Posted on 03/12/2024 1:09:28 PM PDT by where's_the_Outrage?
Homeownership has long been a cornerstone of the American dream. It symbolizes independence, financial security and prosperity — but is it a dream worth chasing?
Not if you ask real estate investment guru Grant Cardone.
“Buying a home without a doubt is the worst investment people can make, yet it’s also the most common one,” he wrote in an Instagram post earlier this month.
“Is it because [of] the lack of knowledge people have when it comes to financial education? Or is it just because too many people are trying to fulfill their American dream?”
Whatever the reason, Cardone says he is on a mission to “change the trajectory.” Here’s what he thinks you should do instead of sinking deep into debt to buy a home......
He gave the example of spending $576,000 on a home that you keep for 10 years. On top of that huge total, Cardone said you’d also have to pay the following fees over a decade:
12%, or $69,120, in broker fees;
10%, or $57,600, in maintenance fees;
20%, or $115,200, in property taxes;
and 70%, or $403,200, to the bank
Those amounts add up to $645,120 — and when added to the original price of the home ($576,000), would bring the total to a staggering $1,221,120.
“A $576,000 home will have to be sold for $1.2 million in 10 years,” Cardone said. “You’re not going to sell it for that, to break even.” .......
Rather than buy a house, Cardone says you should rent where you live and use the money you've saved for a down payment to instead invest in real estate that generates passive income.
He advocates for residential real estate, which appears to have remained strong through the economic turmoil of recent years,
(Excerpt) Read more at moneywise.com ...
The owners that you rented from paid for ALL of those things ... AND made a profit.
Good for them.
My point is that you are incorrect if you think you came out ahead on renting.
You can list anything you wish as expenses of ownership. It doesn’t matter because ALL of those things will be included in your rent, PLUS their profit.
So it is impossible to come out ahead renting long term.
I have been a landlord for decades and my renters have paid off my original investments many times over, even after any conceivable expenses have been paid.
+1
IMHO - the problem many home buyers have is that they strap themselves with a mortgage that's too high leaving them little money for other things. My wife and I have bought 4 homes in our lifetime, each one being a little more expensive than the last. In each case, we could have bought a much more expensive home. We've not had a mortgage for over 25 years and live comfortably - not extravagantly. The advice we've given our kids is advice we've lived by. "Live below your means".
"... the borrower is slave to the lender." - Proverbs 22:7
And I can show you my savings vs huge interest payments to banks. Rates were high when I started out. First 10 years is practically all interst.
I moved a lot. Would have had almost no equity after 5 years. And I didn’t want to pay a realtor to sell when I’m not there. No time to hunt and buy in another city.
Many hotels I worked in were downtown locals. Just got a place nearby.
I’m very well off and happy with my decisions.
No need to argue and treat ne like a moron. Everyone has different reasons for everyone.
Want to argue about new vs used vs leasing a car now?
We disagree.
Thanks
Not if you're in Upstate. Or Cleveland. How about Detroit. Sure we have a lot of immigrants/illegals moving in but they hate the Rust Belt.
Bought ‘95 for $169k - sold 2006 $430k.
Bought another 2018 $450k - sold 2023 $610k
Timing bubbles...
I'm 63 and last year my wife and I built our last house.
We have been married over 35 years and it is the first new house we have ever owned. Every other house we have owned (almost a dozen over the years, some as rentals and some to live in) has been an old house that we have remodeled ourselves. I developed pretty good carpentry, plumbing and electrical skills over the years.
Our last house we had to gut to the studs and slab twice, once when we bought it 23 years ago and again when it was substantially destroyed by a flood 5 years ago. When we gutted and remodeled it the second time, we decided we did not have it in us to ever do it again (my days of crawling under houses and climbing onto roofs are over). We mentioned to a neighbor that we were going to list it for sale and for how much and the next day a friend of his offered our asking price in cash (this was in 2021, when the real estate market in Texas was insane).
Building a new house is like watching sausage being made. My best advice is to hire a good building inspector to do independent inspections at every stage of construction, especially after framing and electrical and plumbing rough-in and before insulation and drywall.
The old little houses on my street (like mine) now sell for around $3M, as tear-downs for big new $5-6M homes. (Hermosa Beach, CA)
Could that equity accumulation have been duplicated by some other means while renting a place to live? Maybe, but no regrets here.
I see the lefties have been pushing this Cardone guy as of late, part of the “own nothing and be happy” propaganda campaign.
We found a really good builder, very professional and so far the materials and quality have exceeded our expectations.
The 12% fees should be 6% in and 6% out.
Annual property taxes of over $11,000 does sound out of line.
Fooled with the idea of rental property ownership off and on. The reasons you cited are always what end up telling me nope. If that is all I did or wanted to do for a living, then maybe.
Have relations that amassed wealth by buying up tax lean properties, that is all they did for work, renting, fixing, selling etc.
Personally I couldnt do that, seems not so neighborly loving to aid in turning people out of their homes.
Only ever had 2 mortgages, got away even on the first after 5 years then paid off another in 12 years. Been debt free for a while now but boy with the family expenses or habits of some it does not feel like I can ever get ahead. Not living pay check to paycheck but the checking account overdrafts too often.
The key is not to overpay, or buy more house than you can afford.
Back in the day at the height of my career in the 80s-90s, DINKs were buy McMansions with interest only loans and little to nothing as a down payment.
They got property tax deductions, mortgage interest deductions, property ad val tax deductions on the new cars and all the while sitting on a home whose value only rose. Great deal for 5-10 years. LOTS of spendable cash and then the bottom dropped on home sales.
People who paid 576K 10 years ago sell for 1.2 Million every day. If they bought wisely.
People who paid rent for a 576,000 home... Well, they have NOTHING.
So this moron says you shouldn't buy a home, but you should buy real estate. Is this brain damaged idiot on drugs or what?
Google search says....
Experts say baby boomers will give more than $50 trillion to their heirs.
I’ve got a son and a daughter. And two mortgage free homes. So this statement fits my situation perfectly.
Neither of my kids can afford to buy a home. But they may get one for free. (Almost free)
Live Vegas summer house Minnesota 1 rental cal it is not worth much 4 houses in ga I have never been there and recently paid 510 for 7 in okla city . Made a fortune in Calif after 2008 small fortune in ga and well Oklahoma city not quite golf mine but silver good enough. Never been to OKC either made many many mistakes but some how always end up good
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