garage for 100k. The one caveat is the taxes and homeowners insurance are higher in Nebraska than other areas. That being said, my total mortgage is only $750 per month. If I rented it would range from $600-$850 per month. I’d say, for me personally, the better decision is buying and paying a $750 mortgage while gaining equity and home appreciation instead of renting for $600-$850 with increasing annual rents. The only downside is the maintenance, but, think everything else I mentioned makes up for it. Great video as always! 👍

renting is better if your unsure about your income or job or just want a piece of mind.

Where I live, monthly rent is far cheaper than what my mortgage would be on an equivalent place (I need a detached house because I play music as part of my work and don't want to disturb neighbours!). Only when I can afford a down payment large enough to bring the mortgage payment down to the same as rent, on an equivalent house, will I think about buying. Even then, it might be wiser to invest that down payment in something else. The housing market is, frankly, an inflated mess today in the UK. Yet rent is about the same it was 10 years ago (outside London of course!)

Buy in the high rental area of the city, put it up for rent , then work for a company that pays for your accommodation or rent a cheaper apartment/house.

@giulias.5104

4 жыл бұрын

Yes, if you like to suffer...

Also I’m not 100% sure but I think even after you pay off your house, you still have to pay property tax?

I'm at a point in my life that I don't need to own a house to prove my financial success. :) I value my freedom, flexibility and time now. I can't be tied down by a mortgage or by maintenance/repairs. Been there, done that.

im a singlemom and renting with my son, Im prioritizing our needs for everyday living , also I dont wanna give problems for my son by getting mortgage

Im a singlemom and we are renting, I am thinking if I am going to purchase a house

It's just personal preference man, the numbers depend on a million of uncontrolable factors. you're young you want to travel you want freedom you rent. After a few years you find a nice girl you want to create a home you buy. Kinda simple.

I always thought renting was the best option short term, long term, whatever. Now that you've gone over both options I see the situation in a different way and can rethink my options.

6:55 you are wrong on predictability. Try living in Seattle where the rent doubled in less than 5 years. Maybe that doesn't happen everywhere but if you live in a hot real estate market then it pays to lock-in your mortgage payment forever.

@mard9802

4 жыл бұрын

Toronto > same thing happened

You know am currently confused about this I better stay put to see if I will get a good outcome with this new trader Mr Aryan

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5 жыл бұрын

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5 жыл бұрын

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5 жыл бұрын

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5 жыл бұрын

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@imogenpuddy782

5 жыл бұрын

Thank you so much Sam Aryan for the payout today

I never even considered buying a house until after I was renting for about 20 years and during that 20 years my rent was definitely less than buying a house. Now that I've owned multiple houses and I have moved over 70 times in my life. My current home I purchased for $15, 500. Not most people spend more than that young a year for rent and it's probably much smaller. My home is approximately 1300 square feet 3 bedroom 2 bath.

For many people owning a home is the first foundation of building wealth in America. I don’t care what people say about why it’s better to rent because in the end you’ll own nothing. It’s all circumstantial but if you’re renting for 30 years and don’t own at least one property I don’t think that’s a wise decision.

@deanalbertson2050

4 жыл бұрын

Renting may be better if you plan on moving every year, or if you don't like to mow the grass every week. Some people, as they work their way up the corporate ladder, need to move often. The hassle of buying and selling a house every few months may not be worth it.

I can totally see the effect of doing this with a house. This now raises the question for me what are the things that could be better off rented like potentially a car or things like that.

I lived in Minneapolis where I rented in 2020. When the riots started, the politicians defunded police, and crime skyrocketed... it was nice to turn in my notice and escape the Hellhole in a few weeks. Free and clear...

There should be an algorithm in a computer that allows you to calculate your financial advantage. It should go through a lengthy question and answer portion and then show you your financial advantage either way. Renting is supposed to allow you to call the landlord and have him fix whatever goes wrong, but that doesn’t work. You often must take the landlord to court to force him to fix the washer or the dryer. It costs you $350 to Sue your landlord to fix the washer, and the actual cost of fixing the washer is $250. You could take out a home equity loan, at say, 5.25%, and use that money to invest in rather secure stocks yielding 7.35%. However you need to pay income tax on the dividends, and capitol gains taxes on the gains.

Yep, renting for possibility of mobility and monthly expenses are similar. In SoCal and staying here for good school district for my kids. Family homes around $1 million+ here. Then property tax is about $10000 per year. Renting for just a couple hundred more dollars per month than I was previously paying on monthly mortgage and as a renter I don’t pay for property tax, water bills, repairs or gardeners.

