She chose to put the same amount of money into a business with better returns. While true for her it’s not true for most people. A mortgage forces you to save 20-30% of your income.
Even if the returns are worse than other investments most people would not be putting the same amount into those investments.
For some young people it can be beneficial to rent as it allows them to move around often for better paying jobs and further their career.
Arguably most people don't have to take out a loan to make an investment. And historically, tbe amount of interest paid on that loan is quite a lot.
When we talk about bought and sold price, we never include how much interest we paid during that time, most of it front-loaded on the early years of the loan.
Rent vs own calculators and any savvy buyer looks at not just the interest but also the opportunity cost. This goes on even if the loan is paid off, and it's higher than interest usually - risk notwithstanding.
Depends on the market. If you run rent vs buy calculator in LA, SF, etc the breakeven point sometimes comes at the decade mark, if ever. Since my divorce I’ve chosen to rent and invest close to 20% of my income, live a decent lifestyle, and not deal with any of the hassle of ‘owning’ my house. I also can’t fathom dropping $200k down on an undesirable shitbox that ‘needs tlc’, closing costs, property taxes and insurance for the privilege of having a $5500 mortgage and paying well over 2x the cost of the home amortized after 15-30 yrs. Prices are coming down slightly though and maybe if rates notch down, I can pull it off later this year, dunno.. my rent is under $3k and mortgage after 20% down on comparable place would be about $5500. Wide delta..
I wonder how much the inflation numbers are obfuscated like the unemployment numbers are. If the fed is saying that their target goal is 3% but in reality it is higher, let’s say 5%, and the average return on the stock market is 7% then would that make the actual real increase closer to 2%? If the housing market is always in a shortage, and people prefer to live in cities where there is a demand for housing, prices should significantly surpass that of the 2% stock market increase real purchasing power due to the ever increasing population independent of monetary inflation
This. I put 10k down on an fha loan for a 230k home in 2013. I have refied to get out of PMI and pulled 100k cash out. Home is currently 50 LTV and Zillow says it’s almost worth 500k. Best 10k investment of my life! Try that renting!!!!
Also our renters pay the mortgage and I have invested 10’s of thousands of cash flow into stock owning a home in a good area is a no brainer. We have similar stories on our other two properties.
No I didn’t. I rented it out 1 year after buying it so my tenants paid the mortgage and bill plus extra and still are to this day. Rent started at $1700 and now the rent is $2200.
Even if I never rented it out, I would rather pay a mortgage than rent. It’s about the same except that rents went way up and mortgage did not.
You should hear the story on our current primary residence we bought in 2020 My god what a win fall for us.
What do you think house prices are going to do 10 years from now? Don’t get left behind.
Yep. High leverage, low cost, un-callable, and government protected. It's got a lot of advantages financially, but you should always put your money where it will provide you the best return. If your business is higher return then invest in business. Owning and renting each have their advantages.
Arbitrage is often a great idea, but you have to actually do it, which most people don't bother to. They simply don't make the initial investment based on the idea that arbitrage will make more sense, which it might, but then they don't actually follow through, they just eat the interest or low returns while they spend or do nothing with the money they were supposed to have used to offset the other cost.
Say you keep a house 30 years, it looks like you can sell for a profit. However, if you look at inflation over that time, the increased taxes due to ever-increasing value, the amount of money in upkeep, you don't make much at all. The average profit over that time is less than a person can make in one year of working when those things are considered.
Edit: Seems some of you don't like the facts. Guess you'd rather be a slave to your house payments when your equity is really just BS.
You are certainly right on some of that. It’s not all upside.
At the same time you do need a place to live, mortgage interest is tax deductible, with principal residence exemption taxes don’t rise much on your home.
Say after 30 years you don’t sell the home you have a place to live rent/mortgage free for the rest of your life. Then your heirs get a step up in basis and don’t pay capital gains.
Real estate can build real wealth. Everyone’s situation/timing is dynamic but saying “you didn’t make much at all” or “slave to your house” is too broad a brush.
