[Mortgage Is ‘Just A Fancy Bullsh*t Word For Paying Rent For 30 Years To The Bank,’ Says Real Estate Billionaire Grant Cardone — Here’s Why Renting Could Be A Better Financial Move
](https://finance.yahoo.com/news/mortgage-just-fancy-bullsh-t-171148202.html?guccounter=1)
He assumes an average monthly rental cost of $1354, and 3% rent increase annually. I have lived in apartments where they increased the rent 10% one year and 15% the next.
Even putting that aside, ok, by the time you’re dead, say it works out to the same amount spent. But as an owner, you’ve now invested in a generational asset. Renting now means your kids and theirs will also likely rent.
Gtfo.
I’d kill for my rent to only be $1354.
That’s about my mortgage payment.
You’re forgetting that elder care will eat up that wealth.
Which is the problem we have: For way too many people an asset capable of depreciation is their main or even only retirement savings. So reducing the price of housing will be a problem for a lot of local and state taxpayers.
Not saying it’s right, just saying how it is.
Wait - can you explain this further?
Why depreciating asset?
Also, they probably aren’t selling it right? Just using as a rent-free option after paying mortgage to lower cost of living?
What am I missing?
If we increase the supply of housing, the price of existing stock will go down. Heck, if we keep hedge funds out it might go down, or at least not increase as much as it would.
What pays for the elder care without that wealth?
The state subsidizes their nursing home. That article is false at least in my state.
They do that here in Australia too (probably better than the USA) but there are way more people seeking placement in aged care homes than there are beds available. Waiting times are in the years and so people end up on the street. Especially with the way rent and cost of living is these days. Government pension doesn’t pay enough to rent anywhere.
Even if the subsidise, they still have to find something open in their price range.
The highest population experiencing homelessness is boomers and more and more of the elderly are on the street now.
At least they can sell the house. /s, but not.
My rent has gone up at least $50-$100 a year when renewing my lease since I’ve been an adult renting a residence. In 2015 when I got my first apartment it was $750/month, utilities included except for electric and internet. 2 apartments later and an increase every year, I’m paying $2,000 month plus all utilities and fees for trash. It ends up being like $2350/month all said and done. And sure it’s a nicer place, but it’s not that much nicer. I’m so thankful I don’t have kids, because I can’t afford to feed myself, let alone children. I don’t know how parents are doing this right now.
My mortgage is about that, on a 3 bedroom home, because I was fortunate to buy it in the mid-10s before prices in my area went insane. Our original mortgage was about $1150, but it’s gone up $200 due to property taxes over 8 years. This averages an increase of $12.50 per year, but I know people whose rents have increased by $200 in a single year in my city. Getting a fixed rate mortgage (and refinancing when interest rates are low) is so much more stable than renting
owning several properties for renting and not needing to actually work is the real fancy bullshit.
did anyone tell that to this leech?
“I love renting. I never have to fix anything that’s the landlords job”
To
“Landlords do NOTHING”
In a few short years.
Tenant: “Hey landlord, my furnace isn’t working anymore. Fix it please.”
Landlord: Makes one phone call to a contractor and uses 10% of this month’s rent to pay them
My landlord makes maybe two phone calls like that a year, and she will have “earned” $40,800 of my money. Somehow, people like her have convinced people like you that simply owning a home that and doing 1 hour of cumulative work once a year is worth 30% of an engineer’s income.
Fuck off, leech.
I’m honestly just gonna block this guy, I recognize the username and after scrolling through his comments it appears I’ve downvoted him many many times
“Freedom is overrated, people are happier when they pick cotton.” Slave Owner
At least you get something in return for “paying rent” to the bank. Paying rent to a landlord is just paying someone elses mortgage, for no return whatsoever.
Also, your mortgage payments don’t go up every year, assuming you’re not a moron and got a fixed rate mortgage. And eventually they stop altogether.
Good luck getting a fixed-rate mortgage these days though.
I gotta renew and I have access to both fixed (6.08%/5y) and variable (6.80%/5y) rates.
The thing about variable rate is that it will not change your monthly payments when the interest rate changes, it changes the amortization (ie: how fast or slow) you’ll end up paying your mortgage according to the interest rate.