I agree Nate. Or just build your own house ground up in Rocky Point Mexico.. and air bnb it

I really liked your reasoning, I always used to think buying is better but it make sense now why renting could be easiest for some. Thanks

Hello, If you like this idea, I would really appreciate your opinion on buying an apartment for rent. I have the idea that if I buy an apartment with a high rent demand, it would basically pay for itself.

I think it's about security too. It's yours you can do what you like with it. Stating the obvious, but yes home ownership everytime. Great Channel! 👍 🇺🇸 🇬🇧

One thing that really strikes me is when someone has been in a home for like 15+ years and their mortgage + property tax payment is significantly less than what the going rate for renting is.

Investment property. I would have to disagree with you. Long term, buying a home is better

@lg187788

5 жыл бұрын

@Jee Vang where does it say that I only assume it goes up? Please open your eyes and read carefully.

@ianbarrett4166

4 жыл бұрын

Renting is also wasting money living on the streets is better no outgoings and all that money you would save and could invest

Currently renting an apartment for less than €700 per month (75m²). If I had to buy a similar place I'd pay €1000 per month for the loan. On top of that, I don't have to worry about maintenance costs.

I bought my place during a buyers market, so it was cheap. I don't ever plan to sell, so will never reap the appreciation. But i am continuously paying much below market. It's still about 50% cheaper than renting. That's the only reason to buy. Ownership is a liability until you sell.

I will watch again this video the next year when I will move 💪

@NateOBrien

5 жыл бұрын

Mark it on your calendar!

Personally I wish I didn’t listen to option like this when I was young. It would have been making my financial situation much better now.

😂😂.. no.. your first home should always be a duplex.. you own it, you charge double the mortgage as rent for the other side. house pays for it self.. take out a personal loan for half the value of the duplex, using the duplex as collateral, use that money plus the rent from the duplex to buy another smaller house. and rent it out for double the mortgage.. ... or..dont buy another home and use the other half of the double mortgage from the dublex to pay on the loan capitol. and your home loan is payed off in half the time..with half the interest..

@superultramegamaga4021

5 жыл бұрын

@Jee Vang mortgage for a 120,000 duplex roughly is 400ish charge 800. which is still less than standard rent... . the first one i bought i charged 1200 per side. due to good school districts and close prox to hospitals..

Time IN the market vs timing the market! 2008 was the only recession in history where home values didn’t recover within 12 months.

Cheapest house I can find in my area, that wasn't foreclosed, was a 2br for 74k. A 2br apartment would run you about 850 a month in my area. The house at 20% down is 14800, plus say 2% in transfer tax and 500 for appraisal comes to $16,780 total, with a 4.16% apr, 2% real estate tax and 35 for insurance, it is $446 per month for a 30 year plan. If you invested 16,780 instead and were magically getting 10% apr returns (0.83% per month), while paying 850 per month for rent, you would need to liquidate 404 per month to equalize the cost difference from renting to buying. In 4.3 years, you will be out of money. You will be paying nearly twice as much for rent over buying, have no asset, nothing will be reported to your credit, and nothing to show for it. More than likely, you don't even have 16,780 to start with, and is the real reason that you need to rent over buying. You will be gaining no interest off of no money, but at least you'll have a roof over your head. Now, taking into account that you might have the 850 in both scenarios, starting with 16780 as before. Buying the house clears the account but gives you 404 per month extra to put into the savings, while renting allows you to start with the 16780 in savings and put 0 per month in. At 10% on both situations, the purchaser will surpass the renter in savings in the 4.3 years with $26,160 versus $25,834. As for "other costs" to maintain, mowing the grass, power washing the side of the house, roofing every 20 years or so is negated by the fact that you have to pay renters insurance, deal with noisy neighbors, stealing parking spots, etc. And when it comes to "being underwater," this can be negated by renting out the unit instead of selling the property. You can easily rent the house for above apartment rates (around 1,000 in my area for a 2br home rent), put 40% of it in a maintenance fund gaining interest, and use the rest to buy another home at the now cheaper rate because of a market crash. Buying > Renting The ONLY time renting is a priority is when you are unable to buy or you move around less than 2 year spans....but buy is always the better option when you can. Although it's even debatable on the 2 year span thing.

@exgamer07

5 жыл бұрын

Of course, if your mortgage payment is half that of rent mortgage would be the better option. The same is true for the reverse. That is rent half the payment of mortgage payment.