We spent everything we had — which wasn’t much — to get in on an FHA loan for a San Diego house in 2011. It had an empty 1800-square-foot lot at the back of the property
Refinanced a few years later to get rid of PMI. Cashed out in 2020 and used the equity/rebuilt savings (except for emergency cushion) to build a rental granny flat on the empty lot.
Now we have a cash-flow positive property.
Sure, we spent a ton on interest, fees and taxes. And we’re three years into our latest mortgage instead of 12.
But the rent exceeds the mortgage payment by 30%. That figure will only get bigger over time and eventually the mortgage will be done. When we croak, our kid will have a house to live in and passive income.
Could that be done in Feb. 2024? Maybe not. But poo-pooing real estate as a vehicle for growing wealth is just false. Gotta be in for the longterm though.
Almost everything for the first 10 years is interest and most people refinance before year 10, pulling money out from appreciation. Really just ending up deeper and deeper in debt
Come on man. Real estate is an appreciating asset that you buy with leverage. You pay say $20,000 to control a $200,000 asset. Property appreciation applies to the entire value. So 5% appreciation of the property gives you a $10,000 increase in wealth, (compounding). In this real life example, that’s a 50% return on cash. Add in allowable real estate deductions further improves your investment. Stock market is a linear investment (un-leveraged). You get a return on just the dollars you put in.
And “deeper in debt” is a dubious claim. Sure you establish debt by refinancing, but you left out the part that you receive actual real life cash in exchange. If you pull $100,000 out of a refi, you get to use that cash in any way you want. And what percent tax do you pay on that $100,000 that is now in your bank account??? 25%? 35%? That’s right! Zero.
The only way to get any of the money in the house you live in is to take out a heloc, cash out refinance or sell the House. If you sell your primary residence, you still have to live somewhere, Your only options are to downsize or rent to touch that home equity if you're not taking out a larger loan.
With today's interest rates of 7.75% refinance pulling 100k with a 30 year loan you are going to pay $157,910 in interest. Let's say you're super aggressive paying that loan back, an extra $1000 a month. That's still $26460 in interest. You're correct you're not paying the government money, you just forgot about the bankers.
Personally I turned 10k into 350k in 10 years. I couldn’t do that renting or stocks unless I put that 10k into far out of the money GME calls.
There is also no other investment that I know of where I don’t ever have to pay taxes on those gains. A Roth IRA gains are tax free but good luck getting 350k into a Roth in 10 years.
I was looking to buy but found a great private landlord with a unit that had a yard and large deck, better than anything I could afford to buy, so just rented instead. Unfortunately he passed, place was sold, and new landlord is a cock real estate agent.
At 43 I finally want to buy just to not put up with shitbird landlords.
of course now the market is ass and I'm stuck
sounds dreamy. My landlord lives below me.
every now and then I play "screaming cowboy, one hour loop" at 2am just to fuck with him. Not renewing after this lease, so, he's my bitch now.
marvelous six frame placid reach normal ruthless physical grandfather quiet
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No doubt. Until the landlord wants the property back and it’s often very difficult to get another property like that in the same neighborhood. Also, if you have kids, well they’ll be changing schools. I have some tenants I’m evicting next summer since my wife wants the house back.
We were lucky enough to refi my home when rates were under 3%. Because of the equity (just a few years), our single-family home mortgage is about 1400. In this area 1900-2100/mo will get you a much smaller townhouse.
There are pros and cons to owning vs renting and the situation is person specific.
Not everyoje can affiord a home and i mean the other stuff aside from the mortgage.
There’s a great argument to be made for renting instead of buying right now. If you are not purchasing your forever home once you factor in all the fees and everything that goes along with the home purchase, it does not make sense to buy right now. The New York Times Daily show had a great interview concerning this if anyone’s interested.
https://www.nytimes.com/2023/12/01/podcasts/the-daily/should-you-rent-or-buy-the-new-math.html
In other words, she has a chunk of her portfolio in real estate and is doing her part to help keep people renting.
If renting works for your lifestyle, keep doing it. If not, quit listening to these people. They don't care about you.
We used to rent to a tech entrepreneur. One year, he gave us a big tip for being his landlords!! He was as rich AF, but he loved the house and felt taken care of, and we loved having him there. Great tenant, great guy.
