Owning your home has a huge psychological benefit. Knowing no one can kick you out as you get older is priceless. There's a con and a pro for everything.
There's a huge psychological burden too... Of repairs.. .. Of not being able to pay property taxes.... Of having a mortgage looming over you for 30 years.
I will admit that most of my life, I had no desire to own or take care of anything while I was busy moving and traveling. Now that I’m in my 40s, that has all changed. I’m so tired of not being able to have a big dog, paint my walls, hang a tv on the wall, plant anything because I don’t have a yard, and I’m sick of having to listen to my neighbors every breath through paper thin apartment walls. Im probably not buying soon until things come back down to reality but I am no longer concerned with what is cheaper. It’s now becoming what is more important for the quality of my life, not having to follow someone else’s rules, being able to have what dog I want, and being able to enjoy my space. Cheaper is nice but not always worth it.
Yep. With too many twitchy, ignorant and fickle landlords including the ones who want to grub the deposit for any lame excuse that they can muster. I plan on buying within the next 3 years or so, though I could sooner, depending on what unfolds. In the meantime I'm informing myself with videos like this but especially home inspection videos. I want to know what I'm looking at well enough to warrant hiring a professional. With pet hassles in rentals: It's because there are so many people who want a pet that have no business owning one because they are too ignorant to comprehend how little they will be home for the responsibility that they are taking on, even with Cats. These selfish, ignorant people ruin it for everyone else. Between the two, I am with you. Use due diligence on the property and home and the land and properties in proximity. It's not just apartments & ignorant renters. My next door neighbors have dogs that bark, yammer and howl at all hours, throughout each and every say. I love the wake up yowling at around 6AM six days a week whenever the two employees arrive or depart from a small Co-op, a delivery truck is anywhere sight, or a pedestrian is walking across the other side of the street or because other inconsiderate and obtuse neighbors yard dogs bark for no apparent reason, other then boredom. The how and why they don't seem to hear all of this pointless racket is beyond me. I'll make sure that my property is well suited for my purposes, something that I'll be content with for the rest of my life where it's insulated against such un-neighborly assaults no matter their neglect. It's a lot of time and work on the front end, but will pay dividends in having a peace of mind knowing what you have and a plan for ongoing maintenance, repairs and contingencies. School starts now.
I rented for 39 years. The problem came when my husband came down with cancer . He had Alzheimer's. I couldn't get him up the stairs anymore. Third floor no lift. Went to the complex where my daughter lives. The woman said. Unless you're making $60,000 or more a year don't even apply. My husband had Alzheimer's for 21 years. No we didn't have $60,000 coming in. My only option was to go for a manufactured house in the development. Right now: landlords are looking at people's situation. Your income . Even to rent.
Owning a home once the mortgage is paid off greatly reduces the cost of living. I think that was what Dave Ramsey's point. Many people will struggle in the beginning when buying into a new home with a mortgage. Once paid for, it's smoother sailing, not necessarily smooth. There will be maintenance costs, insurance, HOA (if any), and taxes. The idea is to pay it off as soon as possible.
We paid our mortgage off in 2012. Best decision we have ever made. Still have taxes, utilities, and maintenance. When purchasing a home be sure to have money set aside for repairs and inflation. 😊
I've been renting my current home for the last 7 years here in Hawaii and my landlord raised my rent from $2900 to $3100 this past March. He said they are trying to catch up to the current market. The home was built in 1964 and from what I can tell, they have done very little improvements. In reality, if you saw it, this home is not worth it. The property manager already told me that the rent may go up again later this year or next year, but did not tell them I am moving out soon. I am in a position right now that I will have the actual cash to buy a 300K home in Texas where I am moving to. Or at least a very large down payment and a 15 year fixed loan. It feels good to be debt free.
Good luck. EVERYONE is moving to Texas. I'm a Texan and had to leave because the rental market and housing market are all going up. There are more people moving there than there is room for.
The ship for affordable housing has long sailed away in Texas. My real estate agent told me the average listing price is over $500k in my area. Do the math on 3.5% property taxes and that is $17.5k on top of a mortgage every year. Texas government likes to raise them. Last year many saw over 20% jumps.
My family and I were evicted after a kitchen fire. We lived there 14 years, raised a child there,never late on rent and we had insurance to pay the damage. Worst feeling I ever experienced. Bought a home after leaving
If you rent, there is always the risk that the owner will sell the house or raise your rent over time. If you rent for 30 years all you will have is rent receipts. There are costs to owning a home such as taxes, insurance & maintenance, but if you rent for a long period, guess who will end up paying for those expenses.