@sabriath

5 жыл бұрын

@@exgamer07 .... rent is always higher than mortgage, unless you plan on buying a mansion in comparison to a dingy apartment that's about to be foreclosed on. The reasoning is that there are far more people who have bad credit in this country and are unable to get a loan for a home, or they can't afford the 20% down payment outside the FHA program....this causes a huge demand for renting, which drives the price up. Even if we magically have a situation where you have a $600 rent versus a $1200 mortgage (248,000 home at 4.1%), and you invest $600 at 5%, it would take 20 years before you surpassed the costs of the house in total savings (15 years to pass premium valuation). So even a hypothetical in your favor still takes forever to equalize. 4 years in one direction, 15 in the other.....but sure, rent is better than buying in the one case where our world is upside down.

@exgamer07

5 жыл бұрын

Robert Caldwell It depends where you live. There are plenty of places where rent is 600 per month. These places are just not in areas like LA and NY. There is also opportunity cost. Investing the difference between a cheaper rent payment and a mortgage payment into the s&p index gets you an average annual return of 12 percent versus a typical dwelling returning 2 percent. Unforeseen costs is another factor. Repair costs can be high one year while low the next. Property taxes are also out of the control of the homeowner. Conversely a REIT investment in a Roth IRA would be shielded from taxation as long as you hold off until 59.5 years of age. People choose to avoid mortgaging due to bad credit or low savings, but this does not mean people with bad credit or low savings cannot get a mortgage. There are mortgages for riskier borrowers, and PMI and FHA loans eliminate the need for a high savings for down payment. The typical home buyer only puts down 6 percent. A better reason why many rent is convenience. Someone else worries about managing their dwelling while they can do other things. People in western society is willing to pay at a premium for convenience, and this is not excluded to real estate. Finally, upside down mortgage situations change things too. This is when one has balances on mortgages or loans on their property exceeding the value of their home. This is a situation of negative equity. A renter is not using dwelling expenses to acquire equity, but they are not necessarily getting negative equity either.

@sabriath

5 жыл бұрын

​@@exgamer07 .... the numbers I state are comparison for area, obviously a $600 rent in a low income area compared to a $1200 mortgage in a high income area is not always feasible for average population, as they tend to be more than 25 miles difference and places too much strain on work choices. A lot of people are locked into an area based on schooling for their children as well and they don't want to uproot them, so I tend to compare based on area mapping....and in all cases that I have seen, renting is more than a mortgage, room for room. Meaning, houses in high end areas which would yield higher mortgage also have higher rent apartments. Unless you plan to rent in section housing, but then you would have to be approved and deal with higher threat of robbery. The S&P's past performance does not dictate future results....the average of the past 10 years is a little over 10%, but I was going off of twice the GDP rate as a forward nominal. This number is also twice the rate of CDs, and conservative with risk. Yes, you can possibly make a lot more (I made 30% last year), but it's not guaranteed every year, and the risks go up the higher your yield is. I USUALLY use 5% as the benchmark, but I haphazardly used 10% in the original post and neglected to remember it when I replied. Using the 10% in the second scenario, it would be 15 years instead of 20 years, and 12.5 years instead of 15 for premium.....that's still 12.5 years. Maintenance does play a part when owning a home, but apartments also have problems, like flooding from not only your unit but neighboring units....people who might smoke in their apartment has the possibility of wafting in and through the walls of yours, noisy neighbors up against your walls.....animals, etc. You may get something from your renter's insurance, but it doesn't make you whole, the things that get damaged might have sentiment. Having a home, YOU are the only one really responsible for the damages, so it's not like you have to fear your neighbor burning down your home because he can't cook his bacon correctly in the morning (this happened). Also, the costs of maintenance on a home is about $500 to $1,000 per year on average (modern home, although this cost can go way down if you learn basic carpentry)....which is only $42 to $84 per month. This includes replacing the roof every 20 years, powerwashing the siding, lawncare, fixing pipes, etc. It's not much, it's probably the dollar difference in renting versus buying anyway....but at least you'll have an asset in 15 to 30 years. As for your mortgage becoming upside down, and? Just like the stock market, stocks go up and down....just because your home goes down for a couple years doesn't mean it will stay there. The ONLY reason we had a crash in the real estate market is because of greed and an unchecked underwriting process.....these have been regulated now, and hopefully we won't see these things again without a natural deflation occurrence (which means if your house falls in value, the overall economy should fall as well, making everything cheaper equally). The only other way your house will go down in value is if YOU destroy the value of the home OR your neighborhood goes to shit.....just like picking the right stock, don't pick a stupid location. You may have to pay back more than the value of the home if this happens, but that's not necessarily a bad thing forever. If you buy stock at $10 and it drops to $5, do you get rid of it because it no longer has value? Just because you have to pay your loan back, doesn't negate the fact that you entered the deal with a known starting figure of the investment....it just happened to fall.....you do what any sane investor does and hold. Absolutely nothing gives you as much pride than owning your first home and keeping it tidy, and for me, a well-groomed yard, also. Dollar for dollar, if you can mortgage equal to or better than rent, then buy is the only option you should give yourself, thank me later.

