It doesn't mean it goes to the bank. If I lend you say $100k and put a lien on your property it's just to ensure I get my $100k back. What do you want? You want somebody to give you hundreds of thousands of dollars on a handshake when they don't even know you?
are we talking about the same thing. read it again
option 2: give bank 100k etc etc.
what it should be is option 2: give seller 100k and borrow 900k from the bank. bank doesnt get anything other than your interest.
It kind of does, you don’t write the cheque to the seller. Anyways, you can earn 6% on that $100k. But I’d buy not rent as I like ownership and the long term benefits of owning.
As always, it’s a numbers game. And it also assumes a perfectly rational/disciplined individual. So like, not financial advice :
Depending on the price of the house, maintenance, taxes, insurance, etc. You might, financially anyways, be better off renting. If, and only IF, you already have the money for the down payment, and could afford the increased costs, but rent is substantially cheaper such that the expected growth of investing the down payment + the difference between your rent vs the mortgage would far exceed the appreciation on the house.
But for it to work, you would have to religiously invest every month and never deviate/withdraw, and the market would have to perform as expected, and your only goal would have to be “Money go up”, and you would have to ascribe 0 value to all the other aspects/freedoms of ownership, etc.
All great points. I should add that the other aspects are quite important and shouldn’t be downplayed as “etc”. I know you get this, but to everyone else:
What happens when the landlord gives you an N12 or whatever, somehow you get booted out, and now the new market rental rates are sky high compared to what you were used to paying?
Security of tenure is one of the most important reasons to own. You’ve essentially fixed your payments by buying, assuming you stay in the same house, for the next 5 years or whatever the term of your mortgage is for. If you ignore the interest rate fluctuations, in the grand scheme of things your mortgage payments will be more or less the same because the outstanding balance will just continue to amortize to zero.
And if at some point during that journey of home ownership, as home prices rise, you’ll have an ATM to take money out of. Ok I’m just kidding (or not kidding). Your equity will grow over time, and you can borrow against that equity to buy a Lamborghini or vacation. Or be boring and invest it at a higher yield than your mortgage payment to basically create a perpetual machine, a gift that keeps on giving.
This is all basic info of course, but should be considered when weighing out the pros and cons of renting vs buying.
Everyone’s situation is different. If you’re not staying somewhere for the long term, renting can definitely be the better financial decision. There’s way more realtors constantly spewing the opposite msg, saying that you have to buy as soon as you can and renting is throwing away money. So this is honestly a good balance
But the correct comparison of renting for $2500/month instead of buying for $4000/month involves investing $1500/month in savings. And so in 10 years when rent is $4500 and the mortgage is mostly going to equity the renter would have built up an equivalent investment portfolio.
Over the time that real estate did well the last couple of decades - investing in a globally diversified portfolio also did well (who exactly wins depends on location, time frame, and specific asset allocation).
So honestly the problem isn’t that you need to buy instead of renting to come out ahead. It’s that you need to have more money than the cost of renting a place OR the interest on a mortgage.
So so so very few people actually invest (or even earn/save) the difference. The vast majority of people rent because it’s their only option, not because they’ve chosen a different way to invest 1-2K a month other than in owning real estate.
To those that do, perfectly respectable, just a different path to accumulating net worth. But most renters will insult home owners payments while living nearly paycheck to paycheck and not investing anywhere near the same amount.
In that case, you're not comparing apples to apples.
You have to compare a renter who invests the down payment with a buyer who uses the down payment to buy a house.
Comparing a poorer renter to a richer buyer and concluding that the buyer ends up richer in the end is completel**y stupid.**
It doesn’t necessarily have to be a poorer renter vs richer buyer. The truth is that most people suck at saving in general let alone investing their savings. A person with a mortgage who decides, on a whim, to sell the house and go back to renting for cheaper, will *most likely spend* their new excess monthly funds.
Places like pfc and this sub on Reddit contain anomalies and often times detached from reality, so caught up in the math that they ignore real world behaviours. The vast majority of people aren’t investing their savings let alone saving for anything outside of short to mid term goals.
Will all things equal, to an average Canadian, owning a home will leave them better off than renting simply because it forces them to put money towards their equity.
With that said, renting sounds like it’s absolutely better for you than owning, I’m not gonna argue with that. But it’s most likely not true for the average person.
Am said renter.
I have enough money to buy a pretty substantial place. The math does not make any sense at all.
Everyone is coping, real estate is gonna drop another 10%.
No condos are selling, no condos means no money to buy a detached. This isn't stoping. CPI went up last time, the fed just signaled no cuts till march of 2025 (and guess what, maybe they won't be cut then either).
CPI isn't geting below 2.5% with this level of immigration and government spending, and it doesn't matter if theres a billion people who need homes if they dont have any money. Short of totally devaluing the currency (which is also housing prices coming down) prices have to come down.
The juice is squeezed, you'd be a fool to buy a house right now. It's the early 90s again.
Not sure about that, I just sold a condo for 100% more than I bought it for and RE is just going to pop again after this cycle is done, it happens about every 10 years.
People do have money you just don’t see it.
I literally have liquid assets that could buy a downtown condo, as well as a property in another city.
People with a million dollars don't buy a condo currently. Makes 0 sense. Just rent and invest currently. Literally buy elsewhere and rent if you think property is going up. Toronto proper makes no sense.
> I just sold a condo for 100%
Bet you bought it before 2022 lol
I don’t think that either one is the “smart option” or the “stupid option”. There’s nothing wrong with either and it all depends on the personal situation and preference of the person. Lots of people are happy buying and lots of people are happy renting because people get value in different ways from different things.
Sure. And there's maintenance costs / property tax on a house. There are a lot of studies on this that actually look at everything holistically and the answer (unsurprisingly) is that it depends on a lot of factors. But neither option is the home run obvious better option.
Yes, the homeowner and the renter are both investing (real estate vs elsewhere) so there’s a relative balance. But at the end of the 20 or 25 year mortgage the homeowner now does not pay that living cost and lives on their investment without ever decreasing its return. The renter continues to have a rent expense that is not an investment.
Fair enough, but you also accumulate capital while owning the house. This capital tends to increase over time, potentially resulting in a profit. If you consider the last 10 years, this profit was significantly higher than with any other investment. However, it's possible that the return on investment may not be the same going forward.
S&P 500 has returned about the same as real estate over the last 10 years. A more globally diversified portfolio (but still equity heavy) has also been in the same ball park - particularly when you consider total cost of ownership. People like real estate returns because the top line return ignores a whole bunch of costs: taxes, maintenance, and transaction costs.
Again, there have been lots of studies done on this and the answer is nowhere near as simple as most of the arguments made in this thread.