It’s a gamble though, personally I’d rather go with fixed at the moment. I did save a bit with the variable rate when I renewed in 2014 and the interest rate ended up going down.
Wdym?
I mean they’re really hard to get now. Even with really good credit.
Maybe I’m misinformed but I believe anyone can get a fixed or variable mortgage of whatever term they choose - the part that is negotiable is the rate on that debt.
So like with good credit or a bigger downpayment you can get a lower rate, but either way you can still probably get a 10% 5y fixed I think almost anywhere.
(I might be off - haven’t looked at rates in a while)
PS. Sorry about that other rude person. There’s nothing wrong with not knowing something, as long as you’re willing to learn
That’s not true in the slightest.
Lmfao.
No they’re not hahah No wonder u don’t own a house…too dumb
That’s uncalled for. I’m dumb as shit and I have a house. Didn’t even know what amortization was when I bought
Having a landlord be responsible for home fixes and appliances is pretty nice to be honest, provided they aren’t a shit landlord. I have a mortgage now which is nice, but the additional headaches are real.
Personally I really like doing my own home repairs and such, I get a lot of satisfaction and even though I’ll grumble and curse the whole time and will often procrastinate on some of my projects, I do really enjoy myself the whole time I’m doing it, even if I don’t always admit it. It kind of drove me nuts when I lived in my apartment and I wasn’t allowed to do a lot of the little repairs and upgrades I wanted to do myself.
But I can definitely appreciate that it’s not a thing for everyone, and because of that it really pisses me off that a lot of landlords, property managers, HOAs, condo associations are so shitty because there’s a lot of people who it frankly doesn’t make sense for them to own a home and be responsible for the maintenance when they don’t have the skills, time, or desire to do it themselves.
We bought my mother in law’s house, she had a whole bathroom that she basically didn’t use because the toilet had a small leak and the aerator on the sink faucet was clogged up with lime and sediment. That took me maybe $20 worth of materials and an hour and a half to fix counting the time it took me to drive to the hardware store with some built in time to wander around gawking at tools I don’t need. She’s someone who probably shouldn’t own a house and would be better served with a decent rental situation, but that’s a lot easier said than done, so now I get roped into doing little repairs for her at her new place is addition to handling my own stuff.
It’s a generational thing. Back in the day, most knew common car, plumbing, electrical issues and their solutions. Nowadays, people consult YouTube and promptly forget it 5 minutes later.
The abundance of information, sadly, doesn’t mean everyone can discern good and bad advices. On top of that, there are a lot of bad advices.
It could also be the fact that a Mon-Fri 9-5 job just isn’t the norm and often isn’t enough for one to live for a majority of Americans, so they have less time to learn, then make those repairs. In addition, prices for tools and materials have obviously gone up, making those repairs more expensive than “back in the day.”
Say your AC stops working at the height of summer. You go online and download the manual from the manufacturer, follow the directions to diagnose the issue. Awesome! You know what’s wrong, you just need to make a special trip to the hardware store (maybe where you live isn’t close to one since brick-and-mortar is more and more rare) and you can’t afford to wait for it to be delivered. So you buy the part and tools required at whatever price they’re selling for there because you can’t shop around. You don’t have another day off until next week, so you try to work a little bit every day on it, but you’re tired from your two jobs and only have a few hours free every day really. You’re having to stop and start constantly so you never get any momentum going on the work and it’s taking forever and the whole time you don’t have air conditioning so it’s hot as fuck. You don’t really know what you’re doing so it’s slow going. You’re losing sleep because it’s so hot and at least one of your jobs is physical and tires you out before you spend an hour tinkering with it every night. The little time that you normally get to spend with your kids is taken by this repair, and it takes almost a full week, and you have to hope you didn’t make a small mistake, because again, you don’t know what you’re doing and you’re just going from the manual, like “back in the day.” Or you could just dip into the savings and hire a guy to come out and fix it in an afternoon.
But you’re right, it’ probably just kids these days.
One should discern between things that do require a technician, and stuff that doesn’t. I’d argue fixing an A/C unit is more on the professional side of things. But yeah, I agree with you - it’s cheaper to hire a technician than spend the time yourself.
Will you come fix my creaky floor? I have no money left and I’m too tired.
Right after I fix my creaky floor.