Roof, water heater, washing machine, lawn, appliances, windows, keeping up with Jones, time, insurance, amortization of loan on a 30 year loan is the price of the home . If the value goes up , by the time you sell the housing costs around you will cost the same.
We’ve had a few homes. Home ownership definitely has it’s ups and downs, plus and minuses. It’s not for everyone. Currently we’re renting a place on the shore that we could NEVER afford to buy. Great landlord too. All things considered the rent is actually very affordable for us. Hey, it’s paradise, even if temporary. Life is short. Do what makes you happy.
No one also mentions that if you sell your home you have to downsize or rent to actually realize those gains because if you buy a bigger home you still most likely have a mortgage
I bought when prices were lower and locked in a low monthly payment. Homeowners insurance and property taxes do go up, but the house payment itself is rock steady and will be until it goes away. Is owning better than renting? I've done both and owning is better IF you get a good deal at the right time. Timing is everything in life. And you've got to be happy with what you've got and not always be seeking something new if you want to be an owner.
I was so so lucky. I decided to buy last year RIGHT before mortgage rates started going up. 3.25%... in a cheap area. Mortgage plus escrow is 720/mo. Then I got a raise... then I got a cushier job. 41 dollars an hour, unlimited overtime availability plus incentives. I plan to buy during a dip, but unsure where. Definitely will wait this out a bit. I'm not the norm and I feel grateful because it could've been so bad...
The old adage applies here , break out “needs” from “wants” be smart with your money. With regard to mortgages the interest paid over 25yrs is horrendous!!!! Renters have more flexibility to simply move to another job , or play one landlord off against another. Renting is not a waste of money.
I’ve rented for 18 years and one thing that never happened was rent going down. Securing a roof over my head by buying was the best decision I have made. Repairs are often grossly overestimated especially if you go the condo route.
You sound like you think your current landlord will kindly lower the rent. If that's what you were thinking, that's not how it works. Competitors to your current landlord will lower rents - you have to move to capture that. Maybe I misunderstood.
All that money you are paying in rent that could be used to pay down the loan. You are just delaying the inevitable. Hope you don't plan to work till you are 70 to pay it off when you finally decide to buy. House prices will never crash.
Same here. Landlord just did an $8-10K roof job here this weekend, took out a dead tree and all of the vegetation that was woven in to it. It didn't cost me a cent, nor did I lift a finger. After he was done, he apologized for all of the noise and hopes I never leave. If you know, you KNOW...
Bought small cheap fixer-upper (no HOA), an 80 percent renovation job done by myself, and paid it off in 5 years.... now enjoying my free life and traveling a lot.
I love your videos. It gets everyone thinking. It all comes down to a personal decision on what a person wants (free will/belief). Rent or Buy, we are all here for a short period of time anyway. Who's going to care about any of it when your 100 years old? If we live that long. Everyone do what you think is best, there's NO WRONG OR RIGHT ANSWER. Enjoy life on your terms Renting or Buying🙂
I sold my home in Portland OR in 2012 to move to Calif to be near the grandsons. I rented in Calif for 10 years. It was expensive (but it was worth it to be near my Babes.) Finally I had to leave, it was too expensive in Calif and the grandsons are growing up. I moved to Kentucky because I have family there. I realize most people would not choose Kentucky. I paid $140,000 for my small home (1,500 sq feet.) I put $30,000 down. The interest rate is 3.25%. If you can believe Zillow it is now worth about $160,000. I still work via remote, but I’m at an age where I’m thinking of retirement and I hope to never move again. I love my little house. I love that the landlord won’t raise my rent. I love being able to fix it up as I please. (Just remodeled the kitchen.). And, I love that my house payment with taxes and insurance is less than $800. That is one-third what I was paying in rent in Calif. There is no rental in my new, small community that I would want to live for $800. And certainly there is NOTHING to rent in Calif or Oregon for $800 a month…not even someone’s spare bedroom! Now I can plan to retire in a couple of years. I do not feel stuck. I realize taxes and insurance will go up, but even when I retire my housing will be affordable. I think it was a BIG WIN all the way around….the only negative is My Babes are in Calif and now I only see them 3 or 4 times a year.