@exgamer07

5 жыл бұрын

Robert Caldwell What gives one pride is subjective. While owning(mortgaging a home) may provide the most pride others may find more pride in owing a business or a basket of business. There are more ways than just destroying the home to experience depreciation. Like all commodities, simple over supply or production of homes can cause depreciation. In addition, failure to maintain the property, increased crime, or reduced environmental conditions can all be factors of depreciation. You also claim that the real estate crash is an isolated incident. It is not. The entire market crashes on a cyclical basis, and we have always had regulations. There was regulations during the mortgage crisis in 2008. Current administration is working on eliminating a lot of those new regulations that were set in place, so there is no reason to believe the crisis won’t happen again. Flooding is a problem for apartments, but they are also a problem for homes. If a tenant is renting an apartment or a house the structural damage is on the landlord not the tenant. The tenant can also invest in renters insurance, which is dirt cheap, in order to cover their belongings. An investment returning 10-12 percent is not going to take 15 years to surpass an investment returning 2-3 percent. That would not be mathematically sound. If one is putting in 50 percent of the same fixed payment in a higher returning investment they are already at an advantage to the person with a mortgage because it’s going to take half the life of the loan for at least 50 percent of the payment to be applied to principal versus interest. It is also untrue that mortgage payments are necessarily less in high cost areas. Some of the most expensive areas such as DC metro or LA average mortgage prices are consistently higher than rent prices even though the rent price are considered expensive when compared to the rest of the nation. It’s not about moving 25 miles out, because the trend can be noticed within the same municipality. It is simply not a buyers market, and that is why renters have the upper hand presently. Will there be another time when it’s cheaper to mortgage overall? Sure, but this goes to show that the renting verse buying is a case by case dilemma.

Every market is different. For me, buying and selling has made me a lot of money. I buy, live it for a year or 2 or 3 and move on. I live in Phoenix where the market is always changing but few people understand the concept of leveraging or take the time to research all the variables that go into making a purchase.

I like renting because I like to travel and might want to move somewhere else in the next few years

My city took over over 3 blocks of property due to eminant domain. From businesses to privately owned property, Gone! You dont even get close to what you spent on it from the government. You think you own something like a "House" but in reality all it does is suck people dry. With taxes, mortgages, maintenance, insurances, electric, water, gas, garbage. My city also has to pay not only garbage but also purchase blue colored bags to put them in. I will NEVER waste my money on buying property, homes. It cost me $650/month includes utilities (may go up due to eminant domain crap) to rent and I dont have to worry about upkeep on lawn, snow. Plus I dont have to worry if something breaks or stops working especially appliances. Just call the landlord or property manager.

Landlords have all their expenses + profit built in to the rent price. There's no chance of any equity going into your pocket........ The only good time to rent is if it's short term or if the real estate market is at a premium & you believe the real estate market will drop bringing prices down.

If houses are as expensive as 25 times the net annual rent and you could get a 4% yield at the stock market (eg ETF), than the financial aspect doesn't matter. If you have $100,000 for example and you buy a house, than it is the same if you put $100,000 into stocks, get $4,000 pa yield and pay the rent from that. Of course, taxes and stuff, but hope you get my point.

This is an interesting discussion. I’ve lived with friends for cheap in the past which was really helpful

@NateOBrien

5 жыл бұрын

Appreciate the input!

If you plan on living somewhere for at least 5 years, it might make more sense to buy a home. Otherwise, if you rent, you are making someone else rich. Say person A has a $200,000 dollar mortgage and they pay $2,000 a month. If their mortgage is a 15 Year, their total payment would be $360,000. The $360,000 factors in home insurance, property taxes, and interest payments. Then say person B has an apartment where pay $2,000 dollars per month. Then over 15 years, they also are paying $360,000. The difference between the two scenarios is one decided to make the landlord rich while the other decided to invest in buying a house. So our Winners it depends. Owning a home would usually win financially and you often have a larger livable space with more privacy. But with an apartment, you have more freedom to pack your bags and relocate when you want as long as you can find someone to fulfill the remainder of your lease. Also, in an apartment, should something break down, the landlord is supposed to fix it. Otherwise, say it's a roof leak that you have to pay as a homeowner, that bill could be in the thousands of dollars.