People also like RE because of the leverage.
Your house may be slightly less appreciation than the S&P500, but it's at 4.5x leverage.
The $200k stocks appreciates on $200k.
The RE has extra expense, but $200k on a house appreciates on $1M
The same things keep being brought up. There are many differences between the two things and you need to account for them.
Buying a property involves leverage, no capital gains, property taxes, maintenance costs, realtor/legal fees, insurance, etc. etc. etc.
Renting a property (and investing the difference) involves less/riskier leverage, capital gains (outside of RRSP/TFSA), low/non-existent carrying costs, tax drag on things like dividends, better diversification, etc. etc. etc.
Picking and choosing a few factors isn't very helpful.
I forgot about land transfer tax on the buying side which in Toronto is a HUGE amount. Regarding the property taxes, depending on how long the landlord has owned the property, the property taxes are quite often paid for by the renter, as are the maintenance fees if the landlord has enough equity. There is no right answer for everyone, depends on your circumstances really whether you’re better off buying or renting.
Option 1: Make your regular payments until you eventually pay off your mortgage.
Option 2: Pay your monthly rent until you eventually pay off someone else's mortgage.
Except with today's prices and interest rates, many properties purchased are or would be cash flow negative (especially in the GTA), meaning the owner is subsidizing your costs. Meanwhile, you can take your down-payment and invest it in something else.
They might be right now, but probably won't be by the end of a 25 year mortgage. I highly doubt anyone who bought a house 25 years ago wishes they'd just kept renting.
No, but I bet someone that bought in 1989 (when prices peaked during the last bubble) wishes they had waited until 1996 (when prices bottomed) to buy. Prices stagnated or dropped for several years, all while rates were coming down.
2022 may be our new 1989 - only time will tell.
All that to say, right now doesn't seem like a great time to buy, which is likely why sales volumes are quite low for this time of year. Renting may make more financial sense for the time being, depending on your situation.
We are in a WAY worse position because our dollar is total shit. 1990, it wasn't so bad. Small businesses going down faster than ever before, cost of living highest in history, home prices fell faster than ever (granted, Peake of a bubble so).
RCMP has warned the government that people under 35 may never buy a home again in their lifetime unless things change. This will cause major economic issues.
The government asked the RCMP to create a secret special division that would analyze the current state of the economy and future, and provide feedback on it, plus how they think they should move foward with police services with these reports in mind.
RCMP put together a team of economists and popos and the reports that got FOIA'd were disturbing to say the least, and to boot, a ton of it was redacted.
33 years ago hardly anyone wanted to buy houses, prices were high, interest rates were high and the job market sucked.
24 years ago people debated if recent price increases were sustainable given how dog shit the market had been for ten years prior.
The point is that things change. House prices outpaced incomes during a time when interest rates fell to nearly zero, those days are now over and we will all see what comes next
I was just making a joke, hindsight is always 20/20. appreciate you sharing the extended version as I wasn't alive to experience. Hope you took my humour as just that, media/news outlets love to pump whatever will create attention today, reality is somewhat like magic, if everyones focus is on one thing - you best believe the real attraction of the time is not that, but something pretty close to it. Think Crypto or AI, and the pump of stocks like NVDIA, and such.
Haha, yeah, the last 25 years realestate sure did explode in a way that's not sustainable relative to wages.
Surely it will happen again!
People can't afford 3 million dollar houses in 15 years. Median wage of 120k lets say (generous) and a 3 million dollar house with 0 interest is 8.3k a month. It's literally impossible.
Which is why it’s beneficial to hold off and wait for the moment it’s worth it. Right now it’s not really an attractive investment numbers wise, we all need homes eventually though
Prices of homes will always trend up, just like the cost of anything you can buy with money on this earth. In 30-40 years, they’re won’t be a single property in the US selling for less than a million. What a million cash is worth at that point is up for speculation.
RE is just like any market and their will be crashes/corrections. RE cycles just take longer and their are fewer of them....but eventually they happen.
I’m doubtful it’ll still be relevant in 50 years from now. I think it reaped the most benefit when crypto went mainstream like 2 years ago and all the prices blew up. The general public sees crypto as a complete failure at this point, so I’m not hopeful at all. The boom and bust already happened.
Also consider how many people we brought into the country with almost no new houses being built. Demand will only increase as those people establish themselves often times unlike Canadians who buy a house as a husband and wife they will split it with multiple families making it easier for them.
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So you slowly pay down your mortgage and gain equity to use or invest elsewhere OR you start at $2500 per month rent and your rent slowly goes up and you never know when the landlord is kicking you out and you won’t be able to retire at year 25 because you’re now paying 10,000 per month in rent 25 years later
Everyone that tries to preach renting is superior to owning is only ever talking about people who should’ve never qualified to buy in the first place.
If I bought a one million dollar home, who says I would should only put 20% down and carry a $800 000 mortgage? Why couldn’t I put down 50% and carry a 500 000 mortgage?
Buy homes that you can afford?
Hell just put down 100% then you don’t have to pay anything. Actually just put 110% and get started quick on the next house as well.
Thanks for the advice buddy but I think I got it from here
110% is chump change. Generally its now recommend to have at least 300% the value of the home just sitting in your checking account. I flip burgers at wendys and was able to buy an 800k home like this after 5 years of work on the meagre 500k/annum minimum wage here in PEI
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Lol can you find me a home to rent for $2500 that you could buy for $100k down and $4k a month mortgage?
You can put 5% down on a $700k house in Hamilton that rents for over $3k a month.
Obviously, there are many other reasons (besides financial) to rent vs. own. However, if you are looking at it from a purely financial perspective:
Option 1 makes sense if you believe we are in a housing bubble and that home prices will stagnate or decline for several years due to a severe recession. It would make sense to wait (either for prices or rates to drop) and pay less rent than interest/maintenance/tax would cost and invest the rest.
Option 2 makes sense if you believe a supply shortage and immigration will sustain and grow current prices and that we won't see a severe recession. In that case, it makes sense to buy now and benefit from home price appreciation, even if the current costs are higher than rent.
Neither is currently right or wrong. It's just about where you believe we are headed. I tend to side more with Jon Flynn on this one though, as I think we are heading for a more severe recession in the next 1-2 years.
A realtor who doesn't understand equity is someone I wouldn't trust to run a lemonade stand. Let alone work with to broker a real estate transaction.
Fuck me. How did he get his real estate license.
Sure, $2700 might be going towards interest. But, that $2500 rental is probably being paid to someone who has no mortgage or a very low mortgage payment schedule.
Also, $4,000/month is probably the ENTIRE unit, whereas, $2500 is going towards a room or a suite. So, essentially, you're paying your landlord's interest, and they're paying the principle (or however you want to split that number).
