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"Rent where you live and own where you rent (income property)"
- Grant Cardone
In my opinion, more times that not, owning a home is a never ending money pit. Especially if you're not handy (which I am not). I prefer spending my days off at the beach or doing something that I actually enjoy rather than cleaning gutters, maintaining the lawn, etc..
Unless you're buying your home in cash or with a huge down payment, I cannot wrap my head around paying a bank 10's or even hundreds of thousands of dollars in interest over the span of 15-30yrs.
Yet you'll happily pay much more money to a landlord for just as long and not even have any equity to show for it?
I love how so many lifelong renters think the landlord fairy magically does all the repairs and covers all costs or that landlords pay it out of their own pocket. You, the renter, are paying for it all.
Your opinion? Okay, well, your opinion doesn't add up to the fact that everything being done is costing someone who rents, it's just wrapped up in the rent. Otherwise, every landlord would go out of business. Renters pay for repairs and maintenance.
It doesn't much to pay someone to mow the lawn or clean the gutters. Also, you don't have to own a single family home to own.
Yet you'll happily pay much more money to a landlord for just as long and not even have any equity to show for it?
Equity is just another form of capital. In some areas, rent can be cheap enough that the tenant can take the savings and invest the money, and end up with more portfolio value after 30 years than the home buyer would have after paying the house off. This strategy does require discipline and also won't work in areas where the tenant would be spending as much on rent as they would on owning.
Quote:
Originally Posted by LLinVA
I love how so many lifelong renters think the landlord fairy magically does all the repairs and covers all costs or that landlords pay it out of their own pocket. You, the renter, are paying for it all.
No, that is not true. If I have a 12-month lease for $750 a month, I am paying exactly $9,000 to the landlord no matter what. If there is a flood and the landlord spends $30k repairing the house, I am still only out $9k tops. It is mathematically impossible that $9k in rent can cover $30k in repairs. Even if this event is unlikely, I am reducing my risk by renting. Furthermore, even if no disasters occur, rent can only go as high as what the market will bear, even if the landlord can't make a profit and is stuck with a property that is hard to sell and bleeding money every month.
Quote:
Originally Posted by LLinVA
Your opinion? Okay, well, your opinion doesn't add up to the fact that everything being done is costing someone who rents, it's just wrapped up in the rent. Otherwise, every landlord would go out of business. Renters pay for repairs and maintenance.
Explain, precisely, how a landlord would be driven out of business by the opportunity costs of capital and time. These are not outgoing cash flows!
Quote:
Originally Posted by LLinVA
It doesn't much to pay someone to mow the lawn or clean the gutters. Also, you don't have to own a single family home to own.
True. But renters are much more able to downsize in a financial crunch than owners are. Or even to never upsize in the first place. Renters can choose to simply rent a room. You can't buy a room.
Equity is just another form of capital. In some areas, rent can be cheap enough that the tenant can take the savings and invest the money, and end up with more portfolio value after 30 years than the home buyer would have after paying the house off. This strategy does require discipline and also won't work in areas where the tenant would be spending as much on rent as they would on owning.
You can almost always buy cheaper than it costs to rent the same exact unit in both the short and long term. I buy single family homes to rent them out at a much higher interest rate than if someone were buying to live there and I always turn a profit. If I can turn a profit in 7 years a homeowner with a lower interest rate can save that much in less time.
Quote:
Originally Posted by ncole1
No, that is not true. If I have a 12-month lease for $750 a month, I am paying exactly $9,000 to the landlord no matter what. If there is a flood and the landlord spends $30k repairing the house, I am still only out $9k tops. It is mathematically impossible that $9k in rent can cover $30k in repairs. Even if this event is unlikely, I am reducing my risk by renting. Furthermore, even if no disasters occur, rent can only go as high as what the market will bear, even if the landlord can't make a profit and is stuck with a property that is hard to sell and bleeding money every month.
There's this thing called insurance, when a $30k flood happens the insurance pays for it. As the owner I'm out about $800-$1000 for my deductible and everything, including lost rent, is covered. My premium will go up about $6 a month on a $600 a year policy.
Quote:
Originally Posted by ncole1
Explain, precisely, how a landlord would be driven out of business by the opportunity costs of capital and time. These are not outgoing cash flows!
