Is A House An Asset Or A Liability? [Finally Explained]
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- Опубліковано 29 вер 2024
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Is a house an asset or a liability? That is one of the biggest questions many people have when they think about buying a house.
It is important to understand real estate in terms of assets and liabilities and the different ways you can buy a house so you will no longer wonder Should I buy a house?
In this video, we are going over 3 main ways we can buy real estate and how each one affects your finances so you know how to invest in real estate.
You’ll learn how to build home equity in a property without using your own money. You’ll also learn when a house is considered an asset or a liability.
Check out these other awesome videos from The Better Men Project:
7 Types of Income Millionaires Have [How The Rich Make Money] • 7 Types of Income Mill...
The #1 One Thing That Keeps Your Poor - • The #1 Thing That KEEP...
5 Ways To Make Passive Income - • 5 REAL Ways To Make Pa...
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It is only an asset when you rent it out or sell it
True
Or, you can rent some rooms in the house.
It is a asset if you pay off the mortgage and own it out right.
What was your rent 10yrs ago? What is your rent today? What will your rent be in 10, 20, 30yrs? You have to live somewhere. So while it may not seem like an asset, owning a home locks in your monthly housing payment for the next 20-30 years, and of course after that, there is no monthly payment. Taxes, insurance, maintenance costs are all rolled into your rent, you just don't get an itemized bill showing those costs, but they are there. Remember, wealth is about acquiring assets, and paying rent helps some other person to acquire that asset. Landlords make money off your rent, or they would not be doing it. So take all factors into account, and a home is a huge asset.
Lots of rentals barely break even let alone make money, and the ones that are profitable are one maintenance or repair away from going into the red for the landlord. Houses regularly rent for less than the mortgage payment on them.
Having a place to live is a cost. Buying that place costs less than renting it from someone else who is renting it to you at a profit. It's not an asset to them if they're not profiting from it. Therefore, in that sense, a house you're buying can be considered an asset. It frees up that difference in income to be used to generate other income. And by the way, the duplex analogy is false- it's the same as buying 2 houses half the size, 1 to live in and 1 to rent out. It may be a better value as a property though.
Bro but my mortage is greater than that of my rental income🤧
Rent- 5000rs monthly
Mortage-15000rs monthly
True, I have to pay mortgage including taxes and insurance , repairs , maintenance and upgrades. All very expensive. You make money in the future when you sell it but add up all the money you spent on your home while you lived in it and see if you really make a profit ?? I say probably not. The realtors , homebuilders, mortgage companies and title companies make a lot of money when someone buys or sells a home. Think about it. A long time ago they lobbied congress to give people a tax write-off when you bought a house. Do you think it was to benefit buyers ??
Very important observation ☝🏻
You only have to put down 8,750. The banks charge 3.5% on the down payment. 😝 20% is for an investment property not a house to live in.
What if you do not want to be a landlord?
Phenomenal content
Thank you 🙏
actually a house can be a asset. if you buy cash and not by loan and rent it out, you will have a asset. please realize this will only work if your already rich. one advice if you do business, think of your busienss parters or who you bay from as family in a sense. it will bring good luck.
ASSETS AND LIABILITIES GO HAND IN HAND.
LIVING IN NYC, MY HOUSE IS AN ASSET
BECAUSE IT IS SAVING $423.62 MONTHLY ON RENTAL EXPENSE.
What you think about 12000€ income (yearly) and apartment price by square meter 1700€ but square meter easly goes up to 2400€!?
Just because an asset doesn't generate cashflow, that doesn't mean it's not an asset. The pizza company doesnt sell delivery drivers.... but without the delivery drivers, delivery pizza is not profitable.
So the delivery drivers are a source of income for the pizza company making them an asset.
There are a variety of asset categories but generally things that make you less financially successful are liabilities and things that put money in your pocket are assets.
This video clearly ignores opportunity cost. If you don’t buy a house, you would have to rent. So either way you have a liability in cash flow terms for your accommodation. The difference is that in renting, you will not get anything back, while in paying mortgage, you will get some or more money back depending on real estate prices. Also, when buying, eventually you will have a cash producing rental property. Also, as mentioned in this video that rents are usually higher than mortgage and all the fees associated with buying a house, then buying would be a positive cash flow as a result of saving from the cheaper cost of buying versus renting.