I also don’t know how to fix creaky floors.
It really depends on what part is creaking, but somewhere there’s a gap near the creak between the joist, subfloor, and/or floor that’s letting things flex. Gotta close that gap to stop the squeak.
Owning a house is definitely not for everyone, and having a savings account for emergency repair is a must. I tend to do most repairs myself, but I know my limits and will pay someone when I know I might screw it up.
I hate to tell you this, bud, but one day, you’re going to die. You can’t take that house with you. Use your money to travel, and live.
Same for that landlord, he can’t bring the profit he made. I’d rather make sure the money stays in my pocket than his.
Either I spend the money to pay the mortgage or to pay a rent, I’d rather have something I can live in and pass along to my kids.
I traveled quite a bit already, both for leisure and for work before settling down to have a family.
Yeah! Once you’ve spent all your money traveling you can just sell your… oh wait.
And you’re still going to die. Live doing what you want to do, or on your knees in debt before the bank. Your choice.
More like:
Live on your knees past retirement age or take out an early 9mm retirement plan before you’re too old to work.
“Renting makes me money.”
Okay, work backwards from there.
FFS these people.
Mortgages make the bank money.
If only there was some kind of large collection that represented the people that could offer loans for cost or near cost instead.
represented the people
Founding fathers laughing in corporate interests
You’d be surprised what they would support. Until the neoliberals killed capitalism there wasn’t really that much problem with the idea of governments running public services.
Hell, usury is a sin. Very clearly defined as such, biblically. You tell them the US government is in a position to act as an interest-free loan office and they probably wouldn’t have any real problems with the idea.
“Hell, usury is a sin. Very clearly defined as such, biblically.”
Ayyyy that would be a wonderful thing to bring up to a Dominionist Republican and watch them struggle between “need to force people to believe we’re a religious nation” and “we cannot give the people services, they must pay.”
Well you see this Old Testament rule doesn’t matter because it benefits their owners.
Until the neoliberals killed capitalism
Capitalism is very much not dead (though it does smell rotten)
It was a bit of an oblique reference to The Man Who Broke Capitalism by David Gelles, I just like to imagine it was murdered instead.
Oh, I have something to say about this.
About 7 or 8 years ago I bought my house. I had friends of mine showing me articles that basically had the same “renting is better than buying” message bullshit.
You don’t really need much brain power to understand that is absurd. Paying loads amounts of money for something that will never be yours is obviously stupid in the long term.
The thing that made me very upset at the time is that my friends drunk the cool aid of these very same article and didn’t buy a property when they had the chance… Now, 8 years after, they are all struggling to buy properties except now is a lot more expensive.
The house you live in should be YOURS and no-one else.
Bought around 7 years ago as well, got told the same things. I said I was taking a bit of a cost hit now to lower my costs in the long term because my mortgage payments will never go up the way my rent payments were.
Fuck me I had no idea things would get this bad, and boy am I glad I got into a home when I did. It really shouldn’t cost that much to rent, this shit is absurd.
I agree that it’s better to own for 95% of the cases, but some of these people talking about renting being best might have been through the '08 crash. With China having their own financial crisis, we could be in a bubble because they invested a lot in US real estate. If your underwater in your mortgage (your mortgage is higher than it’s worth), you do feel like you’re drowning.
I’m not trying to scare anyone, but there is no guarantee that anything stays the same. I also hope people who are buying for the first time understand the different types of loans and they should 99% of the time want a fixed rate.
In a very specific scenario, with a very large amount of running the numbers, as a high income person with low personal expenses and a very good investment advisor, I could see how in certain situations/locations where mortgage rates are much higher than rental rates, that you get better fiscal results investing than paying that mortgage. That was a very rare situation 7 years ago, even more rare now. Where I lived ten years ago, I could not possibly afford the mortgage but I could the rent. These days there the situation has reversed and they’re both sky high regardless.
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You are always paying property taxes forever. You are also always paying the owners insurance policy. How are either cons?
The landlord is not going to pay either out of the kindness of their heart. It’s in your rent. And then you have to buy additional renters insurance - if you want that.
So it comes down to moving being expensive if you want to, or have to. And it makes more sense to store the million your pops gave you in the stock market.
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In any ideal scenario, renting would be preferable to buying for the vast majority of people.