When it comes to Buying I have the Feeling that a lot of People only focus on the Listing Price and the mortgage, but they forget about all the maintenance costs for the House. Thank you for reminding this important point Michael!😊
Your obsoletely RIGHT, there's a BIG but, Would you rather have the same mortgage (ex: $ 3,000) payment in 10 year's with a little maintenance cost or almost double the rent ($6,000) because no one wants to do a little maintenance. I AGREE THIS IS NOT THE RIGHT TIME TO BUY, BUT WHEN THE TIME IS RIGHT, BUY🙂 @@MichaelBordenaro
I’d been a homeowner and landlord for 14 years and maintenance isn’t that bad. There a lot maintenance you can do it yourself with the help of Dr RU-vid. I learned how to fix and replace drainage pipes, replace kitchen faucets, install and replace outlets and many things. Let’s put it this way if I listened to any of these crash bros GARBAGE advice I would’ve missed out on buying my 2nd house in San Diego. I bought my 2nd house in San Diego for 685k with rate of 4.375 last August 2022. The house has 2 ADU a private studio and a garage converted bedroom with private access and bathroom. Both ADU are rented and cover my mortgage. Not only my rate is low Im not paying my mortgage and I get to save it for 3rd property. I’m buying within 2 years after I pay off my 1st rental house located San Diego also. I can rent out the main house where I’m staying which 3br and 2ba for 4k and that’s my cash flow.
There’s deals out there you just got to look for it. Don’t let the negativity control your life. Instead of focusing on negativity. Know your market, have a plan, goal and strategy.
California is going to be the next Michigan. It's no way you can buy a house over $1 million, a car over $50k, and a student loan over 75K. This is so unsustainable.
Yeah idk how people do it tbh People’s entire income practically goes to housing even before the boom. And to add in an auto loan, student debt, cc debit. We’re going to see a mass deflationary period in auto/housing sector imo especially if we tighten up the border and allow less immigration over the coming years.
I have been renting all my life. I am 44 and started to make decent money finally. No longer have to work multiple jobs, but the downside is that I have debt (auto, credit and student). At my age if I can never afford to buy then the next best thing I can do is live debt free. That alone may create opportunities later in life.
Michael I agree with renting temporarily and that is what I have been doing for the last two years after I sold at the height of the pandemic. I want to say though I totally understand why people want to buy and believe me I can't wait to ditch my rental, which I just signed another 18 month lease. Home ownership is so much better because simply it is my house and I picked it. Rental units are so boring and and you can't change anything about it. I would rather be the king of my own castle than be a quest making money for somebody else living in their home which is not really a home but a structure with a roof over my head. The pride of ownership definitely shows too, you can tell how the house and yard is kept up in a a rental, you just don't care as much when renting. So yes finically it is smart to wait for the housing market to correct but renting just, "Sucks!!" So Michael you may want to consider this when talking down to those who want to buy. Pride in ownership is important and I worry how people want to treat homes as either just a money making decision or a matter of convenience. It used to be the American Way to own your own home and get some land and this new thought of Global Reset thinking of owning nothing and liking it is something I will pass on, thank you. Call me old fashioned but I would rather own.
Right on.....many renters simply can not afford a house, some can not afford starting family, some are too lazy to work on the house. Of course there are exceptions like jobs that require frequent relocations, and a few more. Why would you want to raise a family in a rental ? People that bought and paid off their homes usually retire early and have money in the bank - the opposite is true about the renters.
Love your content Michael. While it may be cheaper to rent in some cases, as long as someone does not end up house poor and owning a home is one of their life goals, I don't see anything wrong with it - even with rent being the cheaper option. But as you remind your viewers often, you need to be ready to be a home owner. It does not stop with making your monthly mortgage payments.
When I was young, credit cards were just starting. Before that people saved and used cash. My grandma's generation that went through the Great Depression, continued cheap living even after it ended and routinely died with $100k+ in the bank. Of course the kids squandered it all. I listen to young people that have decided to rent and enjoy moving so they can work in different places. I encouraged a young engineer I work with to save money until your assets generate enough money to pay your rent. The more I think about it that really is the best thing to do now. It gives you runway if you lose your job, if not you generate money and eventually your generate $5k then $10k per year and it's not that long before it's $25k. It does take discipline but I find some of the young people are smart with their money. Most of course are not.
I here what you are saying about your grandmother for me it was my parents that went through the great depression and it was pounded in or heads that when you lay down to sleep at night and you do not owe anyone you are a free man and not a slave to the bank.Lived by those words of wisdom and retired at fifty to enjoy health and wealth.But I agree with the next-generation after me that have an attitude of intitlement ,they are the crying slaves.