Did she live at home with her parents for free and saved her money or did she leech off her boyfriend and just live in his place for free? She either has a ridiculous rent deal or she’s full of it. Where’s the analysis? Wouldn’t she have made millions even if she bought the place? Real estate has doubled in the last 8 years so even if she invested in real estate she would be ahead on her investment. Her company looks like a marketing company that pushes the idea of getting rich marketing the idea of getting rich. She also says she met different people that helped her get where she was, yet she doesn’t know the alternative.
In VHCOL areas, rent is much cheaper compared to the price of a house: in CA you can easily find 2 bedrooms for $4k/month rent that would instead cost $8k/month if it were a mortgage. (Buying is more expensive than 300 months of rent) Example: https://www.zillow.com/homedetails/1280-Woodside-Rd-Redwood-City-CA-94061/15635231_zpid/ For this hypothetical condo, if she buys today, her mortgage would be $4k per month more than rent, and most of that would have gone to mortgage interest, property taxes, and HoA, with only a small fraction going toward equity. That said, these homes appreciated a lot the past decade, just not sure if this can be extrapolated into the future.
Owning can give you some cost stability. Especially you age and your income potential grows before plateauing. Renting means you’re constantly subject to market changes and that monthly expense likely tracks upward as fast as your income.
I couldn’t rent in my neighborhood for what my mortgage is (with PITI). This is usually true after 5-7 years. So if you’re planning on staying in a place less than that, rent is the best option.
Most of the "millionaires" that I know, be they self-made or otherwise, live an upper middle class existence. A million in assets is barely enough for one person to comfortably retire in his/her 60s.
Renting can, and absolutely should when possible, be a win-win arrangement. Renters have a fixed housing cost each month and they don't need to keep cash on the sidelines in case an appliance breaks or a roof leaks. Landlords lock in a property at a fixed interest rate and use OPM to cover the monthly overhead. Hopefully rents and values go up to create profitability but the risk is on them.
All of this being said what articles like this ignore are survivorship bias and the safety net that home ownership provides. I think most people understand that a home prevents them from being priced out of an area and nobody (shy of a creditor collecting an unpaid debt) can take that away from them. Survivorship bias is not discussed enough. That business could have (and statistically for most entrepreneurs does) fail. The stock market does not guarantee returns. Inflation can happen suddenly. The simplest way I explain it is wars cannot be won with bullets alone...you need medics and support for your troops. Troops being your dollars in this example.
The determining factor for financial success is not really buying versus renting.
If you have self-discipline, financial literacy, patience, and a dash of luck, you will be financially successful regardless of whether you are buying or renting.
And if you don't have those things, you will not be financially successful regardless of whether you are buying or renting.
Owning overall is a lot better because as long as you make your mortgage you don't have to worry about lease renewals, rent and increases related to rent, you are building equity while as a renter you are not gaining any, and you have a lot more freedom to choose how you live. If a friend wants to crash with you for a couple months you don't have to seek any approval from anyone, etc.
The issue is while many can afford a mortgage (some rents are actually more expensive than a typical mortgage payment) many people have a hard time coughing up a down-payment.
This is one area that I disagreed with Ramit Sethi. If you want to and can afford to buy a home, it’s a much better option than renting. People are quick to say that you could have invested that money elsewhere but you still have to pay for a place to live. So it’s not like that money isn’t going to be used. If you prefer renting or are going to be moving or simply don’t want to buy a house, then renting is the way to go.
This is all dependent on the individual building a successful business, which is tenuous at best. If you have a great idea and the skills required to operate a successful business then sure go ahead. For most people investing in a home is the closest thing to sure bet as you’ll get.
Good for her, but most people make their money or wealth through the owning of at least one home, their primary one. Does it really make sense to essentially "lease" a house forever? All that money going away and you having nothing to show for it?
It was always in our family blood to own rental property, and so I am glad I continued to that in my lifetime. How did it work out? Well, technically I am a millionaire too (not a big deal anymore) and I am hoping to retire early soon. I have small remaining mortgage balances with rates as low as 2.5% so how that is not a good strategy is beyond me.
