Most people have no idea how money works. Otherwise they would realize their home going up in value means they are going to break even when they go to buy at those higher prices. To make intelligent real estate moves you must own more than one property or you need to live with your parents (if thats an option)...or rent. That way you can time the market. The true value of owning property is being able to take out loans against it and renting it out. But leveraging equity seems to be a danger for many home owners, they don't use the money to improve/maintain the property they blow it on stupid stuff. And being a landlord is not easy as many would be landlords are discovering.
Which is the problem with owning a home to live in. If you buy and sell and buy. You will make no gains and your mortgage will get bigger the more you do this.
In italy home prices have been decreasing for decades, except in big city centres, and mortgages have become impossible to get. My case was particularly difficult even with a relatively high income. Even then, italy has the highest percentage of owned firts homes. It is in our culture and is where most of italy's huge private savings are stored. One of the main goals in life is to buy your first home and to leave one for your kids. Any investiment can go up and donw, but you can still live in your home
I am 60 years old, traveled the world since I am 19 (65 countries), in tip-top shape, speak 4 languages, love my business and every love partners I had. I have never bought a property or invested in stocks. I have invested in my life experiences and most of all, my exciting international agency in sports and entertainment, and about to launch a great product. Never been married, had no children, and didn't lose time and money with university "education". Coming from a poor background, entrepreneurship was my way to freedom and living a thrilling life. Never, ever had debt. Retirement? This word doesn't exist in my vocabulary since I love every minute of my business. P.S. Oh and one day, all that will be over, so live your life to the fullest, you won't bring it with you when the curtain drops.
When I bought a house in a small coastal town here in The Netherlands 4 years ago, I was a bit worried the value would probably stay the same or even decrease over time considering nobody was really buying houses in this town and the house prices were only really increasing in the cities. It kind of seemed crazy at the time. Oh boy! How wrong I was! The house is now worth a million euros and I bought it for 575k! Perhaps it would be a good time to sell it now, but I won’t because I really like it.
According to 1 of the credit bureau. 75% of Americans die still owing money on their mortgage, to the tune of 50 grand. Before Freddy and Fannie, house cost was 150% of yearly wage, mortgages were only 5 years, because banks don’t like to go out further than 5 years.
Owning a home isnt worth it,(As a previous homeowner) - You basically dont own it if you live in the U.S Due to skyrocketing property taxes and the outrageous amounts of insurance you need on it. In my opinion it is much more worth it to be free and be able to move where you like and when you like even if you pay a small premium for it. If the cooling system goes out on your rental its an inconvience but you dont pay anything for it as its on the landlord.
And who is paying for AC repair at the end of the day? How landlords come up with rental costs and keep increasing them every year? They just go: dear tenant please pay our mortgage + property taxes + insurance everything else is on us. Don't worry about lobby renovation, grass cutting, pest control, our office staff.
My plan is to buy a rental home in the US and take my money to buy in a cheaper and more FREE country. It's worth noting though that the renter is still paying for all the taxes so simply being in the US can be expensive for that reason.
@@huwhitecavebeast1972 well, nobody thinks they should pay tax and everyone wants government’s services like fire fighters, police, public schools, Medicare and Social Security.
Depends on the person and the home. A home that is paid off is money in your pocket (usually). Housing and transportation are a persons biggest costs. Eliminating the payment for one or both of those reduces your cost of living, which lowers the amount of cashflow you need to build to cover it. Needing less cashflow than you thought likely means you will hit FI sooner.
Exactly. If you are going to keep a mortgage for 30 yrs, it's a crap investment. If you are super conservative and pay it off in 5-7 yrs it's wonderful owning real estate.