Exactly - I feel like these people are brainwashed.
Buy a house that fits your needs, later on buy the house of your dreams if you can.
*☀Thank's🌌own what we Rent & Rent where we Live🌦we gonna🌞plan-it on this planet🗺*
Be careful, the house (or marriage) could be bad for your health,..
For 2020 & 2021, Covid19 killed the idea of buying a home as an investment
They are not buying a house, they are getting a mortgage
Since kid, as you get older, you have this "social pressure" of your peers for taking a house, or rent it. ( because it's cool for making party and also because ladies will come to your house to....well let's say "eat tacos ;-)"). But the thing is....most of the young people I see rent a house " TO be independant" when in fact it's just to impress other people. Nowadays, College students who rent a house are saying this while in fact: it's their parents who pay the rent. Don't be fooled by that.
House is a liability. You don't need THAT much space to work and get money. Sure if it helps you to be near your workplace then good. And if you want to make in an asset just do like The better Men Project said.
Also...subscribing to The Better Men Project is an asset and doesn't cost you anything ;-)
ميكسسب
كيطتبءنتسغليكيخاكلسطلقو
كي
It's a liability until it becomes an asset This is why the rich man stays rich because he has the instant cash to make it into an instant asset...
When you own your own home you can rent out a bedroom or two, your housing costs are fixed and so t go up like rent does (except property tax), you need to live somewhere, you might as well pay yourself. Renting is a guaranteed liability. With a house you can at least recoup some or all money.
Depends on when you buy and when you sell, your interest rate, location of the property, cost of ownership, just to name a few.
Buying a house is a huge financial commitment and ties up a lot of cash.
I'd rather live well below my means and invest all of my disposable money to generate multiple streams of income while keeping cost of living to a minimum. This way progress is basically instant and guaranteed
The most valuable part of the video was the end understanding how to turn a home you live in, into an asset. that was the part I have been trying to understand. Thank you so much.
Happy to help ! Hope you can start generating extra income with your home.
Depends how you use it.
Asset if you rent it out.
Liability if you live in it and pour money into renovations that won’t bring back much money when it comes time to sell.
Exactly mate !
Bingo
It's not an asset until you fully pay it off. CPA
Renting a house similar to mine would be 3000 a month. Since my house is paid off I am able to save 3000 bucks on rent. At the end of the month my bank account will be 3000 bucks more than the dude who rents. I say asset.
Everything costs money renting or buying. Everyone has to stay somewhere. So a place to stay is a liability no matter what.
An house can be an asset only for the landlord not for the renter 🤷🏼♂️
☝🏻
@Jaime Alonzo maybe the renter is renting it to his roommate
It is becoming more and more apparent to me that whether something is an asset or a liability is similar to beauty.Asset or liability is in the eye of the beholder. If you are smart you can virtually turn any liability into an asset. Thanks again for another great presentation.
Thanks again for your response. I appreciate all constructive feedback.
Game Over, perhaps all you need to do is have another look at your situation. Smart people can often become overwhelmed by situations where they can’t see any way to move forward. Panic is simply the fear of the unknown. Once you break your biggest problem into bite sized pieces they will not overwhelm you. As a Hermit I was constantly faced with such situations. Surprisingly it is when you feel that you are in least control that you are in the most control because it is when all of your survival faculties will be there to help you out. Short of breaking the law you can usually get good council from your intuition. lol Don’t just think that you are not that smart. Thanks for your response. I appreciate all constructive feedback.Take care
Very true, common devices like an iphone are widely seen as a liability but one can turn that iPhone into a revenue stream which makes it an asset
Poku Banks you have it right. The way that I managed to get 160 acres of land for $4000.00 was because the seller was unaware of the principle that I stated at the beginning of my message. I also own the mineral rights for the silver that area is known for and 3000 cords of wood on it. If I process the wood and don’t clear cut it I can have an indefinite job supply for myself and my family. Thanks for your response as I appreciate all constructive feedback.
Not healthcare liability, unless you own the hospital.
Wait… isn’t renting a house also a liability…? It’s still taking money away, less cash flow AND no saving account at the same time?