I try to tell anyone that will listen to get some runway. I didn't start until I was in my 40's and almost had to live out of my car after a layoff . It was scary, the country could as well entered into a depression which they are saying might happen in some circles. A friend of mine was living in a friends barn. I did have one newbie listen , he was in a furlough and he thanked me because he was ready to buy a new car he didn't need. Now he and his wife are thinking about saving. I think everyone gets a reality check when they experience hard times. Some prepare others do not. @@garymiller4141
It's a status symbol. Also, in some places there's no room for more homes. A waterfront home that's 2 million today could be 5 million in 20 years. There's unlimited wealth now. The whole coast from Maine to Key west is built out with mansions and 500k boats on lifts.
That could all easily crash! Nothing is guaranteed. The kinda wealth to hold that up for twenty years? I dont want to imagine what this country will look like by then.
@@taroman7100 No Way, the generational weath is insane. I worked for Chubb insurance. They have Whole teams of accountants called Family offices that make sure all wealth transfers. We insured people that were dead and all 100 great grand kids still had millions. The wealth just multiplies.
@@taroman7100the wealth transfer from the rest of the living boomers and the generation before it who are still alive, the silent generation, is 83 TRILLION dollars. I don’t think people understand how much generational wealth there is.
Hey Michael, love your videos. One difference between renting and buying that I don't think you mentioned: After 30 years of renting, you have nothing to show for that money spent. On the other hand, if that money had gone toward a mortgage, you're now (usually) sitting on a huge asset. Not saying it's the only factor, of course, but it's an important one. In typical markets, historically, a mortgage payment is a little less than rent for the same home, at least in my neck of the woods. However, I realize the last couple of years are anomalous, and all bets are off right now. That said, I appreciate you giving multiple angles to look at it from. Thanks for your content!
Totally agree, renting is dead money. There may be specific reasons to rent ie temporary job in another place etc but in the main the majority of renters would prefer to buy. I thank my lucky stars I managed to get on the housing ladder in the UK in the mid 90's before prices went crazy and never stopped.
You keep saying that Renters can move if they don't like rent increase they might get. Moving Sucks! It also is very expensive. I don't know about other folks but I like staying put where I"m at for awhile so I don't have to go through the headache of moving. Have you checked prices on Moving Companies? Do that every few years and see how much money you spend.
That’s true I agree with you. So another thing to take into consideration is your lifestyle. The more minimalistic you are the better candidate you are for being a renter.
I think the number one reason is this. When you rent, it's hard to make the place your home. As in make it the way you would want it. For example, with most landlords, you cannot paint, you cannot hang heavy things, and you definitely cannot make perminant renovations. You will always feel that you are living in someone elses house. For some, these things are worth the extra expense.
Over 8 years I've paid $15k+ removing trees. Not the kind of thing easy to do by yourself. I would have still bought the place because I love it and I got it at 3% but repairs can be expensive.
100%. I used to own a home in AZ with a pool. I also removed a tree, replaced the roof, A/C, kitchen appliances, and over the 18 years, thousands of repairs to that pool, but yes, it was a great house and I was lucky enough to sell in 2021 for more than I would ever pay for it 🙄
cool - I was lucky to get my house before the big runups and I'm so glad I was able to live in it during Covid. I would have gone nuts in my old Apt. I'm doing my own repairs when I can. Everyone has said pools are money pits. @@katydid2877
Yeah a coworker moved to San Diego and paid 1 million. I still can't imagine that, his wife works also. I was dumb when I was in SD and houses went to $250k I thought it's at the peak. It will be interesting how this all levels out, if it stays at these levels it's going to be tough. @@McNelisG
Renting has its advantages. We sold our home prior to the 2007 crash (was a student of Robert Shiller of Case/Shiller index) and read his papers in early 2004 that a housing implosion was coming, So we moved into a rental house. Dodged a bullet and repurchased a home in summer 2010. 😊
I think the wise asset to own, moving forward, is land. We are looking at adding another nicely wooded 25 acres to the 35 we currently own. I think land is the next great asset to own, good quality land.
We did the same. We sold our house in October of 2007. It was one of the last houses sold in our community. We rented for 5 years and bought a house in 2012. It was a great investment in both cases. Now we're getting ready to sell again. Our property has appreciated 3 fold. We're hoping to sell this one and buy another in a less expensive area.
