Rental property billionaire says buying a home (with a mortgage) is "fancy bullshit" and you should rent instead
[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?
They get kicked out on the street. ‘Unconscionable’: Baby boomers are becoming homeless at a rate ‘not seen since the Great Depression’ — here’s what’s driving this terrible trend
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.
"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.
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.
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.
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.
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.
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.
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.
Also with a refund if you move out, in fact often giving you more money than you paid.
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
Fixed-rate mortgages are quickly becoming a thing of the past as well.
Just another ladder pulled up as we reach it.
If we built enough, this would be the end state.
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.
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
This, however, is flat wrong, because the crisis preceded the investment
I think you might be having a math problem.
Corporation Plan
Common Person Plan
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.
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
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.
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.
Where on earth is renting cheaper than a mortgage?
As opposed to paying even the same in rent, where you get NONE of it back?
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.
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?
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.
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.
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.
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.
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.
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.
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).
Historically rental costs have always gone up, and not down.
Did you mean the monthly mortgage payment amount on a home loan?
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.
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.
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 was tacitly contrasting it with renting. After 30 years of renting, you still are going to be paying rent.
I was less commentating on the term of the loan and more on the total principal value. That said, for some insane reason, a 15-year mortgage also has a lower interest rate, so it is fundamentally the better option. But even with that, if you make $50k/year and are able to find a livable property for 75-80k, and get the 15-year, ostensibly there is little in one's way from paying it off in 7 to 10 years. Unfortunately livable houses for that price don't exist anymore for most of the US and making 50k is still a pipe dream. I don't even make that much and I have a Master's degree.
Not for everybody, but I’ve heard reasonable advice of getting the mortgage at a longer amortization period, then making extra payments. When I was looking it was typical to be allowed to increase the payment by 10-20% or to make additional payments up to 10-20% of the initial loan amount each year without penalty. That’s enough to potentially be paying it off in under 10 years without penalty(which is often in the range of 3 months simple interest, so still worthwhile if you unexpectedly come in to some money), but also gives you the flexibility of going back to the minimum payments if your financial situation changes.
Renting does make it cheaper/simpler to change accommodations though. Think things like starting a family and wanting to scale the household up from just two people to adding children and down again when those children move out. Renting makes it simpler to move closer to work, public transportation, schools, Etc. as a persons needs change. On the other hand, there’s also a lot of financial benefits to living in your own home: grants/rebates available for homeowners, not rental properties, being able to save costs by doing your own maintenance/renovations, etc..
Honestly, I have been renting for a year now and it has been horrendous. I don't think it's worth it honestly. I am paying about double what a mortgage would be and getting a house that the owners refuse to perform any maintenance on. I'm not about to do it as that is sweat equity that they are getting, not me. With the modern trend towards treating rentals as an investment instead if a business/responsibility, the mentality of landleeches is moving more and more towards cost minimization at any expense. It is an undeniable downward spiral that needs to be halted by force. Unfortunately tenants don't have the ability to do that and when 40%+ of single-family homes that hit the market are being purchased by equity firms and slumlords, driving the prices on the remaining homes well beyond their real value, it is a recipe for disaster.
At the current rate and trajectory, in the next 10 to 20 years, more than 90% of adults ages 25 to 50 will be renters. As the boomers die, some percentage of their homes will be passed to children, but some percentage of those will go on the market for some reason or another, which some percentage will then be snatched up as investment properties again. This is a logistic process, and while it would be functionally impossible to get it to 100%, numbers like 75% to 90% are infinitely more possible, and in fact, probably, without real governmental I intervention. (I actually have an Applied Mathematics degree, so this isn't me pulling things from my ass)
The other thing I didn’t think of is renting makes it a lot simpler to share accommodations. A group of 2-4 people can split the rent on a property that none of them would qualify for individually.
Agreed that the current situation parallels a lot of industries in that it’s concentrating wealth in the hands of those that are already ahead and it’s difficult for new people to become part of that system. Personally, I think the solution for any of these essential goods/services is crown corporations, which creates a standard of service that private industry has to compete with instead of being able to collude to maximize margins.
Could you elaborate? That seems the opposite of all the advice I've ever heard of or seen with my own eyes.
Normally it's better to get a fifteen year loan, than a thirty year loan and pay extra to try to pay it off in eighteen years.
In the past at least it seemed it was a lot harder for people to get fifteen year loans than thirty year loans, which is why I was offering the advice of trying to pay a 30-year loan off quickly, as the next best thing.
If I may ask, what industry are you working in, that you have a master's degree but earn so little?
