You buy a home because it’s a place to live. That’s it.
So you should throw money away in rent rather than invest it in your own equity. No thanks.
The problem is that we are running out of younger people willing and able to afford home ownership. House prices are inevitably going to decline over the next few decades, and we’re going to start seeing abandoned homes, as they already do in Japan. If you’re a younger person who decides to buy a house, do it because you want a house to live in - it’s not going to become the high-yield investment vehicle it was for your parents.
You will own nothing and be happy.
No thanks. Rents around CA 2500.00 to 3500.00-which I save each month.
1. Eat bugs
2. Own nothing
3. Be happy
Stupid!
Stupid!
Stupid!
Buy a home you can pay off in short time.
Don’t buy a car on payments.
Stay out of debt.
By assets.
Don’t Watch TV.
Click Off!
owning a home is NOT an investment, it is a necessity because you need a place to live, trust me I have 3 of them...However I will be selling two and my business and retiring soon.
There’s so much wrong with these assumptions, I don’t even know where to start.
My First Choice as a house would not be something over half a million. If that’s the price of a starter home, rents would also be outrageous.
The house we now have is probably about that amount. But we started off with a $90,000 house, paid it off, then went to a more expensive house. And so on and so forth. I never considered any of them an investment, just a vehicle to be able to store some money in to pay for the next house, until we were done moving. Which is hopefully now! Not to mention having a pretty nice place to live. If I was paying rent I wouldn’t be willing to pay $3,500 a month, I would live in some squalid Apartment since I’d be throwing my money away.
His math isn’t wrong.
Perhaps we need to change the inputs and reasons WHY a home is not a good investment - especially, property taxes.
Why would somebody pay 12% in broker fees? The most should be 6%, 3 to the selling agent and three to the buying agent.
Why does he assume property taxes are $20,000/year? Mine are 10 times less than that. So like all liberals, he’s assuming that everybody pays the same as the dumb people living in the liberal areas.*
Those are some pretty high maintenance fees, especially if somebody paid over half a million dollars for a fixer upper. We do the maintenance ourselves, costs a lot less.
I can’t remember the other outrageous assumptions so I’ll just stop here
He is an idiot. The tax breaks alone bring in a goodly sum in return of investment. When prices fall, you can lose your ass if you are looking to sell.
Now if we get State government to quit taxing property on homes they rent to people, and on homes that are owner occupied, life in America would be much better for all in the working class.
Tax people who own over a certain number of properties at 100% of value. Find a way to get investors out of properties. Trillion dollar portfolios of peoples homes, is an abomination againt humanity and God.
Also, there are many large risks in playing landlord.
1) The place may go vacant - no cash flow.
2) Govco may arbitrarily declare a rent moratorium during a pandemic.
3) You have no idea really who you are renting to, and what they might do to the place because they just don’t care.
4) High cost of maintenance - $15k for a roof. $10k for an HVAC unit. $3k for a new water heater. Need a tree taken down? $3-5k. Lawn care, snow removal, wind damage. Etc, etc, etc.
Sure, if had 100 or 1000 units, you could hire your own crew, and plan for vacancies, spread the cost of maintenance. But own one home, and hope you make enough money on it? Good luck. Because luck is what it will take.
People should live in pods and eat bugs !
I bought a home in 1999 for $220,000.00. I could sell it today for $700,000.00.
Feeling good about the move.
You linked to the author’s profile and not the article
Help me out here explaining what this financial Einstien is saying:
If you rent, you pay those same expenses to a landlord (the landlord isn’t losing money) plus any profit the landlord might make.
If you own a home, after you pay those amounts you have equity in the house.
No magical saving comes out of thin air if you rent.
This guy doesn’t know about other strategies that help home ownership pay off nicely. He’s also ignoring the fact that about 30% of homes don’t have a mortgage, so all that interest can be subtracted back out. My last home was paid, I sold it, carries 50% of the price in a mortgage. Paid cash for the latest home, it’s up 43% in 4.5 years. Also, I think the ability to move when I want to, rather than when the landlord wants me to, is a very valuable asset for our family stability.