Right now during a real estate bubble, it is much smarter to rent in a lot of markets. In the United States, pretty much the entire western half of the country, Texas, Florida and a few other places it's a lot cheaper to rent than to buy. So right now, purchasing real estate is an absolutely terrible idea. Conversely, after a real estate crash, the opposite holds true because if you can buy a house for cheap, as real estate prices and rents go up, your housing price will stay steady. History repeats itself. Every 15 years or so we have a real estate bubble and every 15 years or so we had a real estate crash (bubbles: 1990, 2005, 2021; crashes: 1997, 2012, 2027). So right now would be better to rent; in about 5 years, probably a great time to buy. Bottom line, if it's cheaper to rent than rent; if it's cheaper to buy than buy.
I recently created a spreadsheet modelling 3 scenarios: renting, buying outright and buying with a mortgage, including maintenance costs for owning a home, property taxes, rental deposits, bills, etc with as much detail as possible, and for the rent scenario I invested the money saved on buying a home in stocks. The best option was owning with a mortgage, I think because of the leverage you get (if the house appreciates by 5% per year you get all of the gain minus the mortgage which gradually shrinks over time). Second best was buying outright, and a fairly close 3rd was renting. I assumed average stock and property increases of 7% and 5% respectively which can of course vary a lot depending on your location and the time you invest.
You have to be careful..my thailand property has not increased because of over building. My malaysia property was bought at half the price because i waited till the over built "over hang" needed to be sold. Its hard to re-sell your property in latin american countries because banks dont lend mortgages ...need a cash buyer. In many countries, foreigners cant own the land. I was looking at condo in indonesia and discovered there was only 10 years left before the landowner reclaimed the development. Many condo buildings in asia dont even hold up beyond 10-15 years before they are hazardous...shoe box size condos
I think the only time when it makes sense to rent instead of buying your own home is when there is a high probability we will see property prices go down or when you are young and making your mind up on where to live, what city, what country.
Why does everyone say owning a property it makes you stuck to that respective city??? I own a property and I do not live in that country…I am renting it and the rent fully covers the mortgage and I still have an extra 200€ extra on top of that I don’t even need to pay my mortgage…😄
It's always a better idea to own than to rent, better if you can pay the whole amount for the home rather than taking out a mortgage its yours and worst comes to worst even if you have bad luck and the housing prices go down you still have somwhere to live in.I will give you the story of my father and my maternal grandfather, both were millionaires, the difference was my grandfather had property that he owned, which after his crash saved his sons, my father never bought property in his name and put most of his money in stocks , all the property he had invested weith other people got stolen and when his business crash he had no property, we had to struggle after that, so If you have a lot of money buy a home and don't buy it on mortage or with other people.
@@algae_rhythms Maybe he was living in Spain and some random gipsies moved into the house and they were all on vacation and didn't notice for weeks. Then they could proceed to live legally in there. lol
Lucky timing for me. I bought a cooperative apartment 24 years ago outside of a major US City. Condos and single family homes were what people wanted back then. So glad I bought it - all paid off now, and even with increases in the monthly "maintenance" (common charges plus municipal and state property tax bundled in), I'm paying about 40% of what the market rent rate would be for my unit.
For those who are looking to avoid expensive rent or buying a home and paying property taxes, the RV lifestyle is a good option to consider. No rent, no property taxes
I live in my house for 20 years. It didn’t appreciate much, the current price went up only about 2x. But my mortgage is around $1,000 while renting my house would be $2,400.
The costs of owning and renting should usually be about the same. Excepcional situations may occur in which it is obviously more advantageous to own (or not) a home. But most of the time the costs of ownership and rent both merely reflects the current (and percieved future) economic situation.
Well, this is completely dependent on type of real estate and location. But in general it is not hard to find objects where the potential loss is low but reward can be great, but this also means you might have to pass on your dream house and make a compromise between what you would prefer and what is a good investment. I have bought and sold two times and each time doubled what I put in.
Well said! I am also here to learn how to invest after listening to a lady on tv talk about the importance of investing and how she made 7 figure in 3 month, somehow the video taught me nothing and left me even more confused, I'm a newbie and I'm open to ideas on how to invest for retirement
A news host spoke so highly of 💕 Priscilla Dearmin-Turner and her loss prevention strategies been trying to get to her ever since didn’t know she was so accessible
The whole point of nomad capitalist is to do what works best for you. I totally both of these situations could work great depending on a person's wants and circumstances. Great video, Andrew!