This is a whole different discussion than the one we're having about home ownership vs renting, but I don't think anyone who's established by the time that they are in their 30s would be making 50k, they would be making a lot more, somewhere past the 100K mark for most professions, in the US at least, major cities.
In any case, I wouldn't suggest purchasing a home if you only had that much income available.
Apologies if this offends in any way, it is not meant to.
No, I'm offended by the lack of ability to get a better job, not being asked about it. I have a BS from Kent State University in Applied Mathematics and an MA from The Savannah College of Art and Design in Visual Effects. I took a job 7 years ago when I graduated with a remote company because it let me take care of an ill mother and father so they could get through to their retirement, but it has trapped me in a low-wage situation. The job started at pennies and hasn't really made it to dollars yet. I am actively applying, but everything in my industry requires credits by this point in my career and I have none, and I look underqualified for the AI sector jobs I am trying to get because I don't have any on-paper experience there either. So I am a very well-educated bonified genius with verified earth-shattering innovations and capacity-altering skills trapped in a dead-end job with a startup that has never been able to take off high enough to pay me even remotely what I provide to them. I say the innovations are earth-shattering and verified because I have discussed them with people who know what they are talking about, but are not in a position to hire me themselves, and they have confirmed. One friend actually was trying to find me some investment money through his professional and social networks to pursue one of them because it would hit so hard, but his network was not connected to the right people.
I truly wish you well, citizen, truly. I hope things work out for you.
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.
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.
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.
It always does. Always. As long as babies are being made, it always will.
Every decade or two there's a crash, but it doesn't go down that much when there is, and then when it recovers from the crash it goes right back up to what it was doing before.
What you commented is true in the US as well, unless you live in a very very poor neighborhood and rent.
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.
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.
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.
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.
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.
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.
I f'ing hate bots/people who waste my time with nonsense.
My apologies. Apart from the value of exchanging with other people for what they can provide, and the capitalist dream of having abstract money, money does indeed have intrinsic value.
You can wipe your bottom with it.
Especially the coins.
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.
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.
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.
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.
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.
Privilege on display.
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.
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.
Aight let's see. Mortgage is a fixed rate over an agreed upon term that ends with you owning the property, rent increases every year, you have no control over the property and you get fucked constantly.
Yup, totally the same thing.
Also my mortgage for my 1/2 acre property with 1500 sqft house is $50 less per month than my 900 sqft poorly constructed "high end" apartment rent was about to spike up to. You know, after renters protections were removed during the pandemic.
Quick edit: furthermore, it took me until I was 30 to buy a house. In that time I spent 170k in rent, when I started renting the property I'm currently living in was worth 140k. That's pretty easy math right there. Just like... Come on.
But… but… but you still have to pay for maintenance and repair.
Ok I’m half kidding, given you still have to pay those things but depending on how the math works it can still be cheaper to own.
It's always cheaper to own given you live an adult life for at least like 15 years. The rub is whether or not you can afford the upfront costs to get a property.
Also you pay for maintenance and repair and taxes and all that nonsense in your rent, it's just one bill instead of multiple.
The thing is as a renter you basically pay for maintenance and repair anyway. If as a renter I damage a wall, I pay for it, if I leave the house messy when I vacate I pay for a cleaner out of my bond. If the place is freshly renovated my rent is higher to cover it, if there’s an unforeseen expense like a tap bursts, sure the owner pays for it.. but then my rent goes up 150 a week next year because of “market trends”
The simple retort to this is that every renter is paying for a mortgage: their landlord's.
But #LandlordLivesMatter!
Fuck em.
You're paying for a service that provides you a place to sleep for a term. The deal the landlord has with the bank is none of your business.
Many large rental companies don't even have mortgages. They pay cash for what they buy. So your statement is extremely ignorant.
Yes landlords are famous for renting at a loss...
Of course the amount of money that would go into a mortgage payment would go into rent. If they pay cash up front, they have a projected timeline to recoup that investment. The details about whether it's technically a mortgage payment is immaterial, the reality for the resident is that rent is higher than a comparable mortgage payment would be.
The only difference in amount is that the rent pretends the mortgage is infinite term, rather then rent getting cheap after the purchaser has recouped their purchase expense.
I think we should conquer his mansion and turn it into a commune.
His massive wealth is "fancy bullshit".
But what will your job be on the commune?
That's hilarious. One gardener and a bunch of people doing fuck all
Housing can't be both an investment vehicle and affordable. This guy is essentially saying "let's just nix the affordable part". Absolute vampire.
He's literally one of the people making home ownership unaffordable.
This turd should be one of the first to go
LMAO, considering big business is buying up homes literally for this purpose, I'll take what he's saying with a grain of salt.