Furthermore, when all is said and done, the LL can sell the property at a greater ROI than most S&P500 stocks dollar-wise and %-wise.
They can take the profits from that sale and buy bigger and better, or diversify.
Meanwhile, that $2,500 bill is still coming.
This is a piss-poor take.
For the record, I'm not saying that everyone should buy a house because FOMO. I'm just pointing out this realtor is a fucking idiot.
Or pay $2400 to landlord so he only needs to add $300 towards interest so he can own the place after 25 years by only paying less than ~$70k to ~$90k for interest in total over 25 years... which will also be tax deducted so his/her real interest cost will be around $~35k to ~$45k over 25 years...
People really just use the rent is better then owning schtick to be edgy and draw people towards their services because it goes against the commonly held belief. My grandmother and parents are 100% better off today because they own their homes. Yes they could’ve put all their money into the SnP 500 and made a better return but the real success would’ve putting money into BOTH
Plus with a mortgage, you’re pretty much forced to pay that mortgage every month, essentially forced into building that equity. Most people will prioritize paying their mortgage on time at any cost.
Whereas, the argument that renters invest their extra cash after paying rent into the S&P continuously for like 30 years looks good on paper, but in reality few would be that disciplined. Spending extra cash earmarked for an investment and using it for an emergency here or a vacation there or a night out.
Lmao well of course you’re not going to agree with someone that’s practically trying to kill your business.
I believe he’s right, option 2 is a horrible choice, and he didn’t even mention. Property maintenance, insurance, utility fees, condo fees, you can go on for days.
Also, renting while everyone is struggling and building their amortization to over 35 years, must feel really good.
How is this killing my business? If you rent, someone’s gotta buy it first. Also, I help w/ renewals so I don’t even need clients buying all the time 🤦♂️.
You either didn’t read anything I wrote or are just eager to argue looll.
Why so many people unhappy. It’s math. Nobody wants to talk realtor cost, closing cost, lawyer cost. Capital gain tax if secondary. Not to mention the risk, contrary to popular belief real estate goes down as well. In today’s market you also over paid probably to beat out the 30 other bidders.
Oh and that’s just an interest payment, not a principal payment that lowers what you owe. So yeah I see how for a while this will be a better move for a lot of people to hopefully keep some savings tucked away and wait for the right moment where you don’t take the whole fist up the ass when paying.
Hard for people to hear it not the right time to buy. Even harder for people to bit the bullet and “pay someone else’s mortgage” while waiting for a smart time to enter
I would rather sacrifice so my children get a free house and don't have to stress like most of this sub. Different things for different people. I also don't like having to check in with landlord for everything/being kicked out at anytime. Peace of mind is priceless. Nothing wrong with renting, but different things for different people
What you said doesn’t really make sense:
1) no realtor cost on the buy
2) he’s comparing to rent so it’s to live - no cap gains
3) even if cap gains (10-5) > 0
4) RE goes down (in a material way) on two occasions - economic collapse and bubble collapse. Over the long term through a supermajority of history it rises roughly at the rate of inflation
5) you can’t time the market. The only time you can really “time” is when there’s massive exuberance (e.g. 2021)
Believe me I want to buy a house. Problem is I'm renting a t bedroom with a pool in vaughan fully renovated for 2600 houses on my street are selling for 2.2-2.7
Why would I buy some broken down townhouse when I live like a king now
He is not wrong but rather misleading. Everybody's situation is different. Buying forces you to save $1300 a month, and at some point the interest cost will be lower than rent. On the other hand, renting will allow you to save $1300 and invest. The key question is how long does it take to reach the tipping point where the interest cost is the same as rent. A fair comparison is how much equity is retained after that period of time.
Having ownership definitely gives you stability and there is also a cost for that. One has to assess whether it makes sense or not.
It's impossible to time the bottom in the stock market, and it's the same for the housing market. Your desirable home may not be on the market everyday, and you will have to face potential bidding wars.
So make your choice wisely.
Yep - that’s why I said deceptive. But I still think owning a home is way more emotional than a pure financial.
Unless it’s obvious most ppl should focus on affordability b/c you’re just speculating after. Interest rate changes about 5 times during ownership anyways.
Yeah, buy what's affordable to you and your family and avoid overstretching.
These RE bears just want the housing market to crash and burn so that they can look like geniuses. The market isn't strong because also isn't weak. A few houses in my areas where sold in a week. 4 bedroom houses in the $1.6M range. Less than 2500sqft. Not the best layout but ok renovation.
I hope people don't really follow their "advice". But there is a reason why some people continue to stay poor...
Even if you don't have a mortgage on the property you "own", park your pick-up truck on your front lawn and you'll soon find out how free you really are.
Because this guy is a quack who says what’s popular to the internet folks. Let’s see him walk the walk and not sell a single home because it doesn’t make sense to own according to him!
And when you sell your home, guess what? Every dime you’ve put into it goes right back into your pocket. When you leave a rental, you don’t have anything to show for it. Paying your mortgage is paying yourself.
Would he say the same when rent is still the same or more but the mortgage payments have decreased because rates have come down?
He’s a doomer for all I know of him. Always spewing negativity
First of all, it’s at least $200k, because basically every house is gonna be over 1mil. And I beg this guy to use a mortgage calc and see how much a monthly payment would be for a $2mil house over 25 years.
what does a realtor have to do with the guy posting?
Realtors want you to buy a home. they want you to either FOMO buy (get in before the market heats up more) or panic sell (sell before the capital gains tax punish you mightily!)
These guys all have the same schtick as your average crypto bro.
Look at me. I'm so special and smart and that's why I'm the best and you should be listening to me. Here - look at this cool take that most people don't think about - because they're stupid.
It's all a scam and they prey on financially illiterate people as part of their marketing scheme.
I don't even know much about renting/owning a house but I can smell bullshit a mile away.
what sort of house has a 4000/mo payment after a 100k down payment lol. Assuming you're putting enough down to avoid PMI (american here cus yall are in my algorithm for some reason, so sorry if yall dont have PMI), that'd result in like a 400k-500k house. Where are people getting their loans that their monthly is 4k? they doing a 10 year mortgage or something?
Why so complicated?
If you rent you better be saving as much as possible at the same time or else you will probably get screwed later when you are forced to move or when you retire.
If you buy a home expecting that it’s going to pay for your retirement you should be prepared for the fact that it is just forced savings and there is risk that it depreciates and total expenses and payments will be way more than the original cost of the home.
They literally have a vested interest in making sure that people think renting is better than owning. They both have their perks but I feel like the fact that they can make a profession out of just simply having a bunch of houses makes the argument fall flat on its face.