In MY experience, it was the invention of the "Real Estate Managenent LLC" in 2008 that destroyed renting. They hire inexperienced staff, have more rules than an HOA, DEMAND payment by the FIRST (nobody is paid in the last and first few days of the month), and treat residents HORRIBLY! So renting became absolute HELL.
Michael, I really appreciate your honesty...the pro and cons of owning vs renting a house...and your in depth analysis of the real estate market and explaining different scenarios...again thank you for your balanced perspective/opinions!!
Renting a home in the town next to where you are filming. Monthly rent $5,500. All-in mortgage, taxes, insurance on the place we rent I estimate to be about $14,000/mo. Easy choice in California, where the rent vs buy ratio heavily favors renting!
General speaking, in a normal real estate environment, buying should be better (but usually more expensive initially ) than renting long term. Never intend to sell after 31 years, do easy house maintenance and let the kids inherit it.
Back in the early days before Airbnb people had to own a lake house to enjoy the lake …nowadays it can be rented but back then it was more prestigious to own in my opinion.
We had a bad situation, retired in CA and we could continue to pay the mortgage, we sold the townhouse and moved to Texas. Bought a beautiful house and had to sell because of vandalism, racial harassment and racial slurs written on the garage door and our car. Calls and hang up on the phone. I am white and my husband is Chinese American and it accerated fast, broken windows. We need a safe place to live. Now renters and worried about the future.
I know a ton of people who payed their house and then retired on a fixed income, if they had to pay rent they could not even live on that side of town. The goal of buying a house is to get it payed off so you can live in it rent free. Of course if you aren't planning to retire between 55-60 the housing game might be for you. LOL after 1 week of work I knew I didn't want to work to end so I started planning my retirement with MS . I was on my way to paying off the house and building wealth, It's what you have to do if you don't want to work till you drop. long term decisions are today's decisions
I’ve bought and renovated my 3 past homes and despite always being able to afford more expensive homes, I always bought much lower cost homes that were “fixer uppers”. I only hired contractors for jobs I absolutely could not do, like air conditioner replacement but I did do jobs that were within the scope of my skills. In my second Florida home, I replaced all the windows myself with the help of my teenage daughter. I was a single mom who never received child support and my self sufficiency saved me untold thousands of dollars in improving that Safety Harbor house. My daughter and I even demolished the main bathroom to the studs and installed everything thing new. I sold that house for twice what I paid when she graduated college and I job transferred to upstate NY where I bought another fixer upper and now this place has been totally renovated also. Affording the repair and maintenance on a house really depends on you. If you don’t want to do the work yourself or have ridiculous consumerist ideas about “style” or you just don’t know what the working end of a screwdriver looks like, maybe you’re not homeowner material. This channel features really high end real estate areas. I’m guessing many of it’s subscribers and the unhappiest ones never thought to develop any skills besides fun having, dressing up and impressing others with their tans and gym bods. Here in Central NY, Californians are showing up, buying historic wrecks of mansions for CHEAP and are fixing them. Just maybe if a young person or young couple lets go of the consumerist attitudes about stone countertops, en-suite masters, chef’s kitchens and multiple thousands of square footage they can get into an affordable older home and find that equity can accumulate as you put money into the house with sweat equity. I just spent 100.00 on lumber to fix rotting boards on my deck. It cost me 170 bucks for dinner with my daughter and her fiancé for their help rather than the 2.5K I would have had to pay to a contractor. Do you want a home or a short walk to the beach? Only you are responsible for what you can afford.
Exactly! Me too! Single mom, learned to do a lot for myself. Bought a 100,000 home in a kind-of up and coming area, but not great area. I upgraded the bathrooms and added back porch and front porch. Sprinklers etc. Now it’s worth a lot more! Honestly I put up with the area when I first bought. But I do love it now. It’s gotten better.
My reason for buying and for paying it off in full is so that i know I will have a roof over my head even if the shit hit the fan. As long as I can cover the $250 a month in property taxes I have a 3 bedroom home. (and if things get real bad I have 2 bedrooms I can rent (and that does not include adding a bedroom in the basement). As to things going up the taxes went up a total of 2,000 a year over a 15 year period (I can guarantee you the rents went up far more than that). (p.s. I watched the shit hit the fan multiple times with my parents and the last one where their house was paid off was only a little blip where the other times were major disruptions).
I hate to be cynical, but it's important to remember that Dave Ramsey began his career as a real estate agent. He probably has a lot of connections in the field (perhaps in the form of sponsors) and a lot of allegiance to that industry yet. When he starts harping about the need to buy a house RIGHT NOW (regardless of market conditions), I just get the feeling it's not the interest of his listeners/viewers he's most concerned about. He sounds like a pitchman for the real estate/mortgage industry.