Does that mean we should over extend on buying a house that's outside of our means? Absolutely not, but at the same time, housing is still way overpriced and since shit is barely regulated, both from a seller and a purchasers standpoint, there's a lot of regular people getting stuck with a lot of shitty options for living situations.
Just a grain? I say whole mine. I bet he "owns".
At least enough salt for 3 tequila
Grant cardone is one of the slimiest cunts in the billionaire class, and that's a high bar
You can safely discount anything he says, because it is always self-serving
Billionaire landlords breathing public air is just fancy bullshit. The air on this planet is not for them. They have not earned it.
Yeah but at the end of 30 years the bank lets me keep the place and they never raise the price
Don't forget the last 5 years is u basically using the banks money for free cuz of amortization.
As long as you pay the property tqxes and homeowner's insurance, and all the maintenance.
And you think the landlord doesn't factor that in the rental price?
He's certainly not going to rent the place at a loss.
Put him on the List.
Grant cardone is one of the slimiest cunts in the billionaire class, and that's a high bar
You can safely discount anything he says, because it is always self-serving
I also, like to troll the poors.
In other news, the job market is overrated and you'd all do better to come and work at my factory in perpetuity as indentured servants.
But you're not renting the home from the bank, you're renting the money you borrowed so you can own your own home
It is always wrong if you're saying to just buy or just rent. Neither is the better financial move for everyone.
I agree with that, you have to look at the interest rates, the housing market, the condition of the house and your own abilities to fix things while you're doing the numbers. But I do think that it is usually in your favor to own.
And also mobility. Young people move far more often than older people, and it's a hell of a lot easier to move when your lease is up compared to buying and selling a house.
I haven't bought or sold a house in a long time, hasn't it gotten way easier since there's such a demand?
Yeah, gonna call bullshit.
Bought this house 3 years ago, and my mortgage payment is half of what a comparable house would cost to rent. Mortgage payment includes property taxes and homeowners insurance. Plus I'll own it in 12 more years and can already use it as equity.
Yeah, that's the secret. The housing market was much better for buyers a few years ago.
The equity part is the big one. We were able to refinance and pay off a lot of our mountain of debt.
What's that, Madame Guillotine? You're hungry?
Guillotine is too quick. Draw and Quarter is all the rage nowadays. Upgraded for the 21st century, so horses are replaced by electric bikes.
Not really what you were going for, but I'm imagining a spin class where everyone is wearing executioners cowels and the head executioner is verbally pumping up the others for more power to pull the victim apart. Could have been a show in the Running Man universe.
People are aware that you don't have to live in a house for 30 years if you get a 30 year mortgage, right? That hasn't been a thing since the 80s.
Correct. Note usually says 1 or 2 years.
Grant cardone is one of the slimiest cunts in the billionaire class, and that's a high bar
You can safely discount anything he says, because it is always self-serving
"Debt incumbent home owners don't go on strike"
He's not exactly wrong. If you have a mortgage, you do not really "own" anything and essentially have a "landlord" through your lender.
You may not just be mad at renting/landlordism. Your ire may be for the generalized concept of private property.
If you have a mortgage, you own what you paid (except interests).
If you bankrupt and are unsolved on a mortgage, and they take the house, the house is sold in an auction, the bank gets what's remaining in the mortgage, but the rest is yours.
The point being that your place of residence, the place where you possibly stake your roots and raise your family, is not fully yours and can just as easily be taken away if you suffer any type of financial misfortune or fail to keep up financially with the market around your community.
The relationship to your lender is very similar to a renter's relationship to their landlord.
Equity is a benefit, surely, but indebting yourself for 30 years in a location you may have compromised for is the other side of it. And your relationship to a higher authority who truly owns your property remains (until the debt is paid, of course).
Inherently, it all comes back to private property and one's relationship with its owners.
Is it though? Landlords typically have hot opinions on what you do with the property. Banks don't care so long as you don't literally destroy it. When I rented I felt stifled in things like modifying my place, adopting a dog, painting walls, etc. Owning my place feels a lot better even if it costs a lot more.
I get what you say kind of from a financial sense but even then it's radically different. You can pay extra every month to get a mortgage finished early. Each year you get more and more equity and are in a better financial spot. When a lease renews your landlord has the option to say "I want more money, so you have to pay extra now" or just straight up refuse to let you live there anymore, and at the end you have nothing. And a foreclosure is a much lengthier process with more outs for a homeowner than an eviction is for a renter.
Except there is an end to those payments after which you do actually own the roof over your head.
Plus, the lender doesn't want to "renovict" you or pull any of the other bullshit that typical landlords try to get away with.
He's right as far as mortgages go, which is one of the most abusive financial albatrosses a person can wear. Nobody tells people that they're going to actually pay 3 to 4 times the amount they bought the house for when they sign the papers.