I've got a question: What are your thoughts on a single person buying a house and taking in roommates, short-term or long (I'll be living in a university town where visiting scholars and grad students abound). Pros and cons? unforeseen pitfalls?

If it’s a super prime location like centre of New York or London, then you’re never ever gonna lose if you buy. You’re set of life. Just rent it out if you can’t afford to live there as there will always be takers. Just about to do this with my central London flat. So glad I bought!

What about buying an apartment in a city like Toronto, where the real estate market is predicted to just keep growing. Buy the apartment, live in it, and then rent it out when you decide to move somewhere else. How does that sound? I'm considering it.

Buying a home may be intimidating the first time. *BUT* after the first home, it starts to make sense. And before you know it, you *KEEP ON* buying them =) I enjoyed the video!

I don’t understand how a house could possibly go up in value over time. Would that not be dependent on the buyers? No one is going to say “Wow! 50 years old huh? Ill pay extra for sure.” More likely the buyer will choose a cheap house that offers the same or better.

I think renting is only feasible if you cant put down a good down payment to afford a mortgage, OR if you live in a downtown area where you get a lot living in that area and need to stay there for work and owning property in that same area would be too expensive, like in NYC or LA it's only feasible to rent but rent in those places is still really freaking expensive (but you can make more money in those places through your job) however lots of people forget that when taxes go up like property taxes, rent also goes up as well, I wouldn't want to live in someplace like LA cause in my opinion it has the worst of both worlds, the grid of it is horrible it has high taxes, high rent for a shoebox and you NEED a car, at least in chicago or NYC you have descent public transit but I digress with that side rant, however if you are in any other city or state like here in the midwest it is totally worth it to buy, when my husband and I were looking into buying a house even one way over budget with a mortgage the monthly mortgage payment was cheaper than our current rent (we are currently renting a 4 bedroom house for $1k per month) but imagine if we would have looked for a similar sized home but was way cheaper, we would almost pay nothing in mortgage payments, and here property taxes per year are only what $3k max maybe $5k? That's WAY cheaper than what we are currently paying per year with renting, and another thing I want to point out with homeowners insurance is, for one if you have saved enough money and are able to buy your home outright without getting a mortgage, you legally do NOT have to have homeowners insurance, it's only for if you have a mortgage but only you can decide if you really need some type of insurance for your house, I know a lot of farmers in the country of my small town that dont have it cause storm wise we dont really get anything and I'm pretty sure amish people dont have homeowners insurance but I still think it's good to have even if you dont legally have to have it, and in that sense living in a small town, with owning you will get a lot more for your money and I feel it's more prosperous, it really depends on where you live but I personally would prefer owning.

I think moving (changing environment) often is not good for kids.

I've been renting an apartment for over 20 years with my long time friend and partner, her and I; The SAME apartment! My share of the rent is $490 a month. That is approximately 1/6 of my take home pay (my take home pay is $3000 a month). I DO NOT REGRET RENTING. However, I do feel I missed the opportunity of buying in the crash of 2008. I do have money saved up now. We'll see, to be continued...

I think renting is better when you know you're the type of person who doesn't like to stay in one area for too long. I'm someone that wants to live in different states every few years. Renting to me seems more sensible, unless I'm missing something.

I work a 9-5 and currently rent but want to create cash flow. Should I look to invest in a multi-unit property and how do I find these properties?

Brilliant! Thank you so much!

Rents to expensive at the moment at least the monthly rate. If you can buy a home and have good credit the mortgage payment is cheaper. At least in my area.

Add property tax, house insurance, maintenance, owning is essentially renting.

@daveicc495

5 жыл бұрын

Weijie Yao Everyone pays property tax Renters pay rental insurance

@daveicc495

5 жыл бұрын

Once you pay your home off it’s yours to keep No more payments One less worry

@AnaMerfu

5 жыл бұрын

@@daveicc495 my renter's insurance is 25 dollars a month lol

@daveicc495

5 жыл бұрын

My homeowners insurance is only $50 a month and I get to rent space lol

@daveicc495

5 жыл бұрын

You have to pay the grantor who is a making a profit off of of you if you’re renting lol 😆

How do you feel about renting an apartment vs. a house? I would think it would just be based on what living arrangement you want, and the cost. Am I on the right track with that?