I know I’m late to the party, but when you rent, you are paying for maintenance, taxes, insurance and even cash flow in the landlords pocket if they bought their property right. The problem is the renter is often ignorant to this fact. Owning should always be cheaper than renting if the buyer is not overspending.
Very true, although some situations might make renting sense for some people.
@@TheBetterMenProject Yes, renting should be a phase that the subject should have an exit strategy for. Most have no exit strategy. Debt is increasing and savings are being wiped out because of inflation, rental increases and the lack of affordable housing inventory. I’m personally taking priority with creating more affordable housing opportunities through my own investment strategy.
With an unemployment wave approaching, homeowners have at least a year to find their way, but renters could be on the street in as short as 30 days.
“Failing to plan is a plan to fail.”
I liked how the house became an asset if you rented out part of it. I believe the house could also become an asset if your business was in your house like the small businesses that are started in the garage.
1TalldrinkH2O depending on what your business is yes but you can start a business in your online, in your car, or garage too. It just depends.
Yep, just get a virtual office for your business.
It's a simple numbers game. If your businesses makes enough to pay for the houses payment and ur salary and other business expenses (including ur salary) while giving u money to save or reinvest then it's an asset
Your house is not an asset if you start a business in it, the business is! Reason is, the house still has all the expenses attached to it in addition now you have the business expenses. The house only becomes an asset if the house makes money for itself!
Buy a house rent it and still live with your parents until you can buy another
Why would you rent as opposed to buy, rent takes money each month just like a mortgage. But in the end you don't own it.
@@yourstruly1498 renting isnt way cheaper, its subject to where you buy or where you rent.
Renting is almost always more expensive, if it was cheaper us landlords wouldn't keep buying more properties to rent out year after year.
When you rent you're paying my mortgage, insurance, HoA fees, property taxes, maintenance budget, and a little extra just for me; ontop of any other fees that may or may not be included such as utilities.
Here's an example (real world):
I pay 1600/m for mortgage, 300/m for taxes, 100/m for insurance, and 50/y in HoA fees. That's just a tad over 2000/m. If you want to add in maintenance costs let's say 2200/m.
I own a second very similar sized home (but is actually worth considerably less) and I charge 3200/m rent with the tenant being responsible for utilities. I pocket nearly 600/m of this and put the rest aside for expenses.
It's easy to understand that renting is a poor choice. Unless you're planning on moving out in less than 3 years you should always buy, that's my rule, and that's the advice I give my tenants anytime they ask. I'm open about how this all works because honestly, most people just don't seem to know.
People rent out properties that are cashflow negative all the time.
Dude exactly I feel like there is a lot of wizardry here and people being gaslighted with propaganda. Everything on the internet is saying "renting" is the way to go and I can barely find anything that says buying a house is a good investment. They want people to be renters and slaves - Why would they want us to own anything. Just more meaningless propaganda - Don't fall for it
@The Loner Millionaire You are losing money either way - I would rather own something at the end to pass down to my kids that I put time and effort into than handing all my money over to someone else with nothing to show for it. Yes, technically you still pay property tax on the land but the alternative doesn't necessarily save you money and I'd argue that you would lose money almost every single time over the long haul. Renting out to others is a business venture that is irrelevant to the topic. You are equating renting to property tax when you are already covering those expenses every single time you rent from someone else. Why not own a house for the long term and rent other properties out? I'm sure all these gurus either don't actually rent or have some sort of interest in selling the idea of rental properties. Gov't dips their fingers in everything including your income and stocks that you could be allocating money towards - it's an unfortunate part of the game until we actually get some sovereignty back for our lives. With a house - yes, you could have problems with maintenance down the road but you can also change it any way you want either to keep it long term or flip for a profit if done right. I know people have made countless dollars flipping houses and this was against the inflation rate. There is a time and a place for everything -There's no solid answer to this. Also, there is a reason people are homeowners and going against this useless misinformation because they know that renting is a scam - That 60% number doesn't refute the claim. Listen to the people who rent out properties to others rather than people with a philosophy about it- Renting at best gives you flexibility and less liability (I've had horrible landlords that argue to fix anything or purposefully delay)
you can also do house hacking. buy a duplex live in one unit and rent the other one out. the tenant will pay your mortgage and you cover the rest.n great video btw
Always remember, Renters treat property like they rent it. Meaning Garbage!😂
A House is an Asset... End of Story.