The reason buying crushes renting, in terms of value, is that the value of housing (and thus the price) continually rises. Homeowners get equity and renters get fucked.
This happens because we literally are not allowed to build enough housing. This makes owning a home an investment.
I’ll give you three guesses as to what bloc of voters instituted those restrictions, and continues to fight for them today.
We are in the actual thread that tells you why there’s a problem, it’s corporations and investment funds buying up all of the available supply. We might be tight on supply if we got rid of all of them doing that, but it wouldn’t be a crisis.
Buying up supply happens because of what I described above.
If housing isn’t the most reliable investment you can possibly make, then there is less incentive to buy up all the housing.
This program is fine. Whatever. Every little bit helps and I’m not looking a gift horse in the mouth. But it’s a band-aid on a bullet wound
We might be tight on supply if we got rid of all of them doing that, but it wouldn’t be a crisis.
This, however, is flat wrong, because the crisis preceded the investment
I think you might be having a math problem.
Corporation Plan
- Step 1, US has a financial meltdown
- Step 2, corporations buy up all of the housing at cheap prices, price fix the rentals and use a shit ton of them for airBNBs
- Step 3, not worry about the empty units or homes because price fixing and airBNBs will fix that
- Step 4, develop a crowdfunding site so “investors” can get in on the renting/price fixing game
- Step 5, complain that there isn’t enough housing to get the zoning changed, so they can build “luxury” apartments where they continue to price fix or rent out to tourists/business people because they’re ToTALLy NoT A hoTEl!
- Step 6, profit, profit, profit
Common Person Plan
- Step 1, look to buy a home but there’s not enough supply so the prices go up
- Step 2, try to save but their rent keeps getting raised because it’s being price fixed and there is a lack of supply (sometimes real because of the tourists)
- Step 3, continue to rent while nervously waiting to try and build up a deposit and there’s less and less supply
- Step 4, rent, rent, rent further away from the city core
I really don’t because the economics here doesn’t change. You’re just trying to moral high-ground economic concepts, which isn’t useful for policy solutions.
It’s good for rhetoric tho, and we need to change minds, so it’s not a total waste.
You’re just trying to moral high-ground economic concepts, which isn’t useful for policy solutions.
What moral high ground? It’s easy to fix, make it so corporations can’t own more than a certain amount of units and corporations in general as a percentage of units in a city. If anyone has more than 4 airBNB units, you have to become a hotel. Simple solutions that won’t catch every instance but will make a dent.
“corporations bad” is a moral stance. It’s irrelevant to the underlying economics
We aren’t debating policy. we agree on policy.
I suppose my ideals are different: in an ideal scenario, I think buying is preferable to renting. But besides the problem of having enough money to get started with buying, renting gives a flexibility and reduced (outsourced to landlord) responsibility that’s very valuable for many people, especially in the short term.
By “ideal scenario” I mean a situation in which home prices do not reliably go up every single year forever
You don’t really need much brain power
Yes, yes. You’re very smart and special…
You’re not exactly wrong, but we should all be focused on the extremely wealthy and giant property companies that caused and are profiting off the housing crisis, yet people like you would rather jack yourselves off at your amazing foresight and laugh at anyone struggling. Kind of a Boomer response, no? Try to learn some empathy…
Well, the thing is you never really own it. Don’t pay your property taxes and insurance, see what happens.
Buying makes sense if you’re going to leave that property to children or relatives.
Well, the thing is you never really own it. Don’t pay your property taxes and insurance, see what happens.
What is the point of this comment? As long as you live in society you will be paying taxes. Death and taxes are the two global absolutes, and an argument could be made that death may be ultimately beatable.
I’m not anti-tax. I’m just stating the fact that in the United States, and many other countries, you never actually “own” your residence.
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Every time I see articles about this my knee jerk reaction gets more and more unhinged. Regardless, the world would be a better place if people like this were dead.
Thats the nicest way to say it. These people fucking suck.
They’re living piñatas and it’s time to pop em.
Give me a rental with a fixed monthly price for 30 years and I’ll consider it.
Yeah that goes down as keep paying it and can be leveraged against your debt, and is designed so you don’t have to pay rent when you’re retired
Also with a refund if you move out, in fact often giving you more money than you paid.