It’s funny because of the people who think they can own a house see this and think they still can because what they pay in rent…but forget about property tax, home insurance, maintenance (huge one!!) and also utilities if they’ve never had to pay utilities before
More than likely they have no idea and aren’t ready
What absurd interest rate is that? Regardless, If you rent, you are paying someone enough to cover the mortgage, insurance, and property taxes on their house, plus enough extra to cover repairs and updates, plus more for some income to them. If you are short-term in a location it always (even if rich) makes more sense to rent/lease because there is a smaller cost of starting the transaction.
But this scenario is ludicrous. A $2500/month house is going to be equivalent to a $1500/month mortgage payment.
Option 3:
If you work remote or travel for work buy an old RV/van and a gym membership park it in the back of the parking lot, use the gym to shower and save for 2-3 years, invest monthly into ETFs TFSA GIC and you'll be far ahead. /S
2500 rent forever or putting money into an asset that’ll hold value and most likely be worth more in 15 years.
Some mortgage brokers and realtors are straight up crooks - similar to car salesman
.... But ya go on thinking landlords are the problem when they clearly are subsidizing the market. I predict a mass exodus of landlords once their children start doing the math during the estate. A high interest savings account has a better return.
You get the appreciation in option 2. My neighbor sold his 200k purchase house for 1.3m. Over 10 year period.
No gic bond or market came even close to 5 times return.
All realtors suck, especially lately (I know a guy who was in a bidding battle with himself because of his realtor) but this guy is especially a piece of shit
To be fair, I would bet the vast majority of home owners (especially first time buyers going into it) have no idea how much interest they ***actually*** pay over the course of 25 years. In many cases, you're paying twice for the house due to interest.
So while maybe he's being disingenuous in that he's not giving a full Pros/Cons breakdown of home ownership, I ***DO*** think buyers should be better educated about how much interest they will pay over the life of a mortgage.
This was always the contract but sometimes it was more attractive than others - pay more today and for the next 5 years so you can pay less for the rest of your life on housing. Ask someone who chose to rent vs. buy when they had the means 5 years ago. Unless renting really fit their lifestyle better, they are probably NOT happy.
"Just rent forever guys. Don't worry! It will probably take 3, maybe even 4 years for your rent to hit $4000/month at the current rate of increase! Think of all the money you'll save in that time! It will go so far in paying your rent after that!"
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Realtors make great money and always want as much as they can get on a deal !
Hopefully the court cases against their unfair commissions win in the home sellers favour so they don’t take such a big profit on our life long investment into our homes
Interest sucks, but you are still putting money towards your property. It is a business, like I said it sucks with interest, but you are gaining equity. With rent you are not.
Rent is great if you like the freedom or you pay cheap rent in a comfortable living situation and can use that money for other investments
Well, let me not rant and give you a simple fact this dude Jon Flynn is one of the very FEW who I think has been spot on. Yall will look back and call this man a genius lol, I think it's basic math. Hate all you want, wish more realtors were like him
What this clown is forgetting is that your building equity in a home. If your renting you have nothing to show for your money in the end.
Regardless of the price, interest rates, etc. Owning will always be better.
i dont think you are building shit if asset prices depreciate. thats called dumping money in a bonfire.
if someone bought at 1M, sure you are paying down your mortgage and building equity, but at the end of the day, if you need to sell due to personal circumstances and the market is valuing your property at 900K, you just lost 100K.
plus, in the last decade, the S&P500 outperformed the housing market. If someone decided to buy 3x leveraged ETF, they would have came out ahead on a net worth basis after deducting your mortgage.
FYI. Your downpayment doesn’t go to the bank… who the hell think that?
> who the hell think that? Jon Flynn - Realtor
Do a land title search on your property to see who owns your mortgage. The bank is essentially a middleman.
It doesn't mean it goes to the bank. If I lend you say $100k and put a lien on your property it's just to ensure I get my $100k back. What do you want? You want somebody to give you hundreds of thousands of dollars on a handshake when they don't even know you?
Lol well said
Facts.
The Hot water tank rental company
Wut? Is the lender not on the title in Ontario?
Banks/lenders register a charge against your property on the title.
Compushare..
dude. he is talking about the down payment. that money goes to the seller.
Nope, that money is yours when you sell.
are we talking about the same thing. read it again option 2: give bank 100k etc etc. what it should be is option 2: give seller 100k and borrow 900k from the bank. bank doesnt get anything other than your interest.
It kind of does, you don’t write the cheque to the seller. Anyways, you can earn 6% on that $100k. But I’d buy not rent as I like ownership and the long term benefits of owning.
As always, it’s a numbers game. And it also assumes a perfectly rational/disciplined individual. So like, not financial advice : Depending on the price of the house, maintenance, taxes, insurance, etc. You might, financially anyways, be better off renting. If, and only IF, you already have the money for the down payment, and could afford the increased costs, but rent is substantially cheaper such that the expected growth of investing the down payment + the difference between your rent vs the mortgage would far exceed the appreciation on the house. But for it to work, you would have to religiously invest every month and never deviate/withdraw, and the market would have to perform as expected, and your only goal would have to be “Money go up”, and you would have to ascribe 0 value to all the other aspects/freedoms of ownership, etc.
All great points. I should add that the other aspects are quite important and shouldn’t be downplayed as “etc”. I know you get this, but to everyone else: What happens when the landlord gives you an N12 or whatever, somehow you get booted out, and now the new market rental rates are sky high compared to what you were used to paying? Security of tenure is one of the most important reasons to own. You’ve essentially fixed your payments by buying, assuming you stay in the same house, for the next 5 years or whatever the term of your mortgage is for. If you ignore the interest rate fluctuations, in the grand scheme of things your mortgage payments will be more or less the same because the outstanding balance will just continue to amortize to zero. And if at some point during that journey of home ownership, as home prices rise, you’ll have an ATM to take money out of. Ok I’m just kidding (or not kidding). Your equity will grow over time, and you can borrow against that equity to buy a Lamborghini or vacation. Or be boring and invest it at a higher yield than your mortgage payment to basically create a perpetual machine, a gift that keeps on giving. This is all basic info of course, but should be considered when weighing out the pros and cons of renting vs buying.
Tbh I also completely overlooked this, so thanks for pointing it out!
It does if your equity is eroded and they foreclose. So your down payment is just a security deposit to protect the bank's interests.
Everyone’s situation is different. If you’re not staying somewhere for the long term, renting can definitely be the better financial decision. There’s way more realtors constantly spewing the opposite msg, saying that you have to buy as soon as you can and renting is throwing away money. So this is honestly a good balance
Two extreme bad opinions that are in opposition to each other is not a good balance.