Maybe I'm missing something but if you buy a duplex and rent out both sides, where do you live? If you live in your duplex, in most if not all states, you can claim a homestead exemption and reduce your property taxes by as much as 50%. You can also claim your mortgage interest on your federal income tax return. Unless you still live with your parents or find an apartment for substantially less than the rent you charge for one of your units, you're better off living in your duplex. Even better, buy a triplex or 4 unit. And keep in mind that house hacking is great until you have a family.
That calculation is oversimplified. Having 200 k mortgage + property tax + repairs + income tax will never leave you with 450 USD per month
where will i live? if i rent the house to other people? should i rent too?
It all depends on your personal fiancés. If you can rent your property for more than you will pay rent yourself then financially that makes sense but it all depends on what you want to do
That duplex example you gave, from $1200 rent from renters to $350 left because of expenses.....this is too muchh!!
The cost of most homes aren’t even worth half current sellers asking prices. (land/material/labour).
An asset put money in your pocket and I liability take money away from you. Your personal house that you live in that cost you money every month it's a liability because it takes money away from you. A rental property that produce income every month is an asset.
Assets is something with value you own. Even if you are living in your own house, it is an asset because that house provide you a value and you are benefited.
BEST COMMENT IN THE ROOM...THANK YOU!!!
Preach! Robert says its a liability because you are paying interest and its goes to the bank not you. Which doesnt make it a liability. In the video it describe your mortgage more as a savings account. And thats mostly because you don't have coumpound interest as when investing in the stock market. And the capital + value of your house doesn't always follow inflation. But depending on where you live your house could beat inflation and its a way to save money by obligation. So as you do I view it as an asset. Its not the best way to make your money work but when you're aware of that and you make the decision with knowledge more power to you.
This is perfect! I was just thinking about the differences between a liability and an Asset for buying a house! Thank you!
Awesome! Perfect timing then
As the house market is the one of main sources of the flood of inflation , keeping a house like keeping a boat floating on the flood of money.
Renting is not cheap. Landlord takes in to account, property tax, maintenance etc are all included in your rent, you don't see the true breakdown while renting. In reality whether you rent or own you always pay property tax, maintenance....
Sure, but why not find a place to rent where you pay less than buying a house to live in?
When you charge your tenants more than what you pay for rent, You’d be able to build your equity at a much faster rate than what is coming out of your own pocket.
What if they stop paying rent and destroy your rental? Everything sounds great on paper 😮
Man, somewhere you got to live. Stop all this non sense around asset or liability.
Wawooo bn planning to renovate myn its high tym I changed ma mind thx a lot
If your unlucky people sometimes, well, often dont pay rent should owe.!
Seen this carefree attitude do many times from people.
Renting is good for singles not for a family. If a family rents an entire house they're paying someone else's mortgage and therefore making someone else rich. Also, people need to have a place of their own to stop the rent cycle for once in their life
Wow! Man you are a champ. Thank You 🙏🏻
That's why a house is long term investment and always consider maintenance budget when buying one
isn;t the maintenance budget cheaper than rent though?
Depends on the maintenance. Big ones cost more and small ones add up overtime
It’s like your house is broken or have issues every month still better to own property
Interesting video. Thank you.
I think property investment procedures and thinking are the same in the USA as
NW Europe.
Rental properties good, primary residence not good
With the housing market bubble the way it is right now who ever bought a 800k900k at 2,3,4%interest rate. Barely making monthly payments is going to be in big trouble when interest goes to 6,7,8% and more. they are not going to be able to keep up with monthly payments a will end up forclosing and the house is gonna get repossessed and put on auction. Canadian market value over 60%overpriced on real value of homes. Watch it happen.
🤔 but if they bought at that 4% locked rate why would they end up at 8% ? You made that scenario up to only fit loans with floating rates
Living on your one home, mortgage free, is the best feeling in the world! No rent to pay. No landlord to evict me. Wealthy people own their own homes for many reasons. Don’t stop dreaming of doing the same. As for investing, property is good and shares are probably better if they pay you dividends too.