Fixed-rate mortgages are quickly becoming a thing of the past as well.
Just another ladder pulled up as we reach it.
Source?
If we built enough, this would be the end state.
If renting doesn’t make sense at half of what it costs to pay the mortgage, how does the mortgage make sense
Where on earth is renting cheaper than a mortgage?
Let’s say it’s in Orange County where the house is $800 grand," Cardone said. "You’d have to sell the house for $2 million just to pay the interest bac
As opposed to paying even the same in rent, where you get NONE of it back?
assuming a 3% annual increase in rent
Lol, what planet do they live on?
On that 800k house, it takes a little over 30 years to get 2 million out of it if the house appreciates at 2% per year. Housing in many places has appreciated much faster than that (much faster than the market or any other single thing, including cryptocurrency)
And this is why we have a housing shortage. Because it’s in the financial interests of owners to restrict the building of housing.
In high CoL places, rent is routinely much lower than a mortgage— not to even mention the incredible down payment that you have to get the loan in the first place.
As an example, a one bedroom apartment in SF would cost you around $1,000,000 to buy. If you somehow have $200k to get a mortgage, your monthly payment is about $6k. To rent that same apartment, you’d only (lol, only) pay ~$3000-4500.
On top of this, the cost of owning is higher than just your mortgage payment. Your lender will most likely require homeowners insurance which can easily run a few thousand dollars per year (compared to a couple hundred for renters insurance). You also have to pay for the big repairs yourself when as a renter if the heat breaks that’s the landlord’s problem.
This is me. I live in LA, near Hollywood. I pay 3k/month in rent for a 1200sq ft 2br apartment that’s close to everything.
A condo similar to my apartment (it was a condo conversion of a building similar to mine) in my neighborhood sold for almost a million this past year. That’s about 6k/month all in w/ taxes and whatnot, not including maintenance costs.
Why the fuck would I pay double to own the same thing, and lose all my flexibility, when I take that 3k difference every month and invest it. Which builds wealth too. Sure, my investments may not be as inflation protected as a home, but they’re a lot more fucking liquid. And I can move in 30 days no unsold house hanging over my head.
In Australia and most developed cities in Asia rent is cheaper than a mortgage.
Do mortgages function the same in those Asian cities?
I mean you could compare the ‘monthly payment’ on Jenose in Korea but it’s not the real number. It’s not comparable.
This is not correct for Australia.
I’m looking at places in Melbourne at the moment. A 1-bedroom place is around $450 a week or $1800 a month roughly.
You can easily get a cheaper mortgage than that for a 1 bedroom place. Potentially even get a 2 bedroom unit for same as you’d pay in rent.
Guillotines.
And he personally owns how many houses?
And coincidentally wants people to rent them.
To be fair, I doubt he has mortgages on any of them, so while he may be a dumb asshole, he’s not being hypocritical here.
There is no right or wrong answer when it comes to rent vs own. Do what is best for you
What I will impart to people here though is always look where the message is coming from. Therein you glean some of the answer.
There is no sight or wrong answer when it comes to rent vs own. Do what is best for you
Putting money into your own ownership, versus putting money in for somebody else’s ownership, is a very straightforward scenario examination, to determine which one is better for you.
Yes and no. Ownership is valuable. But the flexibility to live and move with less responsibility is also valuable.
Yes and no. Ownership is valuable. But the flexibility to live and move with less responsibility is also valuable.
It’s not a matter of responsibility, you’re responsible for making a payment each month, either way, so that cancels out.
Your paying the same kinds of money out of pocket each month in either case. You might as well own what your emptying your wallet for when you’re done, than not. Wealth begets wealth, it snowballs.
You’re going to spend (usually a bit) more per month on mortgage payments than rent, so it’s not really “the same kinds of money”.
Is this true in the US? Its definitely not been true anywhere I’ve lived in Europe. A mortgage has always been cheaper for a larger property, it’s just gathering the initial deposit to buy that’s the hard bit.
gathering the initial deposit
In the USA, you no longer need a large deposit. Many lenders will go all low as 3% down. You pay extra fees each month when you are under 20% down though. Since most people can’t afford the 20% down, they’re stuck paying more each month.