@@geozantrox666 Okay great. You signed a 4 year contract. After that 4 years, your rent goes up by 4 years of rent inflation. It's a big jump. If you own a home for 4 years, your house payment does not go up after 4 years. If the price of houses goes up, the price of the home you own goes up too. That means, you can even move and take your locked in cost of living with you to another house, by having a lager down payment with the equity you cashed out of your previous house. ...or, if you want to pay more per month, you can take that equity and invest it elsewhere, or spend it on something you enjoy, like a new yacht.
@@geozantrox666 Oh, and after 30 years, a huge chuck of your monthly expense just vanishes and goes away forever. If you move or refinance during those 30 years, the time before this happens can be extended but your monthly payment goes down if you extend it.
@@FreedomTalkMedia IF the rent goes up after four years, it will be by few euros. Only gas and electricity are going crazy. House prices in italy have been stuck or decreasing for more than 15 years, except big city centres. Only now with inflation they have moved a bit, but will stop again. My parents bought and sold a big house between late '90 and early 2000 and lost almost half. So all these financial considerations have no sense here. All that counts in our culture is to own your home and give a home to your kids
Um, like most things, it depends on your personal financial picture. 1. Wealthy Americans own US residential real estate and never sell but access the property wealth through cheap bank loans. 2. Neighborhoods of owner-occupied properties tend to be good safe neighborhoods. 3. Property, maintenance, and insurance, taxes, HOA fees and other carrying costs must be factored into your picture. 4. Pied-a-terre in appropriate city centers is a sensible lifestyle choice.
Bought a home Jan 2019 with a guest house (15yr mtg @2.875%) Home has more than doubled in value over last 5 yrs... mortgage, taxes and insurance payments are all covered by midterm rental income from the guest house! Our plan is to hire Nomad Capitalist so we properly plan to live abroad. The goal... to continue to rent out one house, leaving the other always available to us for when we are back in the country, eventually, buy a property in Portugal and rent or buy a property in a third country and live the trifecta lifestyle. I see no downside if we plan (taxes) accordingly. Note: we can easily afford the mortgage even without the midterm rental income.
I own property on both the North and South Island New Zealand. It is very expensive to rent in NZ. I have doubled my mortgage payments and the equivalent rent on my North Island abode if I rented it would be 20% less than my double mortgage payment. Landlords actively want you to break the lease so they can rent that property for a higher rate to the next individual. I don't know how renters become home owners in this current NZ home market.
In the US and soon many other countries..it was discovered by local and city governments that Taxing Property allows government to spend furiously and accumulate debt at massive levels..and governments raise property taxes and raise them in order to keep spending without restraint. Today, in the US, you dont own property. You lease it from the goverment.
My dad says not to tie up your money in real estate when interest rates are low, when it’s cheaper to borrow. (Not really the case now). But moving overseas it becomes so hard for Americans to get loans/mortgages on homes in Europe, e.g. So my thought is, buy a house outright, fix it up, and live your life without having to pay a mortgage, own your car if you need one, and live within your means on what you have saved and what you have as income. Invest in yourself and your nest. Housing property taxes are much lower in many places outside the US. Good video!!
Buy an apartment pay it and look for other investments, if you have own property then invest in other things but if you don't have other thing to invest then invest in real estate
Looked it up: Its around 60%- ish AROUND the WORLD of people owning a home. Generally, I think it is a good idea to buy (although the average person will OWE a mortgage in most cases). I'm in a unique situation where I pay very LOW RENT, sharing with a long term partner in CALIFORNIA. But I own a Condo in MEXICO free and clear (although with Mexican Law you own it 'in trust' with the government). If I had to do it over again (if I was 30 yrs old) I would probably BUY a home. But Now, being single, older, no kids, and I'm a long term tenant in a place that I remodeled, I don't think its necessary.