Thank you I feel like there is a lot of propaganda centered around this topic to keep people renting and padding the pockets of the people endorsing these philosophies. There is no way in hell people are making more money renting and you end up with nothing in the end
@@chrisetheridge7606 yes buy house not rent, I know some people always rent because she say its cheap to rent house, but after 16 years later, she now finally want to buy house, she shock with the price and the money for rent 16 years all is wasted
What do you mean finally explained? There are literally 100s of videos explaining this.
pnatgrendy most people are t seeing them because 60% of people say your house is an assets
Yeah but what if people that are paying you for rent are no longer able to do so?
You evict them and get ones who can pay
And ... once you find a better renter to replace the deadbeat renter ...
You take a good, hard look at your screening process that you use to find potential renters ... and you improve your methods. Every mistake is an opportunity to grow, learn, and improve.
Its what separates winners from losers. Literally.
Point to Take Away:
1.) The loser will focus his/her thoughts upon why an idea will fail, thus convincing him/herself that it is pointless to persue it.
2.) The winner will focus his/her thoughts on why an idea will work, thus, convincing him/herself that it is worth persuing it.
3.) Most all successes / failures occur "first" in the mind of the individual, then that individual proceeds to manifest the imagined outcome of the idea in their physical realm.
4.) If the majority of ones' outcomes fall short of what one desires ... Stop focusing on the resulting outcome, and Start focusing on the initial source of the outcomes. (If you desire to head westward on a highway, but you enter it from the eastbound on-ramp ... it is then pointless to continue forward until you go back to the starting point and "realign" yourself with your goal, by entering the highway on the ramp that points you in the direction that you wish to go. - Most of society will not take the time to do this; preferring instead to continue on, looking for signs of progress while travelling away from their goals.)
5.) Change For The Better requires sacrifice. Period.
.
Hint: A sacrifice is Always occurring in ones' life.
1.) One is either sacrificing ones' present comfort, for increased comfort in their future, or ...
2.) One is sacrificing increased comfort in their future, for comfort in their present.
3.) This sacrifice first occurs in ones' mind; then manifests itself in ones' life. ... Choose wisely. 😉
All good information, however with option 2, where do you live if you rent out your primary residence/purchase? If you have to rent, that kind of cancels out the rent you receive does it not?
For sure, but what if you rent is cheaper than your property cash flow?
Let’s say that your rent out your property for 1,600 per month and you pay 1,200 for your own rent.
That’s would give you a 400 dollar per month positive cash flow.
@@TheBetterMenProject yes that's a good point. Thank you.
Than where will I live 😏
What happens if your house burns down ? Do u get a new house ..probably not might jyst be homeless and still have to pay for the house or file bankrupt
Homeowners insurance
Uhh you pay insurance... this is why its smart to research yourself and not just watch youtube vids of ppl using dramatic words to scare you
All good and fine to buy investment property and rent it out...but where is the owner of the investment property going to live? He stills needs a home...so he still needs to BUY or RENT it from someone. So it still costs him money.
*Theoretically it sounds good.
Either way money will be taken from u. Even if you are renting. At least when you buy, you aren't paying someone elses mortgage.
It's liability
I recently read an article boasting that single women are buying homes at a higher rate than single men. I kind of took offense of the idea that this was some kind of proof that women are doing better than men. I make decent money. I have good credit and I already overqualified for a home loan but I'm hesitant to take the leap. I don't need a house to live in right now because I live on the road. I'm considering either rental property, my own big rig or a dually and a trailer to run hoy shot with. I have no wife, no kids so buying a home just to say I bought one doesn't seem like the best course of action at this time.
Land is asset, building/edifice is liabity. If rent house it will get income (daily, monthly or yearly). If sell house will get profit from selling (don't sell it if loss). By the way nice information👍.
Houses are only assets when you invest in the value and flip it or rent it out. Else its always a liability.
Your Favorite Lifecoach finally someone that gets it
I turned $5700 into $49600 buying, living in, and selling 2 houses in 7 years, they are definitely an asset if you buy the right ones and don't pay too much.