Yes, generally in the USA you pay less to own than to rent if you put the 20% down. The other cost of ownership (maintenance and repairs). If you add those in, owning us still usually a bit cheaper. Renting, however, stabilizes the monthly cost.
Interesting, I didn’t know about the low deposit requirements. I haven’t really seen it below 10% over here, but it might well be possible.
It also depends if you’re in cities or not I guess. My first house was in a small city and the rent wasn’t bad there, it was just desirable to buy if possible. The next two cities I lived were capitals and rent is out of control there. Though house prices are too in those situations, so buying a place is usually cheaper but unattainable.
Not true from my experience. When I bought my house rents for similar houses were about $1.2k/mo and my mortgage is ~700/mo (which after taxes and insurance came out to ~$800/mo) but the other $400/mo can be easily eaten by maintenance costs depending on the year.
But what I haven’t seen pointed out yet is that the mortgage will stay the same for 30 years, property taxes & insurnace won’t grow much, but rents will continue to climb. It’s been almost 3 years and houses similar to mine are now renting for $1500/mo or more but I now pay ~$900/mo for my house due a small tax increase last year that narrowly got passed (and was noted when it was proposed to be the first property tax increase in quite a few years)
That’s true, I didn’t really think about maintenence costs adding on. Ideally that stuff should add value back to the house so you don’t “lose” it like rent, but that all depends on the housing market forever rising to infinity.
A mortgage has always been cheaper for a larger property, it’s just gathering the initial deposit to buy that’s the hard bit.
What you commented is true in the US as well, unless you live in a very very poor neighborhood and rent.
In understand your point. It costs money to buy, sell, and broker house/mortgage. People have to live in their houses (in a normal economy) for like 3-5 years before even making a break even point on home. Just bought my first house and we’re drowning in interest at the moment. Rents will fall faster when interes rates change than we will be able to refi. BUT it’ll be better for us in the long run.
It costs money to buy, sell, and broker house/mortgage.
Its true that you need to save up the initial down payment. But in the long run it’s smarter to do so, than renting.
People have to live in their houses (in a normal economy) for like 3-5 years before even making a break even point on home.
It’s definitely not a short-term investment, unless you really try to play the real estate market.
But I’m not speaking towards trying to turn a short-term profit, just not having a short/long-term loss.
Put it another way, whose mortgage would you want to pay off, yours, or someone else’s?
Finally, real estate prices continue to always go up, so even if you had to sell short-term where you’ve been paying mostly interest you could probably sell the property for more value to make up the difference.
Just bought my first house and we’re drowning in interest at the moment.
All home loans are mostly paying interest up front, it’s not into the later years of the loan when you start paying substantial principle payments.
A neat trick is to always make an extra small principal only payment with each month mortgage payment, and that can change a 30 year loan to an 18 year loan.
Just make sure the write in the memo field on your check “principal only payment”, or else the loan company will try to just take that extra money and put it on the interest only portion of the loan (they’re tricky that way).
Rents will fall faster when interes rates change
Historically rental costs have always gone up, and not down.
Did you mean the monthly mortgage payment amount on a home loan?
BUT it’ll be better for us in the long run.
Ownership truly is better.
This is all neglecting that after that 18-30 years, you don’t have that payment. Also, if you get a home that is much closer to your annual income, you can pay it off in a much shorter time. With the way properties are going right now that is almost a joke to say, but here I am, living on a dream. Also, having dealt with slumlord landleeches charging me $1k/month for a house that would have sold for $30k five years ago, I can honestly say that I never want to be subjected to a landlord again. Banks may be scummy, but they are heavily legislated scummy. Also, I would much rather be responsible for my house than some asshole. The house has mold, sparking outlets, the foundation is cracked in multiple locations, and huge cracks are forming in all of the walls as the house warps working towards collapse. And when I brought this all to the landlord’s attention they tried to illegally evict me and raised my rent by $125/month. We immediately started viewing new places. My wife is pregnant, and if that baby has a single birth defect I am suing these two into oblivion.
This is all neglecting that after that 18-30 years, you don’t have that payment.
I don’t understand this sentence?When you’re done with the loan and it’s paid off you don’t have to make any more payments, so I’m not sure what you’re trying to express?Edit: I understand now. It was implied in what I was saying, so not being ignored. I was assuming people would know that when a mortgage is done being paid off you no longer have to continue to make payments.