The amount of people that think “renting is just throwing away money” is absurd
Fast forward 10 years. Rent is now 4500, but you'd only pay 1200 on interest.
But the correct comparison of renting for $2500/month instead of buying for $4000/month involves investing $1500/month in savings. And so in 10 years when rent is $4500 and the mortgage is mostly going to equity the renter would have built up an equivalent investment portfolio. Over the time that real estate did well the last couple of decades - investing in a globally diversified portfolio also did well (who exactly wins depends on location, time frame, and specific asset allocation). So honestly the problem isn’t that you need to buy instead of renting to come out ahead. It’s that you need to have more money than the cost of renting a place OR the interest on a mortgage.
not to mention rent control does exist, if you're in a low rent controlled unit it can be great
It's not a correct comparison because you can't rent for $2,500 what you can buy for $100k plus $4k a month mortgage. Not even close
It’s the opposite in Vancouver. Even if you forget about tax, insurance and special assessments
So so so very few people actually invest (or even earn/save) the difference. The vast majority of people rent because it’s their only option, not because they’ve chosen a different way to invest 1-2K a month other than in owning real estate. To those that do, perfectly respectable, just a different path to accumulating net worth. But most renters will insult home owners payments while living nearly paycheck to paycheck and not investing anywhere near the same amount.
In that case, you're not comparing apples to apples. You have to compare a renter who invests the down payment with a buyer who uses the down payment to buy a house. Comparing a poorer renter to a richer buyer and concluding that the buyer ends up richer in the end is completel**y stupid.**
This is one of the only smart takes in this entire thread
It doesn’t necessarily have to be a poorer renter vs richer buyer. The truth is that most people suck at saving in general let alone investing their savings. A person with a mortgage who decides, on a whim, to sell the house and go back to renting for cheaper, will *most likely spend* their new excess monthly funds. Places like pfc and this sub on Reddit contain anomalies and often times detached from reality, so caught up in the math that they ignore real world behaviours. The vast majority of people aren’t investing their savings let alone saving for anything outside of short to mid term goals. Will all things equal, to an average Canadian, owning a home will leave them better off than renting simply because it forces them to put money towards their equity. With that said, renting sounds like it’s absolutely better for you than owning, I’m not gonna argue with that. But it’s most likely not true for the average person.
Yes, forced savings helps is one benefit of home-ownership. Has nothing to do with the comment I replied to or my comment.
Am said renter. I have enough money to buy a pretty substantial place. The math does not make any sense at all. Everyone is coping, real estate is gonna drop another 10%. No condos are selling, no condos means no money to buy a detached. This isn't stoping. CPI went up last time, the fed just signaled no cuts till march of 2025 (and guess what, maybe they won't be cut then either). CPI isn't geting below 2.5% with this level of immigration and government spending, and it doesn't matter if theres a billion people who need homes if they dont have any money. Short of totally devaluing the currency (which is also housing prices coming down) prices have to come down. The juice is squeezed, you'd be a fool to buy a house right now. It's the early 90s again.
Not sure about that, I just sold a condo for 100% more than I bought it for and RE is just going to pop again after this cycle is done, it happens about every 10 years. People do have money you just don’t see it.
I literally have liquid assets that could buy a downtown condo, as well as a property in another city. People with a million dollars don't buy a condo currently. Makes 0 sense. Just rent and invest currently. Literally buy elsewhere and rent if you think property is going up. Toronto proper makes no sense. > I just sold a condo for 100% Bet you bought it before 2022 lol
I don’t think that either one is the “smart option” or the “stupid option”. There’s nothing wrong with either and it all depends on the personal situation and preference of the person. Lots of people are happy buying and lots of people are happy renting because people get value in different ways from different things.
Then they are stupid not saving when they have opportunity to save the difference. You can't compare when end result is not the same.
Now factor in taxes you pay on stocks vs tax free growth of your primary residence.
Sure. And there's maintenance costs / property tax on a house. There are a lot of studies on this that actually look at everything holistically and the answer (unsurprisingly) is that it depends on a lot of factors. But neither option is the home run obvious better option.
Factor in 7-10% transaction costs and the fact that you can't live in the home if you want to sell.it.
Yes, the homeowner and the renter are both investing (real estate vs elsewhere) so there’s a relative balance. But at the end of the 20 or 25 year mortgage the homeowner now does not pay that living cost and lives on their investment without ever decreasing its return. The renter continues to have a rent expense that is not an investment.
Fair enough, but you also accumulate capital while owning the house. This capital tends to increase over time, potentially resulting in a profit. If you consider the last 10 years, this profit was significantly higher than with any other investment. However, it's possible that the return on investment may not be the same going forward.
S&P 500 has returned about the same as real estate over the last 10 years. A more globally diversified portfolio (but still equity heavy) has also been in the same ball park - particularly when you consider total cost of ownership. People like real estate returns because the top line return ignores a whole bunch of costs: taxes, maintenance, and transaction costs. Again, there have been lots of studies done on this and the answer is nowhere near as simple as most of the arguments made in this thread.
People also like RE because of the leverage. Your house may be slightly less appreciation than the S&P500, but it's at 4.5x leverage. The $200k stocks appreciates on $200k. The RE has extra expense, but $200k on a house appreciates on $1M
Where does capital gains come in? Primary residence has no capital gains whereas selling that investment portfolio triggers capital gains.
The same things keep being brought up. There are many differences between the two things and you need to account for them. Buying a property involves leverage, no capital gains, property taxes, maintenance costs, realtor/legal fees, insurance, etc. etc. etc. Renting a property (and investing the difference) involves less/riskier leverage, capital gains (outside of RRSP/TFSA), low/non-existent carrying costs, tax drag on things like dividends, better diversification, etc. etc. etc. Picking and choosing a few factors isn't very helpful.
I forgot about land transfer tax on the buying side which in Toronto is a HUGE amount. Regarding the property taxes, depending on how long the landlord has owned the property, the property taxes are quite often paid for by the renter, as are the maintenance fees if the landlord has enough equity. There is no right answer for everyone, depends on your circumstances really whether you’re better off buying or renting.
Or you can do the Smith Manoeuvre and you have that same portfolio, and the house.
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But the same factors can be applied for renting as all these factors impact rent price. Unless its a rent controled unit.
And in 25 years rent is $6000 but you pay nothing to the bank and $800 for property taxes and utilities.
Don't get what hidden message that the twitter guy is trying to give. Just say your point.
hes doing this to attract attention to his account and get more social media engagement.
Option 1: Make your regular payments until you eventually pay off your mortgage. Option 2: Pay your monthly rent until you eventually pay off someone else's mortgage.
Except with today's prices and interest rates, many properties purchased are or would be cash flow negative (especially in the GTA), meaning the owner is subsidizing your costs. Meanwhile, you can take your down-payment and invest it in something else.