That's good and all, but that means all of your labors and stresses buying and selling homes generated a whopping $6,271.43/year over your 7 years. $49,600 - $5,700 (initial investment) = $43,900. Then divide that by 7 (years spent) = $6,271.43 per year over 7 years. Without knowing your exact situation, you probably might have been better off not selling one of the homes and instead rented it out. Even if you got $200 a month for a single unit in profit after all expenses paid, you would've instead over the 7 years had 7 (years) x 12 (months per year) x $200 (hypothetical profit) = $16,800 over 7 years, and also had your initial mortgage going down with quite a bit of equity in so you could've sold for a larger profit most likely.
@@samuelpentowski6077 $5700 invested in the stock market is supposed to only double in 7 years and what stress you live in the house while it appreciates how hard is that?
@@Defy_Convention I never mentioned the stock market, I said renting out one of the houses. The work of upgrading the houses. You pretty much flipped 2 houses and those require a lot of work. If you choose to not take full advantage of your properties that's entirely up to you, I merely presented an outside perspective on what would have most likely been more profitable.
@@samuelpentowski6077 I took the capital gains instead of the dividends, you assume renters won't damage the properties and always pay on time, not always the case. I didn't flip them I only bought, lived in, and sold them.
In the Netherlands we have the issue, if you have a loan from a bank you cannot rent it out. IT must be loan free the bank cannot trow them out if thay don't pay the rent..
What if the mortgage is cheaper than rent? Rent is $2k for a 1 br where I am.
If you own a house, you are a landlord to the most responsible renter ever...yourself.
Location, cost, and maintain if you spend all your cash stupidly rent.
I got something what about land no buildings on it just land a video on that would be good too lile the how's and donts and may be more ???
Buy the right Liability first to shelter depending on your ability, then pursuing to build an asset.... thanks to share this mindset video....
If the house cannot pay for itself then it scores a liability.
Renting a house is not better then owning a house with a mortgage imo.
What are the dowside of buying a rental house?
Don't ever get a house then, at least in the states ..
Wende & rent homs
Wende gut Oro
Bankiero
Ok!🎠
Finally explained lol
Get to the point
Excellent content. That’s all I have to say.
I hav 2 House's I don't pay any money for them , don't rent other people house stop being slave
Calling something an asset just because it brings you money or a liability if it costs you money is too simplistic a point of view. You have to consider the overall value of the item and consider both its monetary and non-monetary impact to you. If your house is able to generate a $1 income for you, does it suddenly becomes an asset simply because it's now "income generating"? What if the house itself doesn't generate income but since you are able to impress your clients with it, it allows you to bring in more business, is it still a liability?
Great video!!
Just want to thank you so much. I was trying to figure this out last night on my own and feel so blessed that i found your videos this morning. Thank you for your work. Keep it up. I am a new subscriber and look forward to learning a lot from you. Blessing you with continued success and material and spiritual riches.
I appreciate your kind words, and I am happy to help any way I can.
By the way, Welcome to the Family!
You inspired to start my own UA-cam Channel!
Thanks for that bro.
Btw can you tell me how do you record your voice?
nice channel
As both a landlord and a home owner I can emphatically tell you that buying a house to live in is in fact an asset, regardless of any rent/house hacking you may or may not do.
Spend $1000/month on rent and have nothing to show for it after 10 years, or buy your home and spend $1000/month in mortgage+expenses and after 10 years you have (tens of) thousands in equity to show for it.
It's literally that simple; rent and pay your landlords mortgage, or just pay your own mortgage. What I always tell my tenants is that if they plan on renting for 3 or more years they should run their numbers to see if buying is right for them, if not then they should rent as real estate costs for short-term property holders cut too deeply into any equity they may have gained.