Also, if you get a home that is much closer to your annual income, you can pay it off in a much shorter time.
Oh totally agree. I was suggesting 30 because most people seem to only have enough money to make a down payment on a 30-year loan. If you can get a 15-year loan that’s much better.
I personally always got 15-year loans, because with those loans you end up paying the least amount of interest on. Thirty year loans are horrible, considering how much interest you have to pay versus principal, which is why I would suggesting you try to pay it off faster than the 30 years by paying a little bit extra every month with extra principal payments.
I think you’re neglecting to factor in the opportunity cost of investing that down payment over time. Granted most people don’t have the necessary discipline so I agree a mortgage is a great way to force yourself to invest and probably best for most people.
But I’m not convinced it’s going to make you wealthier in the long run vs putting all that money saved for a down payment in broad market ETFs and staying disciplined about it.
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It’s not just money. Ownership means taking care of the house, and dealing with the buying/selling process. Would you advocate that university students buy a house for three years then sell again?
A good rental means you’re paying the landlord to take care of things for you.
I agree in the long term, since we always need somewhere to live, that personal ownership is better; but if you’re moving a lot, or perhaps depending on your job situation, I think renting is a valuable service for many people.
Would you advocate that university students buy a house for three years then sell again?
Assuming a university student had enough income, yes, most definitely. But most people buy houses after college, as they are busy paying for/off college first.
But realize that monthly rent payment is going to be about the same price as a monthly mortgage payment.
I agree in the long term, since we always need somewhere to live, that personal ownership is better; but if you’re moving a lot, or perhaps depending on your job situation, I think renting is a valuable service for many people.
Well just realize that you’re losing money by taking advantage of that service, and then, yes, it is valuable service, but also a more costly service.
Is it more convenient for you to have food already cooked delivered to you? Yes, of course. Will it cost you more money, will you lose more money, than if you went to the grocery store, got the ingredients, brought it home, and cook the food yourself? Most definitely.
The point I’m making is don’t pay somebody else’s mortgage off, pay your own mortgage off.
A good rental means you’re paying the landlord to take care of things for you.
While strictly true, and I do not mean to be insulting, but that is a very financially dumb thing to say.
As I mentioned previously, you’re giving your money to the landlord so that he can earn more money for himself, versus getting your own property and earning money for yourself.
Make your money work for you, and not for someone else. You earned that money.
Is it more convenient for you to have food already cooked delivered to you?
I mean, that’s exactly my point. Services exist to cook and deliver food. Sometimes they’re desirable, sometimes they’re even economically profitable for the customer.
Housing is different from food, and more important/worthwhile to own. But housing-as-a-service is still, I think, a valuable option to have.
In my experience, financially it’s also a valuable option.
Make your money work for you, and not for someone else.
And yet, money is nothing in itself, unless you’re a true capitalist. You’re giving money to a landlord for him to provide you a service. You could instead invest that money in property and do the work of being your own landlord, and reap the benefits of that too.
And yet, money is nothing in itself, unless you’re a true capitalist.
I f’ing hate bots/people who waste my time with nonsense.
Afaik the mortgage market (setting mortgage payments, type of mortgage: fixed vs floating) is one of the more efficient markets. So choosing rent/own might not be such a big dilema.
Current state (continuous rise of home prices) is, however, concerning. It used to be that USA’s flexibility to move (and refi) was its great advantage (in labor market).
Grossly oversimplifying home ownership.
It was a Lemmy comment. I don’t think you should expect a college course lecture on the subject.
Ultimately though, the comment stands. You’re either enabling somebody else to be more wealthy, or you’re enabling yourself to become more wealthy. The choice is yours.
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You’re either enabling somebody else to be more wealthy, or you’re enabling yourself to become more wealthy. The choice is yours.
I know you’re just stating an opinion, but that last sentence is downright insulting to me.
(I’m including above the whole statement and just bolding the part that you included when you did your reply.)
I meant no disrespect. I personally was a high school dropout from a broken home (and the emotional baggage that goes with that) but was still able to purchase a house, so I know it’s doable.