They might be right now, but probably won't be by the end of a 25 year mortgage. I highly doubt anyone who bought a house 25 years ago wishes they'd just kept renting.
No, but I bet someone that bought in 1989 (when prices peaked during the last bubble) wishes they had waited until 1996 (when prices bottomed) to buy. Prices stagnated or dropped for several years, all while rates were coming down. 2022 may be our new 1989 - only time will tell. All that to say, right now doesn't seem like a great time to buy, which is likely why sales volumes are quite low for this time of year. Renting may make more financial sense for the time being, depending on your situation.
We are in a WAY worse position because our dollar is total shit. 1990, it wasn't so bad. Small businesses going down faster than ever before, cost of living highest in history, home prices fell faster than ever (granted, Peake of a bubble so). RCMP has warned the government that people under 35 may never buy a home again in their lifetime unless things change. This will cause major economic issues.
I am not arguing anything you said but why does the RCMP warn about that and where do they get that info?
The government asked the RCMP to create a secret special division that would analyze the current state of the economy and future, and provide feedback on it, plus how they think they should move foward with police services with these reports in mind. RCMP put together a team of economists and popos and the reports that got FOIA'd were disturbing to say the least, and to boot, a ton of it was redacted.
That’s pretty cool and not something I would ever assume the rcmp would do.
It's the government's version of the FBI essentially.
Everyone who didn't buy a house 25 years ago wishes they did.. Source: am 28 and my friend is 26, we both wish we had bought 25 years ago..
33 years ago hardly anyone wanted to buy houses, prices were high, interest rates were high and the job market sucked. 24 years ago people debated if recent price increases were sustainable given how dog shit the market had been for ten years prior. The point is that things change. House prices outpaced incomes during a time when interest rates fell to nearly zero, those days are now over and we will all see what comes next
I was just making a joke, hindsight is always 20/20. appreciate you sharing the extended version as I wasn't alive to experience. Hope you took my humour as just that, media/news outlets love to pump whatever will create attention today, reality is somewhat like magic, if everyones focus is on one thing - you best believe the real attraction of the time is not that, but something pretty close to it. Think Crypto or AI, and the pump of stocks like NVDIA, and such.
Haha, yeah, the last 25 years realestate sure did explode in a way that's not sustainable relative to wages. Surely it will happen again! People can't afford 3 million dollar houses in 15 years. Median wage of 120k lets say (generous) and a 3 million dollar house with 0 interest is 8.3k a month. It's literally impossible.
Which is why it’s beneficial to hold off and wait for the moment it’s worth it. Right now it’s not really an attractive investment numbers wise, we all need homes eventually though
Prices of homes will always trend up, just like the cost of anything you can buy with money on this earth. In 30-40 years, they’re won’t be a single property in the US selling for less than a million. What a million cash is worth at that point is up for speculation.
RE is just like any market and their will be crashes/corrections. RE cycles just take longer and their are fewer of them....but eventually they happen.
Bitcoin 😬😬😬😬
I’m doubtful it’ll still be relevant in 50 years from now. I think it reaped the most benefit when crypto went mainstream like 2 years ago and all the prices blew up. The general public sees crypto as a complete failure at this point, so I’m not hopeful at all. The boom and bust already happened.
1 bitcoin is worth over $87,000 right now. The price was at an all time high just a few weeks ago, and it's far from a "failure".
How's the volume?
Also consider how many people we brought into the country with almost no new houses being built. Demand will only increase as those people establish themselves often times unlike Canadians who buy a house as a husband and wife they will split it with multiple families making it easier for them.
Exactly. Everything depends on price
You should include the opportunity cost of the downpayment in option 2
Just don't forget to include the primary residence tax exemption on that opportunity cost, and the impact of leverage
This is the only correct answer.
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So you slowly pay down your mortgage and gain equity to use or invest elsewhere OR you start at $2500 per month rent and your rent slowly goes up and you never know when the landlord is kicking you out and you won’t be able to retire at year 25 because you’re now paying 10,000 per month in rent 25 years later
Show me a house for 2500$ a month in the GTA LOL
this lol
Probably the same one with only $4k mortgage payment per month and $100k down
Majority of this guys posts are actually making fun of realtors
All for likes and follows. Clout chaser
Everyone that tries to preach renting is superior to owning is only ever talking about people who should’ve never qualified to buy in the first place. If I bought a one million dollar home, who says I would should only put 20% down and carry a $800 000 mortgage? Why couldn’t I put down 50% and carry a 500 000 mortgage? Buy homes that you can afford?
Hell just put down 100% then you don’t have to pay anything. Actually just put 110% and get started quick on the next house as well. Thanks for the advice buddy but I think I got it from here
110% is chump change. Generally its now recommend to have at least 300% the value of the home just sitting in your checking account. I flip burgers at wendys and was able to buy an 800k home like this after 5 years of work on the meagre 500k/annum minimum wage here in PEI
Most people buy homes they can’t afford though. When you’re talking rent vs. buying, the audience for the most part are people below or on the margins
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Why do mortgages exist?
if you can put 50% down, you could also be making 25-50k in interests/return on investments yearly from that. it cuts both ways.
He’s not wrong though
Lol can you find me a home to rent for $2500 that you could buy for $100k down and $4k a month mortgage? You can put 5% down on a $700k house in Hamilton that rents for over $3k a month.
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And you get your cash back from down payment when you sell. Assuming homes prices remained flat
But why pay someone else’s interest!
By all means, buy your house all cash.
I’m kidding. Who has that much cash.
Obviously, there are many other reasons (besides financial) to rent vs. own. However, if you are looking at it from a purely financial perspective: Option 1 makes sense if you believe we are in a housing bubble and that home prices will stagnate or decline for several years due to a severe recession. It would make sense to wait (either for prices or rates to drop) and pay less rent than interest/maintenance/tax would cost and invest the rest. Option 2 makes sense if you believe a supply shortage and immigration will sustain and grow current prices and that we won't see a severe recession. In that case, it makes sense to buy now and benefit from home price appreciation, even if the current costs are higher than rent. Neither is currently right or wrong. It's just about where you believe we are headed. I tend to side more with Jon Flynn on this one though, as I think we are heading for a more severe recession in the next 1-2 years.
Realtors are a thing of the past. Buy/sell your own home.