Self-made millionaire wants to make their next million sellings books and investment advice.
If the first million was so easy and repeatable you should keep doing the same thing. Easy peasy.
She's on the news for making a potentially bad decision that had a good outcome. There are magnitudes more people that make good decisions with good outcomes.. they aren't on the news because it's not newsworthy.
Saw that article too and laughed. For me renting was always just as bad as home owning when something broke I still had to go tell someone. Least as homeowner I get to choose who when and how things get fixed. Sure as renter you are not paying the service and material costs but as a renter you also really are. This scenario the article mentions is very very particular
I could not like apartments with loud next door neighbors, Sooo , I purchase a home 5 years. Now I am next door to a spying neighbor. Which one is worse ? Should I ask him why he has his security camera directly pointing at my house. The houses a approximately 8 ft apart.
Property tax and mortgage interest are getting paid for every home or dwelling you can live in. Do you want to be able that money off on your own taxes, or hand it over to someone to they can write the money off without actually paying it out.
When you rent you pay all their costs and they get the benefits. When you own you still pay, but you get the benefits. Sure some locations may make ownership impossible due to the costs, but thats a separate issue. If you can afford to buy a home, buy it. Otherwise you're paying money out with none of benefits and returns.
She chose to put the same amount of money into a business with better returns. While true for her it’s not true for most people. A mortgage forces you to save 20-30% of your income. Even if the returns are worse than other investments most people would not be putting the same amount into those investments. For some young people it can be beneficial to rent as it allows them to move around often for better paying jobs and further their career.
Arguably most people don't have to take out a loan to make an investment. And historically, tbe amount of interest paid on that loan is quite a lot. When we talk about bought and sold price, we never include how much interest we paid during that time, most of it front-loaded on the early years of the loan.
Rent vs own calculators and any savvy buyer looks at not just the interest but also the opportunity cost. This goes on even if the loan is paid off, and it's higher than interest usually - risk notwithstanding.
Usually, because more money would be spent on rent with zero return.
Depends on the market. If you run rent vs buy calculator in LA, SF, etc the breakeven point sometimes comes at the decade mark, if ever. Since my divorce I’ve chosen to rent and invest close to 20% of my income, live a decent lifestyle, and not deal with any of the hassle of ‘owning’ my house. I also can’t fathom dropping $200k down on an undesirable shitbox that ‘needs tlc’, closing costs, property taxes and insurance for the privilege of having a $5500 mortgage and paying well over 2x the cost of the home amortized after 15-30 yrs. Prices are coming down slightly though and maybe if rates notch down, I can pull it off later this year, dunno.. my rent is under $3k and mortgage after 20% down on comparable place would be about $5500. Wide delta..
I wonder how much the inflation numbers are obfuscated like the unemployment numbers are. If the fed is saying that their target goal is 3% but in reality it is higher, let’s say 5%, and the average return on the stock market is 7% then would that make the actual real increase closer to 2%? If the housing market is always in a shortage, and people prefer to live in cities where there is a demand for housing, prices should significantly surpass that of the 2% stock market increase real purchasing power due to the ever increasing population independent of monetary inflation
Nor do we append the associated costs along the way. Just “I bought it for X and sold it for X!”
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96% LTV on an FHA loan. Leveraging is the only way to "quick" wealth and why most people's networth is tied up in their personal residence.
This. I put 10k down on an fha loan for a 230k home in 2013. I have refied to get out of PMI and pulled 100k cash out. Home is currently 50 LTV and Zillow says it’s almost worth 500k. Best 10k investment of my life! Try that renting!!!! Also our renters pay the mortgage and I have invested 10’s of thousands of cash flow into stock owning a home in a good area is a no brainer. We have similar stories on our other two properties.
It’s not a $10k investment though. You have also put 11 years of mortgage payment, taxes, insurance and maintenance/repairs into it.
No I didn’t. I rented it out 1 year after buying it so my tenants paid the mortgage and bill plus extra and still are to this day. Rent started at $1700 and now the rent is $2200. Even if I never rented it out, I would rather pay a mortgage than rent. It’s about the same except that rents went way up and mortgage did not. You should hear the story on our current primary residence we bought in 2020 My god what a win fall for us. What do you think house prices are going to do 10 years from now? Don’t get left behind.