I don't think you understand what was written.
Quote:
Originally Posted by ncole1
True. But renters are much more able to downsize in a financial crunch than owners are. Or even to never upsize in the first place. Renters can choose to simply rent a room. You can't buy a room.
And that's the only benefit to renting and you will pay a premium for that "luxury". As long as renters understand that you are paying that premium for basically no real benefit then be happy renting, I'm sure happy you guys exist as I've made a fortune off of tenants. Remember, you work and pay rent so I don't have to work, thank you.
Yet you'll happily pay much more money to a landlord for just as long and not even have any equity to show for it?
I love how so many lifelong renters think the landlord fairy magically does all the repairs and covers all costs or that landlords pay it out of their own pocket. You, the renter, are paying for it all.
Your opinion? Okay, well, your opinion doesn't add up to the fact that everything being done is costing someone who rents, it's just wrapped up in the rent. Otherwise, every landlord would go out of business. Renters pay for repairs and maintenance.
It doesn't much to pay someone to mow the lawn or clean the gutters. Also, you don't have to own a single family home to own.
Many property investors go broke. Witness the 2008 housing crisis. Reference landlord horror stories. Research what a typical return on investment is for a single family home, and then look to the stock market for a comparison.
Many property investors go broke. Witness the 2008 housing crisis. Reference landlord horror stories. Research what a typical return on investment is for a single family home, and then look to the stock market for a comparison.
People who got caught up in the housing bubble and became landlords because they thought it was an easy source of money aren't investors.
Last edited by AZ Manager; 06-13-2019 at 02:20 PM..
"Rent where you live and own where you rent (income property)"
- Grant Cardone
In my opinion, more times that not, owning a home is a never ending money pit. Especially if you're not handy (which I am not). I prefer spending my days off at the beach or doing something that I actually enjoy rather than cleaning gutters, maintaining the lawn, etc..
Unless you're buying your home in cash or with a huge down payment, I cannot wrap my head around paying a bank 10's or even hundreds of thousands of dollars in interest over the span of 15-30yrs.
In my opinion renting is throwing money away and making the landlord richer. Imagine how much rent will be in 30 years and all that time you have thrown more money away on renting and have nothing to show for it but skin cancer from the beach.
I threw away more money renting in 9 years than what my home cost.
In my opinion renting is throwing money away and making the landlord richer. Imagine how much rent will be in 30 years and all that time you have thrown more money away on renting and have nothing to show for it but skin cancer from the beach.
Its not throwing money away as everyone needs a place to live whether it be renting or making mortgage payments. Depending on one's situation, either or can be beneficial.
Of course the flip side I am going to say is renting allowed me to make far more profitable investments ... we can buy multiple homes today based on that difference compared to had we kept our money tied up in a home ..
So you know I detest it when people say renting is throwing out money because to me tying up my money in a house would have killed our wealth building ability and left us with inefficient use of a whole lot of money in comparison..
For some homeownership may be the only wealth they will build .. for others later in life with the resources ,renting and buying a business with the money or better investments can build a whole lot more wealth then having hundreds of thousands of dollars tied up in a house.
Housing costs are one aspect ,, the investment aspect of it is something else..this ridiculous statement that renting is throwing out money fails to consider both parts
Last edited by mathjak107; 06-13-2019 at 02:28 PM..
Read this sub forum of renting as a lifestyle choice. So many threads are complaints about renting and the vast majority of people rent because they can't buy or think they can't buy.
No matter what the topic that statement is just ridiculous because without looking at the entire picture just because someone pays rent does not mean they are throwing out money ...they can be putting all their resources in to buying a far more profitable business growing far greater wealth simply because they have that money in hand and not tied up in a house.
If that is throwing money away I think someone needs to get over their obsession with their house and see there are a lot more ways to be successful financially and renting and deploying assets elsewhere can be very effective if that is the path someone chooses to take .
They should not be ridiculed with blanket statements portraying them like they were some moron just flinging money out the window because they rent instead.. they very well be growing far greater wealth just because renting allows them that flexibility with their money
Last edited by mathjak107; 06-13-2019 at 03:10 PM..
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