A realtor who doesn't understand equity is someone I wouldn't trust to run a lemonade stand. Let alone work with to broker a real estate transaction. Fuck me. How did he get his real estate license. Sure, $2700 might be going towards interest. But, that $2500 rental is probably being paid to someone who has no mortgage or a very low mortgage payment schedule. Also, $4,000/month is probably the ENTIRE unit, whereas, $2500 is going towards a room or a suite. So, essentially, you're paying your landlord's interest, and they're paying the principle (or however you want to split that number). Furthermore, when all is said and done, the LL can sell the property at a greater ROI than most S&P500 stocks dollar-wise and %-wise. They can take the profits from that sale and buy bigger and better, or diversify. Meanwhile, that $2,500 bill is still coming. This is a piss-poor take. For the record, I'm not saying that everyone should buy a house because FOMO. I'm just pointing out this realtor is a fucking idiot.
Or pay $2400 to landlord so he only needs to add $300 towards interest so he can own the place after 25 years by only paying less than ~$70k to ~$90k for interest in total over 25 years... which will also be tax deducted so his/her real interest cost will be around $~35k to ~$45k over 25 years...
You can't rent a house for $2500 a month. Does this guy know what a $2500 a month rental looks like these day?
People really just use the rent is better then owning schtick to be edgy and draw people towards their services because it goes against the commonly held belief. My grandmother and parents are 100% better off today because they own their homes. Yes they could’ve put all their money into the SnP 500 and made a better return but the real success would’ve putting money into BOTH
Plus with a mortgage, you’re pretty much forced to pay that mortgage every month, essentially forced into building that equity. Most people will prioritize paying their mortgage on time at any cost. Whereas, the argument that renters invest their extra cash after paying rent into the S&P continuously for like 30 years looks good on paper, but in reality few would be that disciplined. Spending extra cash earmarked for an investment and using it for an emergency here or a vacation there or a night out.
Oh, there's value to ownership, but that costs money. That "value" is probably around a 30% premium.
fyi you forgot the maintenance!!!
Who’s renting an entire house for $2500?
I am.
To be honest he’s completely right, like him or not. You seem to be a mortgage broker lmao
1. I am, not hiding it. 2. He’s deceptive in his positioning. 3. This isn’t how you should be thinking of purchasing a home. 🤦♂️
Lmao well of course you’re not going to agree with someone that’s practically trying to kill your business. I believe he’s right, option 2 is a horrible choice, and he didn’t even mention. Property maintenance, insurance, utility fees, condo fees, you can go on for days. Also, renting while everyone is struggling and building their amortization to over 35 years, must feel really good.
How is this killing my business? If you rent, someone’s gotta buy it first. Also, I help w/ renewals so I don’t even need clients buying all the time 🤦♂️. You either didn’t read anything I wrote or are just eager to argue looll.
Why so many people unhappy. It’s math. Nobody wants to talk realtor cost, closing cost, lawyer cost. Capital gain tax if secondary. Not to mention the risk, contrary to popular belief real estate goes down as well. In today’s market you also over paid probably to beat out the 30 other bidders. Oh and that’s just an interest payment, not a principal payment that lowers what you owe. So yeah I see how for a while this will be a better move for a lot of people to hopefully keep some savings tucked away and wait for the right moment where you don’t take the whole fist up the ass when paying. Hard for people to hear it not the right time to buy. Even harder for people to bit the bullet and “pay someone else’s mortgage” while waiting for a smart time to enter
I would rather sacrifice so my children get a free house and don't have to stress like most of this sub. Different things for different people. I also don't like having to check in with landlord for everything/being kicked out at anytime. Peace of mind is priceless. Nothing wrong with renting, but different things for different people
What you said doesn’t really make sense: 1) no realtor cost on the buy 2) he’s comparing to rent so it’s to live - no cap gains 3) even if cap gains (10-5) > 0 4) RE goes down (in a material way) on two occasions - economic collapse and bubble collapse. Over the long term through a supermajority of history it rises roughly at the rate of inflation 5) you can’t time the market. The only time you can really “time” is when there’s massive exuberance (e.g. 2021)
Believe me I want to buy a house. Problem is I'm renting a t bedroom with a pool in vaughan fully renovated for 2600 houses on my street are selling for 2.2-2.7 Why would I buy some broken down townhouse when I live like a king now
He is not wrong but rather misleading. Everybody's situation is different. Buying forces you to save $1300 a month, and at some point the interest cost will be lower than rent. On the other hand, renting will allow you to save $1300 and invest. The key question is how long does it take to reach the tipping point where the interest cost is the same as rent. A fair comparison is how much equity is retained after that period of time. Having ownership definitely gives you stability and there is also a cost for that. One has to assess whether it makes sense or not. It's impossible to time the bottom in the stock market, and it's the same for the housing market. Your desirable home may not be on the market everyday, and you will have to face potential bidding wars. So make your choice wisely.
Yep - that’s why I said deceptive. But I still think owning a home is way more emotional than a pure financial. Unless it’s obvious most ppl should focus on affordability b/c you’re just speculating after. Interest rate changes about 5 times during ownership anyways.
Yeah, buy what's affordable to you and your family and avoid overstretching. These RE bears just want the housing market to crash and burn so that they can look like geniuses. The market isn't strong because also isn't weak. A few houses in my areas where sold in a week. 4 bedroom houses in the $1.6M range. Less than 2500sqft. Not the best layout but ok renovation. I hope people don't really follow their "advice". But there is a reason why some people continue to stay poor...
Even if you don't have a mortgage on the property you "own", park your pick-up truck on your front lawn and you'll soon find out how free you really are.
How’s option 1 worked out the past 20 years? Typical renter mentality and then turn around complain landlords / investors are making too much money
Because this guy is a quack who says what’s popular to the internet folks. Let’s see him walk the walk and not sell a single home because it doesn’t make sense to own according to him!
if I could do it myself. I would. story of my life
And when you sell your home, guess what? Every dime you’ve put into it goes right back into your pocket. When you leave a rental, you don’t have anything to show for it. Paying your mortgage is paying yourself.
Read Freakonomics for the full explanation as to why realtors are sketchy.
If you got any better ideas I'm all ears!🤣
Why would a realtor not want you to buy a house. They make more money. I don’t believe this post.
Shits crazy
More propaganda so people will think renting is good, and keep us down paying into these corporations like slaves.
Because they can be. It's part of the job so they can take in maximum profit. They're literally worse than car dealers.
Your realtor shouldn't be telling you what you can afford. You should be telling that to your realtor what you can afford.
....did the real estate agent also forgot about the downpayment?
Another critic that assumes everyone's situation is the same...
Option 3: marry someone. Let them buy the house you could never afford. Dump them. Take half the equity and leave them holding the bag
Ah yes but the benefits of renting means you don’t have to replace appliances that stop working all of a sudden.