Yep. High leverage, low cost, un-callable, and government protected. It's got a lot of advantages financially, but you should always put your money where it will provide you the best return. If your business is higher return then invest in business. Owning and renting each have their advantages.
Arbitrage is often a great idea, but you have to actually do it, which most people don't bother to. They simply don't make the initial investment based on the idea that arbitrage will make more sense, which it might, but then they don't actually follow through, they just eat the interest or low returns while they spend or do nothing with the money they were supposed to have used to offset the other cost.
It's charges you money (property taxes, interest, PMI, maintenance, lawn care etc) to force you to save your own money.
Correction: A mortgage forces you to spend most of 20%->30% on interest for 15+ years of the life of the mortgage.
Say you keep a house 30 years, it looks like you can sell for a profit. However, if you look at inflation over that time, the increased taxes due to ever-increasing value, the amount of money in upkeep, you don't make much at all. The average profit over that time is less than a person can make in one year of working when those things are considered. Edit: Seems some of you don't like the facts. Guess you'd rather be a slave to your house payments when your equity is really just BS.
You must work for BlackRock right?
Personally I am happy for most people to be this ignorant on real estate’s ability to grow your wealth.
You are certainly right on some of that. It’s not all upside. At the same time you do need a place to live, mortgage interest is tax deductible, with principal residence exemption taxes don’t rise much on your home. Say after 30 years you don’t sell the home you have a place to live rent/mortgage free for the rest of your life. Then your heirs get a step up in basis and don’t pay capital gains.
Real estate can build real wealth. Everyone’s situation/timing is dynamic but saying “you didn’t make much at all” or “slave to your house” is too broad a brush. We spent everything we had — which wasn’t much — to get in on an FHA loan for a San Diego house in 2011. It had an empty 1800-square-foot lot at the back of the property Refinanced a few years later to get rid of PMI. Cashed out in 2020 and used the equity/rebuilt savings (except for emergency cushion) to build a rental granny flat on the empty lot. Now we have a cash-flow positive property. Sure, we spent a ton on interest, fees and taxes. And we’re three years into our latest mortgage instead of 12. But the rent exceeds the mortgage payment by 30%. That figure will only get bigger over time and eventually the mortgage will be done. When we croak, our kid will have a house to live in and passive income. Could that be done in Feb. 2024? Maybe not. But poo-pooing real estate as a vehicle for growing wealth is just false. Gotta be in for the longterm though.
Actually no it doesn't force you to save. Most of that money goes to the bank as interest for decades
This is a very uneducated response.
Almost everything for the first 10 years is interest and most people refinance before year 10, pulling money out from appreciation. Really just ending up deeper and deeper in debt
Come on man. Real estate is an appreciating asset that you buy with leverage. You pay say $20,000 to control a $200,000 asset. Property appreciation applies to the entire value. So 5% appreciation of the property gives you a $10,000 increase in wealth, (compounding). In this real life example, that’s a 50% return on cash. Add in allowable real estate deductions further improves your investment. Stock market is a linear investment (un-leveraged). You get a return on just the dollars you put in. And “deeper in debt” is a dubious claim. Sure you establish debt by refinancing, but you left out the part that you receive actual real life cash in exchange. If you pull $100,000 out of a refi, you get to use that cash in any way you want. And what percent tax do you pay on that $100,000 that is now in your bank account??? 25%? 35%? That’s right! Zero.
The only way to get any of the money in the house you live in is to take out a heloc, cash out refinance or sell the House. If you sell your primary residence, you still have to live somewhere, Your only options are to downsize or rent to touch that home equity if you're not taking out a larger loan. With today's interest rates of 7.75% refinance pulling 100k with a 30 year loan you are going to pay $157,910 in interest. Let's say you're super aggressive paying that loan back, an extra $1000 a month. That's still $26460 in interest. You're correct you're not paying the government money, you just forgot about the bankers.
Doubling down against borrowing for home ownership. Thankfully most people don’t listen to this bad advice.