Timing is everything in life! This is not a good time to buy, but who knows, It might change in 5 or 10 years. I bought in two thousand twenty one and locked in a 2.37 percent interest rate on a 15 year note on my SW Florida condo. Right now I think the key is to think on your feet and try to stay ahead of the inflation.
I feel like I live in a different America. I am a landlord in eastern Kentucky. I rent out very nice 3 bedroom homes for around $750-$800 a month. Depending on things like appliances etc. I have decided to get out of the rental business and have started selling the houses. As soon as someone moves out, I fix up the house and put it on the market. The last home I sold was on the market for about two months and was listed for $125,000. It was move in ready and had a brand new roof and brand new 3 ton heat pump etc etc. That’s what the prices are like around here - Fairly reasonable. I guess it’s a trade off but I think a family could live comfortably and thrive around here.
For the most part, when you rent, you're at the mercy of the landlord, whether a private homeowner who can give you notice that they're selling and out you go, or a management company, for any number of reasons. This happened to two women I know, who were each renting for close to 20 years! On the coast, from VA Beach to the Keys, condo owners are flipping out, because the HOA's are jacking up the monthly costs to cover increased insurance after all of the Issias claims. Many are bailing and looking to purchase homes where no HOA's apply. I'm glad I sold my house and bought a house with no HOA. If you're a minimalist and have a nice rental situation, much better to roll your savings over in stable value investments, instead of buying a home at 7% or more.
Ramsey said that he met God on the way down. In other words, when he lost everything and went broke because he ended up in an upside down situation when the bank pulled the rug. I’m amazed that he wouldn’t consider that when advising other people. Very dangerous time right now for new buyers.
In the long term it’s far better to own than rent. After 30 years of renting you own nothing. After 30 years of paying a mortgage you own the property(assuming no HOA).
You don’t have to by a million dollar home. I live in the Green Mountain National Forest in Vermont. I bought my house through owner financed mortgage. I bought a two bedroom 1 1/2 bath with detached barn on two acres in the national forest. It was a fixer upper for $60.000 3 percent fixed APR on a ten year mortgage. My house is paid off December of 2023. Over the last ten years I have remodeled and landscaped my home. With mortgage town taxes and house insurance, my home and three bay barn was $800.00 a month. I live in a pristine small town location, with about 1100 population. With major cities (Boston/NYC/Montreal)less than 4hours away. And only 2 hours from the ocean. Life isn’t just Florida or California.
I agree. It feels good to people to buy things. It hits those endorphins just right for some reason. My wife just said to me today, "doesn't it feel good to come home and see packages at the door? It's like getting presents just because". So that's crazy that your video started out with that story. It just feels good to treat yourself, but why are we doing it even when we really can't afford it? That's the question we need to find the answer to. We, as consumers, need to get a hold of ourselves. We are out of control, clearly. Let's snap back to reality and go back in time with our economic situation. We need stuff to go back to what things were costing around 2012-2014. Consumers hold the power. We ultimately control the cost of things. If we are not buying stuff, then the prices drop, period.
I rent. Got a new refrigerator, a new oven, a new air conditioner and did not pay for any of it. I am only one small woman. A house for me now is ridiculous. Upkeep, plumbing issues, infrastructure...I have fewer possessions in my apartment than homeowners have stashed away in their garages! That commenter above it delusional. I bought a four BR house in 1982. Spent a fortune just on furnishings and comfort items. That doesn't include the backyard, fencing, landscaping and HOA. He's nuts. Renting is cheap.
I wish it was cheaper to rent. We sold our home in 2020 and have been renting the last 3 years waiting for prices to come down. Our rent is $2500/month. Includes nothing, we have to pay water, sewer, trash, electric, heat, internet, pest control, and insurance. We’ve wasted so much money renting, wish we would have bought back in 2020/2021.
Totally fine, fortunately. It has completely moved on from us. (I texted some pictures to you guys, so you could see. Not sure if you have received hem yet though.) Thanks for checking! 🙂 @@Lisithedogwalker
I rent here in the Bay Area and have been since 2004 . My rent has gone up a couple hundred dollars but has stayed basically the same . What I pay for a 2 bed 1 bath with a garage is less than some of these people are playing for their cars . This has allowed me to not only save half of the cost of a home for sale here but it has also allowed me the extra finances to have lived a very fun life . I have had sport bikes , boats and the time to use them . Renting isn’t bad I actually prefer it because I save a bunch every month . Figure my housing cost is less than 1/4 of what I make . Actually my rent and truck payment is 1 paycheck to pay both . So renting can be good when done right .