Having said that, I wasn’t judging you personally. I wasn’t even addressing you directly. I was just expressing a generic opinion about the pros and cons of purchasing versus renting to a wide audience. If that statement felt like an insult to you personally, then you need to look within.
I wish you well and happiness.
Privilege on display.
its kind of not. we own now. its great. everytime we pay our mortgage, which feels exactly the same as when we were paying rent, we are in essence saving that money as we get it back when we sell this place (which is all contigent on how much its worth when we sell etc).
when we were paying rent, we paid the landperson’s mortgage off month by month, making themmrew wealthy. upkeep is always a part of everything you own.
Spoken like someone who has never had a surprise maintenance issue pop up unexpectedly that costs multiple times your monthly mortgage.
True, you need to be able to afford to home while you’re living in it, but you make all of that up and more when you sell the property.
Also, your “costs multiple times your monthly mortgage” comment is a rare thing. Usually its just a couple of hundred dollars type of repair, and its a few times in a year.
fuck are you talking about? you don’t know anything about me or my house. every house, especially old ones like my late 1800s cottage, needs major repairs. people on the internet making presumptions, so nice to be here.
I mean, that’s kind of how it used to be. “No right or wrong answer, do what works for you.” I wasn’t really in a long-term career at the time so I rented, as a choice. Now housing has gone up so much, almost no one my age can afford to buy a home. And because we’re locked-in to renting, property owners are raising rents, every year to increase their profits. And because we’re all spending so much money just for shelter, we don’t have it saved up to purchase even a cheap home. It happened to me several years ago, it happened to me during the pandemic, it happened during crazy-high inflation, and it’s still happening. They know they have a (almost literal) captive audience. I can’t even afford to move to a different area, and if I did, who’s to say they wouldn’t also start jacking up my rent after the year-long lease is up.
My other choice is to live on the streets. Home-ownership isn’t perfect and has its unique challenges, but ultimately it gives you something renters don’t have: stability and security. We’re fucked…
I mean, you do also have the option of moving to an area with cheaper house prices, y’know leaving behind all of your friends, family, favorite places etc. plus you’d probably have to trade the cost of your home for driving a lot more and therefore buying cars more often if you move to small town America where houses are affordable.
Not to mention leaving behind your source of income…
Are…are you me?
he didn’t become a real estate billionaire by telling people the truth about real estate
Nah I’m sure he rents his house
“Anything but paying me and making me rich is bullshit” - Toddler billionaire throwing a tantrum.
This is not the first time I’ve seen media stories within recent years pushing this idea that renting is better than buying.
This is the absolute stupidest most transparent lie the rich are trying to pull to fuck us. Sure we don’t see all the shady shit with lobbying and and all the details of inflation bullshit. Those are easier to keep mysterious and hide the exact details.
But this rent thing, that’s the dumbest most demonstrably false lie they have ever tried to spread. If anyone is believing that shit, god help them.
We bought our house seven years ago. If we were to sell it today we’d make almost as much in profit as what we paid for it.
Very similar situation here. It was a huge stretch to get it, and I was skeptical, but my partner pushed hard for it and everything got better after we got a house.
Nevermind that we put all of our consumer debt on the mortgage when we renewed, even our mortgage payments are by far lower than anything you can get in town.
It’s crazy seeing materially, exactly how greedy landlords are when I friend of mine in a tiny two bedroom is paying almost double what I pay the bank for a whole ass house.
We bought our apartment 10 years ago, if we were to sell today we’d be lucky to get what we paid for it. That’s because we’ve just had a repair bill come in for about the same amount.
Still prefer owning to renting though.
if we were to sell today we’d be lucky to get what we paid because we’ve just had a repair bill come in for about the same amount
That’s significantly better than what you’d have got out of renting, i.e. nothing.
So worst-case buying is far better than best-case renting.
Apparently equity is not worth mentioning.
To me, the big draw to renting is the flexibility. It’s easier to move if you find a better deal elsewhere or you need to move for a job. It’s especially attractive in many European countries where a lease is “unlimited” and doesn’t run out unless you cancel and there’s only a three-month cancellation period. Makes it very flexible.
A bit different in the states where the lease term is set, usually at one year and then you renew and have to pay to break the lease if you move out before the end of the lease. But still more flexible than buying.
A quick sale is much more involved and risky, imo.
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