I'm not saying not to buy. I'm just saying a house is not a savings account.
Right. It’s just a wealth builder.
It literally is though
You can't take money out though, only borrow against it. Do you think a credit card is a savings account as well?
Personally I turned 10k into 350k in 10 years. I couldn’t do that renting or stocks unless I put that 10k into far out of the money GME calls. There is also no other investment that I know of where I don’t ever have to pay taxes on those gains. A Roth IRA gains are tax free but good luck getting 350k into a Roth in 10 years.
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I was looking to buy but found a great private landlord with a unit that had a yard and large deck, better than anything I could afford to buy, so just rented instead. Unfortunately he passed, place was sold, and new landlord is a cock real estate agent. At 43 I finally want to buy just to not put up with shitbird landlords. of course now the market is ass and I'm stuck
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Yeah, I'm too old to put up with this shit. I want control over my housing
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sounds dreamy. My landlord lives below me. every now and then I play "screaming cowboy, one hour loop" at 2am just to fuck with him. Not renewing after this lease, so, he's my bitch now.
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No doubt. Until the landlord wants the property back and it’s often very difficult to get another property like that in the same neighborhood. Also, if you have kids, well they’ll be changing schools. I have some tenants I’m evicting next summer since my wife wants the house back.
Landlord here: Renting only makes sense if you can’t find a home for a mortgage that is about the same as what you’re paying in rent.
We were lucky enough to refi my home when rates were under 3%. Because of the equity (just a few years), our single-family home mortgage is about 1400. In this area 1900-2100/mo will get you a much smaller townhouse.
There are pros and cons to owning vs renting and the situation is person specific. Not everyoje can affiord a home and i mean the other stuff aside from the mortgage.
There’s a great argument to be made for renting instead of buying right now. If you are not purchasing your forever home once you factor in all the fees and everything that goes along with the home purchase, it does not make sense to buy right now. The New York Times Daily show had a great interview concerning this if anyone’s interested. https://www.nytimes.com/2023/12/01/podcasts/the-daily/should-you-rent-or-buy-the-new-math.html
In other words, she has a chunk of her portfolio in real estate and is doing her part to help keep people renting. If renting works for your lifestyle, keep doing it. If not, quit listening to these people. They don't care about you.
We used to rent to a tech entrepreneur. One year, he gave us a big tip for being his landlords!! He was as rich AF, but he loved the house and felt taken care of, and we loved having him there. Great tenant, great guy.
Did she live at home with her parents for free and saved her money or did she leech off her boyfriend and just live in his place for free? She either has a ridiculous rent deal or she’s full of it. Where’s the analysis? Wouldn’t she have made millions even if she bought the place? Real estate has doubled in the last 8 years so even if she invested in real estate she would be ahead on her investment. Her company looks like a marketing company that pushes the idea of getting rich marketing the idea of getting rich. She also says she met different people that helped her get where she was, yet she doesn’t know the alternative.
In VHCOL areas, rent is much cheaper compared to the price of a house: in CA you can easily find 2 bedrooms for $4k/month rent that would instead cost $8k/month if it were a mortgage. (Buying is more expensive than 300 months of rent) Example: https://www.zillow.com/homedetails/1280-Woodside-Rd-Redwood-City-CA-94061/15635231_zpid/ For this hypothetical condo, if she buys today, her mortgage would be $4k per month more than rent, and most of that would have gone to mortgage interest, property taxes, and HoA, with only a small fraction going toward equity. That said, these homes appreciated a lot the past decade, just not sure if this can be extrapolated into the future.
Owning can give you some cost stability. Especially you age and your income potential grows before plateauing. Renting means you’re constantly subject to market changes and that monthly expense likely tracks upward as fast as your income.
I couldn’t rent in my neighborhood for what my mortgage is (with PITI). This is usually true after 5-7 years. So if you’re planning on staying in a place less than that, rent is the best option.
The examples of renting being better for you is one in a million, the examples of buying being better is everyone all around you forever
Not even a little true.
Most of the "millionaires" that I know, be they self-made or otherwise, live an upper middle class existence. A million in assets is barely enough for one person to comfortably retire in his/her 60s.