I get your point, but even if you may have tens of thousands extra in cash after so many years which is quite insignificant in my opinion. Over the span of 10-20 years. The maintance and everything else has to be taken in consideration. Which could make people broke in the first place but lets even take that aside. Most people take a mortage for max size so they can have their “dream life” the problem is thats they say oh this is my house. Well it isnt. The house is from the bank. Look what happens when you cant pay mortage for a couple months. With rent you can get out the same month. You are mobile and can move quickly. That even aside. You dont know what the market is going to do. If there is an reccesion, you wont be able to make any profit on your property. You can even go into major debt because you have a big mortage over your head which needs to be payed of completely. people sell in distress which leads them with more debt then when they bought. Now lets say everything works out wonderfully and your marriage stays intact etc etc. you found your dream home in which you will stay your whole life.. you will pay 10% out of your own pocket for downpayment and broker costs. That money is gone. When you sell the home you will have to pay another 10% on your new home. So when you want to sell your house you already need to have the house in 20% + equity to even break even. Not even counting the rates you pay on your house which many people forget.. after those 20-30 years? You will pay your house twice on the rate. And then many people say dude i have a fixed rate for 15 years. Well not when you buy a new home. You pay the current market conditions again. As statistics say that most home owners move in 6-8 years. This is exactly the same curve inversion where you start to have payed all your rate off. But you buy again and you are in the wheel again. There are many factors to consider. When i can rent a extra floor out or something or rent the whole property out, yes thats what i can an okay investment. But to have all or most of my money in my home which isnt making me money because i cant rent it out and i stay in it , it doesnt sound like a great investment but a liability. I rather pay a bit higher monthly rate and stay liquid and mobile and put my money in other endeavors. Hope it helps somebody.
@@stormtraders That's a real common problem, but that speaks more to people's tendencies to over-spend more than anything. Like everything, people really need to take a step back and honestly assess whether or not they can afford what they are buying.
If people spend every penny and just cannot budget, then sure rent do you only have the one payment but they are doing themselves a horrible disservice in the long run.
Also the down payment you pay isn't lost, it's direct equity in the property that you will have access to when you sell or if you chose to refinance. Realtor and other closing costs are lost, i'm with you there, but this is why I don't recommend people buy if they don't plan on staying for a minimum of 3 years.
And to your point, Market conditions change but the only thing that matters is when you enter the market and when you leave. Since we all need somehwere to live that means you're in from when you are ~18 and out when you die. If your house is worth less due to market factors but you want to sell, well good news for you because everyone else's home (including the one you're looking at) are also worth less. Over time the market trends up, so don't worry about short term down trends and just buy what you can afford when you're ready to buy.
Or you can keep renting and paying my mortgage, HoA fees, maintenance, and taxes on the property... ohh and paying for my new car because rents going up $200 and you're locked in on a 2 year lease so you're not "mobile" at all. Thank you for renting... is what a scumbag landlord would say lol
Well il keep it more shorter for people who still dont get what i said above. Look around you. Ive hardly if ever seen someone got rich from buying their own home. You have to think outside the box. There are other endeavours which are far greater investments. Which cost less.
Succesfull people know this. Sheep dont
Rent where you life, own what you can rent. Thats how i goes
@@stormtraders Let me keep it even shorter;
You rent for $1000/m and have nothing to show for it at the end of 10 years.
I own and spend $1000/m in total housing expenses. I have thousands in home equity built every year.
Remind me again how renting is better?
If it works for you great. You also said you are a landlord and rent it out. Thats the right thing to do. Only most people wont do that and buy their home with 300k debt over their head. Sure you can put it in bricks and stones but atleast rent it out. If you stay in your home for 30 years and have everything payed of. Now it has become an asset. A debt free asset to be precise. Statistics show though that most wont stay in their home and completely pay it off but buy a new and bigger home with a new mortage so they stay in the wheel again when buying again. Even if you have payed your house of debt free. “And you have something to show for it” you have payed your house twice with ratecosts at the end of your mortage. I would suggest you do the math for yourself what you pay each month combined with the rates. Which many people seem to forget. If you calculate the rate with it divided over 30 years. You pay more each month then a renter does😉.
This question is one of the most common ones! and most people have the wrong answer! I bet that everyone around you had told you "how much its is important to invest in busying your own house!" Unfortunately, buying your house is never considered as an investment! you don't make money out of your house, you pay money on your house! your house doesn't generate an income for you, it takes money from you!
Thanks for this video, pls kindly make more video on investment on property management
Asset = liability + equal share. Same rule applies on every finance equation. Liability is not always bad at all. It depends on how you use liability.
Your statement is interesting, please elaborate.
Good info great vid ..!
Love this channel!
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Boom! now you got it for free.
Simple and to the point!👍🏾
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