Basically you’re the equivalent of our char kuey teow hawker in Malaysia. Works hards to build the business, then hires someone to help. Owns a few houses but drive that one old Benz till he passes it to his son/daughter.
i just put all my money back into the business because i know i can make way more money that way also gives me more freedom then being tied to a country. in the future i plan to keep maximizing the investment on my business then i will invest/buy in other online business that i understand rather then being speculating on the price of a piece concrete that is already quite expensive for the average person here. maybe in the 15 years if i have millions in the bank i don't know what to do with it i perhaps buy a farmhouse or something like that.
This is a good video, that I had not watched , with good things pointed out to compare with the many advices, from many aspects, from some who think they have the best answers. Thank you.
I'm in Brooklyn NYC, no more rent control. It's now only rent stabilized which went up 3.5% and yet no improvements have been done on places. Living in a shoe box is stressful and kills productivity. I think Paris or Amsterdam would be a better place for what I want. Well right out side both cities. I want to be able to ride a bike and not get hit by a crazy person. But thank you for this information. It came at the right time for me.
I've bought a few houses and have never rented one at a operational loss month to month. You do have to build up an account to pay for repairs and if you own it long enough - a remodel. You make someone else pay the mortgage and the house will appreciate and you sell it at a market high. If you sell at a market low - I don't know what to tell you. My houses have tripled in value, but will tank when the current housing bubble pops. Guess what - I don't care. I'm not selling and so far (over 35 years) I have never lowered my rent.
I think it is quite risky to buy a property abroad especially you don't even know the language and systems there. I heard so many property scams in Prague, Phnom Penh etc
People usually say „Well you‘ll pay almost the same at the end of the month so it doesn‘t help you much, plus house repairs etc“. Well yeah, but what people don‘t understand is that they pay that money in to their own pocket. As in… the house after 25-30 years will be theirs. And it will probably double in price so you double your investmen. So why not pay it?
Sounds like being a god to me. Having said that I know Bezos owns a lot of things ...way more than I owe and he has more freedom than I have. I am not getting this idea that if you own anything then u r literally in jail 😒
I agree that the basic math presented in the CNBC article is incorrect. The cost of owning my home, including insurance, repairs, etc. is about 2/3 of what my house would rent for and I’ve had tax savings and appreciation along the way. Clearly there are markets where there isn’t much appreciation opportunity but I wouldn’t buy there unless I absolutely had to because of work.
Also as you get older as a single gent, owning a home and living with a gf, can turn out costing you money in a defacto type relationship.. Better to rent.
If you can score a cheap property with a good down payment, maybe. But I don't see the benefit of locking myself into a subpar property with a long term mortgage when just the additional interest and taxes will far exceed any actual gains (when adjusted for inflation) plus utilities, plus added insurances, plus total responsibility (both physical and legal). I'm "grandfathered" into a good rental rate in a well mandaged commerical complex and it simply makes zero financial sense to try and finance a house at the moment. I would rather save up for a homestead for cash in the mean time in an unincorporated area with little/no property tax and minimal regulatory nonsense. Or buy a shortterm apartment in a city where you can actually make some sort of profit with renting it out part time or at least write it off as an expense properly.
This video is more about owning rental homes in other countries. Not about mortgaging a house in America. Owning (mortgaging) a house in America is never-ending burden of debt that you're stuck in for 15-30 years.
I think is really good business to buy a house I have 3 main houses in 3 different countries and 3 citizenships . So is a very good have houses around the world.
In the US, Id want an appreciating market and the first time home buyer tax sale exclusion for a primary residence to consider owning. I think we may be entering into a danger zone for the housing market.
If this video is aimed at high earners, that have large disposable income, then property is just another diversification... For people with under 100k income, a mortgage is a waste of 100s of thousands of dollars of limited earning income over a lifetime including property tax and maintenance.... Unless you have children.