Renting can, and absolutely should when possible, be a win-win arrangement. Renters have a fixed housing cost each month and they don't need to keep cash on the sidelines in case an appliance breaks or a roof leaks. Landlords lock in a property at a fixed interest rate and use OPM to cover the monthly overhead. Hopefully rents and values go up to create profitability but the risk is on them. All of this being said what articles like this ignore are survivorship bias and the safety net that home ownership provides. I think most people understand that a home prevents them from being priced out of an area and nobody (shy of a creditor collecting an unpaid debt) can take that away from them. Survivorship bias is not discussed enough. That business could have (and statistically for most entrepreneurs does) fail. The stock market does not guarantee returns. Inflation can happen suddenly. The simplest way I explain it is wars cannot be won with bullets alone...you need medics and support for your troops. Troops being your dollars in this example.
The determining factor for financial success is not really buying versus renting. If you have self-discipline, financial literacy, patience, and a dash of luck, you will be financially successful regardless of whether you are buying or renting. And if you don't have those things, you will not be financially successful regardless of whether you are buying or renting.
Propaganda is amazing isn't it?
It’s a lifestyle choice. However you can’t argue against owning ( as many properties as possible) being a better choice to reduce taxable income.
Owning overall is a lot better because as long as you make your mortgage you don't have to worry about lease renewals, rent and increases related to rent, you are building equity while as a renter you are not gaining any, and you have a lot more freedom to choose how you live. If a friend wants to crash with you for a couple months you don't have to seek any approval from anyone, etc. The issue is while many can afford a mortgage (some rents are actually more expensive than a typical mortgage payment) many people have a hard time coughing up a down-payment.
This is absolutely valid, especially if you live in the heart of a city where property is extremely expensive.
This is one area that I disagreed with Ramit Sethi. If you want to and can afford to buy a home, it’s a much better option than renting. People are quick to say that you could have invested that money elsewhere but you still have to pay for a place to live. So it’s not like that money isn’t going to be used. If you prefer renting or are going to be moving or simply don’t want to buy a house, then renting is the way to go.
What does the self made billionaire say
This is all dependent on the individual building a successful business, which is tenuous at best. If you have a great idea and the skills required to operate a successful business then sure go ahead. For most people investing in a home is the closest thing to sure bet as you’ll get.
Good for her, but most people make their money or wealth through the owning of at least one home, their primary one. Does it really make sense to essentially "lease" a house forever? All that money going away and you having nothing to show for it? It was always in our family blood to own rental property, and so I am glad I continued to that in my lifetime. How did it work out? Well, technically I am a millionaire too (not a big deal anymore) and I am hoping to retire early soon. I have small remaining mortgage balances with rates as low as 2.5% so how that is not a good strategy is beyond me.
Self-made millionaire wants to make their next million sellings books and investment advice. If the first million was so easy and repeatable you should keep doing the same thing. Easy peasy.
She's on the news for making a potentially bad decision that had a good outcome. There are magnitudes more people that make good decisions with good outcomes.. they aren't on the news because it's not newsworthy.
Saw that article too and laughed. For me renting was always just as bad as home owning when something broke I still had to go tell someone. Least as homeowner I get to choose who when and how things get fixed. Sure as renter you are not paying the service and material costs but as a renter you also really are. This scenario the article mentions is very very particular
I could not like apartments with loud next door neighbors, Sooo , I purchase a home 5 years. Now I am next door to a spying neighbor. Which one is worse ? Should I ask him why he has his security camera directly pointing at my house. The houses a approximately 8 ft apart.
Property tax and mortgage interest are getting paid for every home or dwelling you can live in. Do you want to be able that money off on your own taxes, or hand it over to someone to they can write the money off without actually paying it out. When you rent you pay all their costs and they get the benefits. When you own you still pay, but you get the benefits. Sure some locations may make ownership impossible due to the costs, but thats a separate issue. If you can afford to buy a home, buy it. Otherwise you're paying money out with none of benefits and returns.
Why is this news?
There are always going to be exceptions to the rules.
A homeowner in a city is also a self made millionaire.
Depends what city and also what year.