But where does he even get the idea that rent is less than a mortgage at this point? That's sure not what it looks like to me.
You only pay 3-4x what the house is worth if you stay in the house for 30 years and pay the minimum payment. If you pay extra on the principle - because your income went up over the last 10 years - you pay less. If interest rates go down in that time and you refinance, you pay less.
Never pay extra on ur mtg omg!!! Keep your capital liquid!
Your second to last sentence is simply not remotely true! Your last sentence is only true in certain cases.
Cancer-free is “just a fancy bullshit word for not mortgaging your house to buy my medications,’ says cancer drug manufacturer. Here’s why having cancer could be a better financial move (for me).
It’s the Catalina wine mixer
My mortgage in a HCOL area is around $1350 month (excluding anything else) for a ~350sqft studio. Rent for something similar in the same area I live starts at around $1500 on the cheap end.
The only way you’re saving money with buying vs renting is if you’re not paying a single cent on utilities in the place you are renting (which is highly unlikely around my area). If you’re paying for your own water, electric, internet, and whatnot, you’re basically paying the same whether you buy or rent.
Right but the difference is your rent goes up but your mortgage stays the same.
Yes, but I explicitly said mortgage only without including utilities, taxes, and insurance if you have to pay that separately from the mortgage. Those things can (and most likely will) change - albeit usually not to the degree that landlords love to pricegouge on rent.
Like, take my same place again as an example. I only pay like $1350 for a mortgage, sure, but I also pay ~$600 in utilities and maintenance fees. My monthly payment to live in a normal environment is short of $2000 a month. My fees will go up again an extra 2% starting next year, so I am paying more - not that much, sure, but it is more. If I was renting a place for $1500 and didn’t have to pay for utilities, even a 20% increase from $1500 to $1800 would still be absolutely cheaper than buying my studio. Renting becomes fucked when landlords go “yeah, pay $1500 a month and you also have to pay for your utilities. Also I’m increasing the rent next month by 20% lmao get fucked nerd”.
This is, of course, just looking at cost. That’s ignoring the fact you’re paying a mortgage to own something versus paying somebody else’s mortgage or just lining their pockets.
Okay
Fuck that. It helps build generational wealth. Something this fuck stick doesn't want you to do.
depending on the market and the area, a mortgage might be cheaper - often this is not the case though
Well, yeah. Why do americans all think they need to buy houses? Implement good renter protection so people can rent without worries
As soon as Biden stops the money printer the whole market is going to crash like in 2008 until then enjoy mass inflation.
Inflation is already below long term averages. Got any more takes that defy data?
Yeah we heard these amazing takes in 2008 too.
The avarage American spending power doesn't seem to agree with you since nobody is buying houses and Genocide Joe now wants to give away house buying money to prop up the bubble.
As soon as Saudi jacks up the oil prices the American economy is going to freefall.
Maybe we could ban hedge funds from owning houses?
This would fix the issue but the hedge funds bribes on congress will block this.
Not exactly the wrong message but definitely the wrong messenger.
Wrong message and factually incorrect.
How? Mortgage is the same risk exposure as rent with a "landlord" who holds even less responsibility to maintain the quality of the place than in a rent arrangement.
A loan is not the same thing as rent, see the other response for a start on details.
No.
Rent will be a bit higher than comparable mortgage payment.
A mortgage payment actually ends one day.
If you move out, you get to sell your house and get a lot of money "back" compared to renting, maybe more than you put in even.
Even without selling, you have "equity" you can leverage to have secured debt at very attractive rates.
Absolutely, 100% the wrong message, because it isn't correct even slightly.
How exactly? A mortgage is in practice rent to the bank, complete with them getting to evict you if you turn out to not be able to pay, not to mention that the landlord at least hypothetically is responsible for providing repairs and appliance replacements.
How? Because in about 1.5years, I will own outright the house that I'm "renting" by paying off my mortgage. When's the last time you can say that about some spot you were renting?
Also, my "rent" is about 5x less than any renter in the area is paying for a similar house.
I live in a 5br 3ba house on 5 wooded acres inside a national park.
My mortgage is about halfway done, the house is currently worth about 60% more than I paid for the house and the total rent (ahem, excuse me) MORTGAGE PAYMENT, including escrow for insurance and taxes is $1790 a month.
I live 22 miles from the Washington Monument as the crow flies.
And you think I'd be as well renting an apartment?
This house rents for more than double what my mortgage costs, and at least a third of that payment is expenses that will always exist (taxes/insurance)
Utliies range from $77 to $220ish per month.
This is a whole lot of privilege.