For Florida if you avoid HOAs and use homestead exemption (up to 3% every year), property insurance is the major thing that you can't really lock in. For single family homes rents have doubled since we bought in 2021 but our major carry cost is the insurance (increase 1K every year).
Bought a condo in 2020. The value has almost doubled since but HOA has also almost doubled. Bought a house back in March and similar homes in worse condition have sold for around a 100k more than what I bought mine for in the same neighborhood. There is simply not enough homes in south Florida. I don’t see the values ever going down unless there is a mass exodus of people out of the state.
I've had a lot of money while renting and I've had a lot of money while owning, and I always made more, saved more, and invested more money while renting because I made that huge down payment principal work for me in investments not buying a house with it. Making 20% average a year in the stock market makes me more than I ever could in real estate. Plus with the stock market all I got to do is click the sell button and I am out. My wife and I also just transfer and live in a different state anytime we want while renting which we do average every 4 years. More freedom comes when renting. We also don't rent luxury, we only rent one bed, one bath 600-700 sq foot we don't care. 1200-1400 dollars per month.
@@Shahyee So. Children are a pain in the arse anyways. People have them while trying every second to leave them with grandma and grandpa or are glad they are in school.
Renting is for sure the best option at this point. Especially with the way interest rates are and etc. I was fortunate enough to purchase my home in 2019 here in North Bay Area. My mortgage is lower than what I can rent the house for. So if I decide to rent I can still make a good profit. So I’m very comfy with my current situation here in the bay. I have tons of friends who’s recently purchased and their mortgages are higher than what they could actually rent the place for. So the house owns them basically. I hope you enjoy the Bay Area. Def head up to Napa and grab some great wine when you get a chance. Cheers my friend. Keep the great content coming. Take care.
Michael here is another reason to buy. I purchased a “fixer up” near the beach in Sarasota in 2020 for 600k. I put under 100k in upgrades & fixes and just closed last month at a whopping 1.6+ million dollars. I know not everyone can’t fix things, but if you can… Cash cow! We really enjoy your videos.
I like that idea of not owning where you live but to own something. I bought my current home as a rental property in 2016. Sold my home in 2019 and rented for a couple years. 2020 events pushed me to move earlier than expected into the rental and make it my forever home; yeah, never say never but with a fixed property tax increase of 3 percent since 2016 and not in a hurricane/tornado zone that keeps insurance increases less than most places. I did spend about $70k for the roof, heat & a/c and modernizing the interior. I do not expect anything major for many years to come. The zestimate is 90 percent more now than what I bought it for. Those renovations/improvements would likely get the hime about 115% more than what I bought it for. But I love the neighborhood and its very affordable. Not looking to spend the crazy prices on another home. Let the market crash or Ill enjoy making 5 percent on my savings for now
Everyone should own at least one home, even if they rent it out and rent somewhere else. It protects you from housing inflation and keeps a roof over your head.
I feel like people need to really see people’s real life mortgage statements for new homeowners. I worked in mortgage servicing and surprisingly people didn’t know much about what happens after they send their payments in. Like how the payment is split up. I will always feel like a mortgage is the ultimate scam just because people don’t have hundreds of thousands lying around. It’s insane to me.
Real estate is local. In my area it's cheaper to buy than to rent, even with the high prices. A house where you pay 2500 per month on mortgage and property tax and HOA would rent out for 3000-3500 a month for the same type of home in the area.
I agree with Dave Ramsey's ideology on this issue you are discussing. You say you can always move when the rent gets too high. Well the cost of constantly moving is expensive, plus if you live in California and the rent is going up yearly you have to pay that not to mention the up front payments and deposits etc. So it is better if you can to buy and be stabilized at least for your mortgage. The taxes and insurance and incidentals you just have to budget and deal with.
I don’t know anyone who is a renting a house today who doesn’t wish they bought a house 10, 20, 30 years ago, even if 10, 20, 30 years ago “it was cheaper to rent” than buy. Usually it is just the opposite and people say they wish they bought 5 homes etc…. Having a long term horizon is important in life. Most of us are going to live a long life, plan for it. If you only make housing purchase decisions based on rent vs buy as of today, you are missing the best part of long term home ownership. I am glad I bought my first house in 1997, even though it was cheaper to rent than buy. I could have said that every single year and not bought. Instead I thought about it from a long term perspective.