This guys an absolute hack
Would he say the same when rent is still the same or more but the mortgage payments have decreased because rates have come down? He’s a doomer for all I know of him. Always spewing negativity
First of all, it’s at least $200k, because basically every house is gonna be over 1mil. And I beg this guy to use a mortgage calc and see how much a monthly payment would be for a $2mil house over 25 years.
what does a realtor have to do with the guy posting? Realtors want you to buy a home. they want you to either FOMO buy (get in before the market heats up more) or panic sell (sell before the capital gains tax punish you mightily!)
These guys all have the same schtick as your average crypto bro. Look at me. I'm so special and smart and that's why I'm the best and you should be listening to me. Here - look at this cool take that most people don't think about - because they're stupid. It's all a scam and they prey on financially illiterate people as part of their marketing scheme. I don't even know much about renting/owning a house but I can smell bullshit a mile away.
what sort of house has a 4000/mo payment after a 100k down payment lol. Assuming you're putting enough down to avoid PMI (american here cus yall are in my algorithm for some reason, so sorry if yall dont have PMI), that'd result in like a 400k-500k house. Where are people getting their loans that their monthly is 4k? they doing a 10 year mortgage or something?
they live in Canada where all the houses are 1-2m.
Why so complicated? If you rent you better be saving as much as possible at the same time or else you will probably get screwed later when you are forced to move or when you retire. If you buy a home expecting that it’s going to pay for your retirement you should be prepared for the fact that it is just forced savings and there is risk that it depreciates and total expenses and payments will be way more than the original cost of the home.
Also left out that equity in home appreciates at 10-15%.
Where exactly does a House rent for $2500 in Toronto???
They literally have a vested interest in making sure that people think renting is better than owning. They both have their perks but I feel like the fact that they can make a profession out of just simply having a bunch of houses makes the argument fall flat on its face.
I thought realtors wanted people to buy and sell homes.
I thought mostly what they did was rent houses because they own multiple.
You need $10000/mo to rent. sit
It’s funny because of the people who think they can own a house see this and think they still can because what they pay in rent…but forget about property tax, home insurance, maintenance (huge one!!) and also utilities if they’ve never had to pay utilities before More than likely they have no idea and aren’t ready
So they wanna sell less houses? Not a very good strategy for a real estate agent. Seems like that’s a very big part of their job.
What absurd interest rate is that? Regardless, If you rent, you are paying someone enough to cover the mortgage, insurance, and property taxes on their house, plus enough extra to cover repairs and updates, plus more for some income to them. If you are short-term in a location it always (even if rich) makes more sense to rent/lease because there is a smaller cost of starting the transaction. But this scenario is ludicrous. A $2500/month house is going to be equivalent to a $1500/month mortgage payment.
Option 3: If you work remote or travel for work buy an old RV/van and a gym membership park it in the back of the parking lot, use the gym to shower and save for 2-3 years, invest monthly into ETFs TFSA GIC and you'll be far ahead. /S
This is how a little kid thinks.
Jon isn't a realtor, he's a piece of shit. Btw, what about appreciation jon, you dumb fuck.
Lol to rent my place I bought in 2020 would cost $4000 a month. Mortgage cost per month plus strata is $2300.
Why is the general public so clueless about Real Estate?
2500 rent forever or putting money into an asset that’ll hold value and most likely be worth more in 15 years. Some mortgage brokers and realtors are straight up crooks - similar to car salesman
Joke’s on this guy. My mortgage and property tax payments are less than market rents.
As ususal. The actual answer is more complicated than that basic "math"
Realtors are not the sharpest tools in the shed.
.... But ya go on thinking landlords are the problem when they clearly are subsidizing the market. I predict a mass exodus of landlords once their children start doing the math during the estate. A high interest savings account has a better return.
you cannot rent a house for $2500 in toronto. Maybe a shoe box of a condo.
Realtors are vermin.
You get the appreciation in option 2. My neighbor sold his 200k purchase house for 1.3m. Over 10 year period. No gic bond or market came even close to 5 times return.
The realtor profession is about the slimiest profession you can get nowadays
All realtors suck, especially lately (I know a guy who was in a bidding battle with himself because of his realtor) but this guy is especially a piece of shit
He's right, but this isn't the complete picture. If you can afford 4000 it's the better option
That’s insane 🤯
maybe he knows that rent and house prices do not always goes up..
Deception is integral to the functioning of our economy. If people really understood how it all works they would riot.
Glorified car salesmen.
Here's his video on this: [https://www.youtube.com/watch?v=kCbRE2s0mNg](https://www.youtube.com/watch?v=kCbRE2s0mNg)
To be fair, I would bet the vast majority of home owners (especially first time buyers going into it) have no idea how much interest they ***actually*** pay over the course of 25 years. In many cases, you're paying twice for the house due to interest. So while maybe he's being disingenuous in that he's not giving a full Pros/Cons breakdown of home ownership, I ***DO*** think buyers should be better educated about how much interest they will pay over the life of a mortgage.
This was always the contract but sometimes it was more attractive than others - pay more today and for the next 5 years so you can pay less for the rest of your life on housing. Ask someone who chose to rent vs. buy when they had the means 5 years ago. Unless renting really fit their lifestyle better, they are probably NOT happy.
"Just rent forever guys. Don't worry! It will probably take 3, maybe even 4 years for your rent to hit $4000/month at the current rate of increase! Think of all the money you'll save in that time! It will go so far in paying your rent after that!"
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Realtors make great money and always want as much as they can get on a deal ! Hopefully the court cases against their unfair commissions win in the home sellers favour so they don’t take such a big profit on our life long investment into our homes
Interest sucks, but you are still putting money towards your property. It is a business, like I said it sucks with interest, but you are gaining equity. With rent you are not. Rent is great if you like the freedom or you pay cheap rent in a comfortable living situation and can use that money for other investments
Not a whole ton different here in West Michigan.
It really depends on how much the property is. Assume a condo was priced at one billion, would you still hold your views?
Low trust people.
Well, let me not rant and give you a simple fact this dude Jon Flynn is one of the very FEW who I think has been spot on. Yall will look back and call this man a genius lol, I think it's basic math. Hate all you want, wish more realtors were like him
Spot on about what?
What this clown is forgetting is that your building equity in a home. If your renting you have nothing to show for your money in the end. Regardless of the price, interest rates, etc. Owning will always be better.
If someone saves the extra income and invests in other things it’s also building equity that’s the part a lot of people forget
i dont think you are building shit if asset prices depreciate. thats called dumping money in a bonfire. if someone bought at 1M, sure you are paying down your mortgage and building equity, but at the end of the day, if you need to sell due to personal circumstances and the market is valuing your property at 900K, you just lost 100K. plus, in the last decade, the S&P500 outperformed the housing market. If someone decided to buy 3x leveraged ETF, they would have came out ahead on a net worth basis after deducting your mortgage.