Owns atleast 6 homes which total a single digit of his net worth. Conservatively assuming each place is 300k each that's 1.8m total. Therefore his net worth is greater than 18m. Well done Andrew!
The thing Andrew about certain markets (Vancouver, Toronto, etc.) is that you can rent for a lot less than the carry cost of an equivalent property because of the extreme rapid appreciation in housing prices. Many owners bought 10-15 years ago, which means their carrying cost is far less than it would be for someone to buy today. Therefore, renting today from someone who bought years ago is in fact significantly cheaper than buying today and covering the full costs of the same property. I am sure this is true in far more places than the two I gave as an example. But being Canadian and most familiar with our market (where I both own in some markets but rent in Toronto), I know this to be true here.
Exactly, a lot of the commercial properties have been payed for years ago. So even if you're locked into a lower rate than new market renters, the property owner is not "losing" anything as their costs are still much lower than what they decided to charge you when you first signed your lease.
The reason why rent in New York might be lower than the cost of buying is because rent increases so fast there that landlords are willing to buy at a premium price today to collect higher rent later
I agree with your 100%, besides the feeling of being in control of your assets and making your sorrounding the way you like it to be, it makes it desirable to be in, and enjoy while being productive, w/o worrying that after one gets to settle down, someone will tell you the rent is higher, or they decided to sell, or, that the neibours are complaining about one playing Vivali's Four Season, or WHATEVER! And while putting the time to maybe get an extra citizenship or not, one still feel more in control while learning the local culture, besides if one decides that it is not the right place, or one decides to go and see/feel another part of the world, not be obligated to pack or discard the belongings, and one could even break even or probably end up making some money on the sale of he real estate. Besides there are just as many chances to lose or make money in the SMakets, and if losses are heavy might end up not being able to afford the rent of the life style, as some. Make big money, can also loose big money, when markets crashes, sometimes it happens fast and furious! At least one can take a breather to recover for a few months in the house property or borrow against the RE asset or sale if it comes to be the best or last option. I think putting 2 to 3k+ average in rent in someone else's capital growth should be avoided, of course unless not having any other choice. Not having a budget, a kortgage, people tend to have ((maybe) more cash flow, but many people has more tendency to blow it, as the more cash not engaged on something, the more we waist. As of now, I think potable H2O, will become one very scarfed commodity, though this is survival of the species, and, w/o it not much or not for long ANY thing will work, we waist it in the toilet tanks, Several gallons flushed down the drain, not thinking much that we should recycle the water used for other stuff like washed dishes or clothing into a reservoir for the toilet supply, when I bring this sort of ponts up, most people look like I'm out to lunch, WATER being the MOST precios mineral for humans, is being so mishandled and it seems like people do not care, even though We in more advance countries, know there are people that walk a mile or more to collect it, unprocessed, such difficulties, while people brush their teeth, or shaving, with the faucet open & flowing FULL for several minutes, it is so because they have it and because we think it will always be available. Just the lack of fossil fuels being produced as previously, two years ago, has caused such an economic impact globally, why can we not think what would happen we CAN NOT get potable WATER. We waist toooooo much! While many have NOTHING!
My rent in Miami Beach is half what ownership would cost. Luxury high rise on the beach. Same for everyone renting here. Yes it’s real. Owning gives you the luxury of being able to decorate how you like and never be thrown out. But if you don’t care about those things renting costs half. Owning is a luxury. “Owning” is psychological. You’re really just renting from the government.
yes! finally an affluent person who LIKES color. so many spaces/houses are beautiful but are so incredibly boring with black white and beige. It is really depressing!
Yes Americans spend too much and that is each individual’s fault, but businesses via advertising are encouraging this. Building it into our vain culture. What I also agree with you is the lack of financial planning edu in the USA to help Americans with critical thinking with their money.