Yup. Paid cash for our place on the gulf side after we left Baltimore. Semi retired at 53. I have taxes of $1100 a year and about $150 to keep the lights on. Thats it!
I haven't had a mortgage in 10 years thanks to flipping homes. Renting would of cost me dearly. Also condos don't appreciate as much as a single family home
Another good video Michael hope you and your wife are having a nice time, and I hope the rains aren’t too crazy where you’re at, be careful. Mother nature appears when we least expect as we all know, and lately she doesn’t seem to be too pleased with any of us anywhere, I think there might be a message there.
I think that part of the reason why people aren’t saving is because interest rates were so low for so long, going back the last twenty years really. People have no incentive to save when major banks are paying .25% interest on your savings. It’s only recently become the case that you can get a decent return on your savings.
Just saw that 10% of the population recently became 401k millionaires. Inflation has apparently caused the price of stocks to go up too. Putting your money in the bank, unless you step into a special CD rate close to 5%, and have a $100,000 or more invested in it, is a waste of time.
Many rather own rather than rent is for self security. Yes, it does cost more these days, but if you can afford it, you don't have to worry about receiving the letter that says that the owner is selling and you have to move. That happened to me once, and that was the end of renting for me. If you can pay an extra $1k or even more towards the principal, it's a win win.
The interest on the home is part of the payment and mortgage payments are compared to monthly rent costs NOT the cost of the home divided by 360 months. The argument that you pay more than double for a home when you buy because of interest costs is irrelevant! Historically, the number one generator of net worth for American families has been a home. Yes, it’s a forced savings account and yes it can be more expensive to buy and maintain than to rent but you have to remember, if renting wasn’t so lucrative for landlords they would never do it. I agree, now is not the time to buy for most, but that doesn’t mean it will stay this way. Market conditions change and I am excited for the next opportunity. The most important thing is to stay out of debt and save so that when the opportunity presents itself, and it will, you can swoop in and take advantage. Lastly, there is no free lunch. Renters pay out of pocket for things that break and for general maintenance. It may not come right away but in general rent prices account for maintenance and increase as maintenance costs rise.
This is the first time I would say you are right. Normally it is better to buy than rent even if you are paying more because of equity earned. But with todays high interest rates, equity won't be hardly earned without massive interest until you are well into the middle of your payback period, and you may have wanted to sell before then. So short term in this economy, renting is better if it's cheaper.
I appreciate all you say about renting versus buying. I have bought and sold many houses over my lifetime, (Four houses in varies parts of California, 2 houses in Oregon, 2 houses in Hawaii, and now what I believe will be my last house in FL) some I broke even when I sold, one I sold at a loss, most I made some good money on, which I in turn put in a new house. I haven't rented since I was in college, mostly because it was never easy for me to find a good rental. That was always my experience, hard to find a rental in a nice neighborhood and in one place the rent increase forced me to move which sucked during finals. I moved home for a while, and then I got a dog, and then finding a rental was impossible. I have since always had pets so for me, a rental was an impossibility. Now, I notice more places are pet friendly, so you are probably right that if someone is not going to stay in the same house for 40 years then they should rent. My parents paid 60 grand for a house, stayed there forty years, sold it for a million. That was a great return.
Those Boomer days are now gone... nearly no normal person will enjoy such a return ever again thanks to greedy bankers and local government and their developer friends. Millennials are screwed and they know it.
That’s a big key difference between people today and previous generations as well. People don’t stay in the house for 40 or 50 years anymore. If everyone still did that and I would still be telling people to buy.
Your first example applies to a lot of people in volatile industries. Poker players are a great example.. they’ll buy a house just so they never are totally broke
Here on Long Island, the lowest, "affordable" rents in halfway decent areas are between 2,000 to 2,500. That would take 66% of my take home pay. So how exactly would I save money, move into a ghetto? All the new housing is "luxury" and run between 3,000 and 7,000, and that include 55+ communities. Unsustainable is an understatement. And the giant pink elephant in the room is the excessive foreign population that has flooded into our country, courtesy of "our" government.
Im buying a little place in a 55+ community paying it all in cash, enjoying my life and having no mortgage going out to dinner whenever i want, and hitting the casino's when i want and not having any bills other then electric because its in Florida and HOA fees at around 600 a month, my Lawn is included and trash, and cable, in the HOA fees.
