Is it Better Financially to Rent or Buy a Home?

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31 thoughts on “Is it Better Financially to Rent or Buy a Home?”

  1. Hey man, Check out Graham Stephan, maybe do a video with him on house owning.
    Also, you can pull out money off of your property, you can do a cash-out refinance on your mortgage.

  2. There’s also retirement to consider. You will probably pay off your mortgage before retirement (banks don’t really give mortgages past retirement age) whereas if you’re renting, you will be paying rent for your whole life.
    But also who are you living with? Getting a mortgage between like 5 friends, is difficult (impossible?) but renting with friends is totally doable and reduced your costs on things like internet, not just rent.
    There’s so many factors to consider.

  3. All I heard from this video and the previous one : " house house house buy house buy house rent investment house house buy rent stock house investment house house editing house video editing house I buy house house money investment house video …." 🤔🤔🤨😐😑😑😑😑😑😑

  4. Owning for sure. You are actually building up some wealth and equity instead of just paying money to a landlord. but that’s becoming harder and harder to do for a lot of people. It’s much easier to rent.

  5. Using the calculator and putting in every figure, checking it carefully using local data, the break-even point for us was around 3 years. If I'm super conservative, and assume a really good return in mutual funds it goes up to 5 years. But yeah, definitely better to buy in our area.

  6. When I did a ton of calculations about 15 years ago, even here in California (with above average property value growth) it didn't make any sense to buy if you lived someplace less than ~7 years or so.

    One thing most people don't consider is the cost of buying & selling. If you use a realtor, you are going to pay 6% off the top of your selling price (and even if you go FSBO, you will still likely pay 3%, and possibly lose out on best sale price). Also, this doesn't include "fixing the house to sell" costs; repainting, yard work/improvements that you wouldn't normally do, lost vacation time, etc, etc, etc.

    The other benefit of ownership REALLY starts to show itself if you can stay for ~10 years or more: the price stability. At 8-10 years, your mortgage (PITI; principal, interest, taxes, insurance) your cost should have changed only minimally, and often can go down if you are able to get a beneficial refi. If you rent? Your cost will go up 3-5% (at a minimum) per year. (also of note; if you buy, you are forced to get insurance; you can "save" this when renting, but is that wise?)

    Then, as mentioned in the video, the cost of maintenance/ownership can be daunting. The good news is that you don't have to wait for the landlord to fix it, but, you are stuck footing the bill.

    Overall, it is very much a personal choice. There are some situations that are cut and dried for either ownership or renting, but the vast majority need to be evaluated on a case by case basis.

  7. "Hi! <…> Bye!" Please tell your dad that he's doing amazing.
    P.S.: an hour and something answering questions about falling in love? Please, I beg you, give it all to us. I love love. I love people in love. That kind of content would be GREAT.

  8. Thanks, Craig, for another great video, and also for such a nuanced/balanced answer to this question. Also congratz on the 100k subscribers!

    A couple other considerations, which I think you may have touched on previously, is that buying a home essentially "anchors" you to that location for at least a couple of years until you can recoup on the closing and other associated costs with initially purchasing a home. This is not a problem for families that are certain of where they want to live for the next several years, but is very much so for someone that expects (or prefers) to remain flexible/mobile, particularly for employment opportunities.

    Additionally, it is also a possibility to "loan" yourself, or alternatively withdraw, a portion of the money that was invested in a Roth or traditional IRA, or even your 401k, for use as a down-payment to purchase a home. So purchasing a home and otherwise investing are not necessarily mutually exclusive.
    (Note: the merits of doing this is heavily debated, as is the "best method" for doing so, and the process for doing so is not really easy or straight-forward for the inexperienced; nonetheless, it is an option.)

  9. I was a very young buyer. With that my mortgage has been and will always be significantly lower than rent in my location. It's not for everyone, I spent a lot of money over the years on maintenance and time on yard work. One of the safe things about owning is the ability most of the time to sell or even rent your property if you suddenly need income. You could live in a van and collect enough to save yourself from financial ruin if you had to.

  10. i just chucked a load of numbers in and.. surprise surprise! owning a home is cheaper. but as i don't have any way to save a deposit for a house, it seems rather unlikely.

  11. In Norway on TV show they picked 3 bloggers against 3 investors, to see who were best.
    All the 3 bloggers (even beauty blogger) won against the investors with amazing margins.
    They are not worth the price, do it yourself if you are going to invest.

  12. Why not invest in top SP 500 ?
    investopedia

    "Advisor Insight. The average annualized total return for the S&P 500 index over the past 90 years was 9.8%. In 2017, the S&P 500's total return was over 19.7%"
    It's okay to own a house though, it brings a certain security.

  13. If you find that you don't have a decent amount of money to put in savings every month, you probably shouldn't buy a home. The home I owned before the one I'm in now had relatively low property taxes (still a pain), as well as insurance costs, but everything that could go wrong did right in the midst of the financial crisis. The water heater, the attic fan, the A/C, poor drainage in the laundry room was always a problem, etc. I could not keep up with the costs of repairs. I had to sell it at a loss because I could no longer live there. I would have been better off renting.

  14. I prefer renting, definitely. I don't want to own a house, I don't want that kind of responsibility. I don't want to do anything to my home, so I don't need that "freedom". I prefer flexibility and getting to not care about any sort of maintenance. Where I live, whenever something goes wrong in my apartment there's someone to call and who will take care of it within a day or two. I don't want to fix plumbing or stuff like that. I just want a place to store this meat-sack and its stuff. I don't want another job, or another hobby. I got enough of those.

  15. I would say that renting is not "throwing your money away" because in exchange you get a place to live. Yes you may not own the property, but you still are getting a roof over your head. People don't say you are "throwing your money away" when you stay at a hotel or go to a restaurant when you could have made food at home or slept in your own car while traveling. You are getting something in exchange for your money. The only difference is that someone who buys a home 'may' be able to get those funds back.

  16. Ah, but equity lines are available after you are there for some years and have paid down the mortgage a bit…(we used it to combine our sons college loans into a 3% for three years equity line from the around 8% four loans, one per year, that put him thru school)…Whew…

  17. If you are staying, and have children, then the purchase is a good idea. We made positive improvements to our home over the years, and our value increased to currently about 70,000 more than the purchase price. We added a den, a basement family room, etc. plus architectural shingles on the roof, etc., replaced the windows with dual pane versus single….so…if you are planning on you daughter making friends in the neighborhood and schools, if you also make friends and enjoy the area, and plan to stay for at least 15 to 18 years to allow her to grow up WITH her friends…then buy the house.

  18. Answer: owning (for us). 1300 dollar mortgage payment where rent for something comparable is 1900 here. Double principal portion of payment and pay off in half the time. The most important thing to consider is to not buy property that is too expensive. Many people mess up on that part. Gratz man!

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