First, a single family house that you live in is an expense, not an investment. Still, I would say it's better to own the home than to rent, though there may be circumstances where that's not true. Let's say you can choose between a house that's 1500 sqft and an apartment that's 1500 sqft. Now, houses generally are larger than apartments, but let's compare apples to apples. That mortgage for that house will be pretty close to the rent for that apartment. With the house, your equity will increase over time while your cost of ownership will be relatively stable over the years (despite property taxes increasing). With the apartment, you will get no equity, and the rent will increase every year, so you'll never get ahead of inflation. Now, if you want the home to truly be an investment, you need to buy a multi-family. Plus, if you believe the right-wing conspiracy theories, Klaus Schwab, Bill Gates, Zuckerberg, and all the rest of the wannabe Marxist dictators are buying up all the housing and means of production, so you might want to own the house you live in so you can't be evicted on their whim.
I think the pivotal concept here is that IN THE UNITED STATES, IF YOU ONLY OWN ONE HOME YOU SHOULD NOT LIVE IN IT. Why? If you live in it, then it's your residence. If you rent it out, all actual expenses PLUS DEPECIATION are Tax Deductible and the eventual profits are Capital Gains. Only the US Tax System creates this situation. It's not the case everywhere around the world.
Owning a house with out tenant inside let say in your second floor and basemand can have tenant. Ifyou have no tenant to br8ng you income and only income to pay your big house is your one job. Then it is very stupid and risky to buy a house
Owning property is a form of personal sovereignty. I have a property I own and one I rent. I have full control over the one I own and very little over the rental. That said, some of this boils down to lifestyle. If you like or need to move around a lot then renting is best. As an investment I made a lot of money on a home I owned.
Its passive income. It depends on where. your property is located. I have property in LA. 3 blocks from the beach. The equity will continue to grow. Am currently living in Europe
I am a real estate broker in NYC. It comes down to preference. But when you don’t have fixed expense expectations set in the future, times like today where you have 30-40% YOY rent increases like in Miami or luxury product in NYC, you start to see an opportunity cost show up for not buying earlier. Personally I don’t like owning real estate that doesn’t pay me to own it.
Andrew, quick question. Your properties: you obviously rent them out when you are not in the country but, how can you rent for a relatively short time? Or at random dates, airbnb or similar? I guess you have a managing company, correct? I want to buy property inAlbania or Greece, Italy, (probably not the best but also because I like going there) I’m worried about the damage to property and who to trust in managing it. Thoughts are appreciated! THXX
I see, but then, how do those homes become an asset instead of a liability? If he doesn’t rent them, they will be a huge expense… I don’t get it. Curious!
I totally got shafted during Covid, moved from west coast (renting due to shoebox costing $1 M) to northeast. Hated the culture. No one would speak to me or come into my home due to rabid corona phobia. Everything broke in one year (dryer, oven, heater), weird homeowners association. With psychos running it for ransom. Sold it for flat price and happily renting back in Cally!!!
If you are the type of person who has INTERESTS OUTSIDE WORK ..... sports.... old car restoration...pottery etc etc then you need to own you own home to do them there and you can't afford time wasted on travelling between homes all over the world ! People who do this life style have no interests, and lots of money to spare ! And no children !!! .. What type of person are you
I believe he is talking about, the new buyer, and or the new renter. Renting from a landlord that has had there home or apartments for 10 or 20 years is not paying 5k a month to maintain. They have no payment or they have a loan at 2.9 percent. So I think, the article relates to people that have had homes and rental properties, and have loans that are many years old. Just a thought to clear that up.
If you have 1 mil euro that you have invested in government bond or money market and you plan to move to France and or Italy for example for the next ten years ask yourself this question should you use your 1 mil euro you have to buy a home for 1 mil euro cash or rent the very similar home for average 5500 euros per month. Assuming the rent amount increases by 4% annually in 10 years you will be paying cumulatively more than 800K euros just for rent without any equity in that . That is 80% of the initial cost of ownership of that home! If you have that extra cash it is no brainer that you should by a home. Additionally investing in those European countries by owning a home might give you a pass to permanent residency and a pass to citizenship. Isn’t why you plan to move to Europe to begin with?
