This brings awareness! Buying a house is not always better, this is a misconception that so many people have! Thanks for the video and for the GREAT TOOL!
I believe that buying is better than renting in the long run. Over time your mortgage payment will decrease however, your rent will increase. Most people who are renting won't invest the difference into the stock market.
I agree, most of the people don't invest in the stock market and so it is not worth it to rent. However, it is extremely important to buy a house that you are sure you can afford, because otherwise you risk to lose it and have a big debt! I personally rent because I invest a lot and for me it's financially better this way 🙂
Buying a house makes me feel secure about the future, if i die, or get injured that i cannot work, i know me and my family have a roof on our heads, plus I'm not interested in a mortgage i just want to buy the house at once, houses in my country start from 18k usd all the way to 10 mil usd, so an 80k house is usually in midium density areas and over 100k in low density areas. So ya its a no brainer buying is definately the move. At least in my country
I agree with you, especially because according to the country this can change a lot! Happy to know that you will be able to pay it directly without a mortgage, it will save you a lot of money over the time!
USA Inventory of single family homes is low...almost half of the pre-pandemic supply. So even with low demand, prices remain high due to low supply. Homes sell at slower rates with high interest rates, but low supply on the market so prices remain high.
The better analysis is to start with either renting or buying and then calculate the equivalent alternative. In other words, how much would your house have to cost to equalize renting at $3000/mo?
That's also an interesting analysis! The goal of developing this tool is also to give anyone the possibility to do this type of analysis, to understand what they can afford and what is the better financial choice!
@@NicoForaFinance Yeah, for sure doing the comparison the way you suggest is a great starting point. However, most people are starting out as renters or owners and are curious about the alternative. Being able to determine the amount of rent or the house price you would need to equalize your situation is a great way of seeing whether the alternative option might be a better choice. Another point is that many calculators fail to include the cost of selling the home. Real estate agent fees can be $30,000 or more in addition to the usual closing costs such as hiring a lawyer and doing a title search. These transaction costs add up quickly and definitely make the home ownership equation less attractive.
Yeah people need to work out their scenario, but also take the quality of life into consideration. For my scenario buying is better, and for cheaper than renting a one bed apartment for those 30 years I get a new 4 bed house that is 4 times the size. A 1 bed to rent here is €1800-€2500, my house repayment is €1400. You can also rent out a room tax free for €14000 per year (or the same as a €28k increase in salary). The buying costs are much lower here than those in the video. Around 1.5%-2%, property tax here is less than 0.1% also. Meanwhile the rents will also not stay static, they go up and the inflation eats away at your debt value for your mortgage. A problem here also is huge taxes on stocks (41% and every 8 years you have to pay the taxes even if you don't sell) and no tax on selling a house.
Thanks for sharing your scenario! It is super interesting to see these numbers and it clearly looks like buying is the better decision. As said in the video, it's extremely dependant on the country and the area you are buying.
I am a renter and I invest, as well as other friends of mine. Surely a lot of renters don't invest. But that's exactly why it is important to point out how important it is to invest. With this video I want to offer the best opportunities everyone has, and not the worst ones. Saying to someone that he blindly has to buy a house because it's better, without taking into comparison the other good opportunities he has, would mean being dishonest. Then, if someone doesn't want to invest even if he rents its fine. Everyone should be able to do whatever he wants with his own money.
@@NicoForaFinance My apologies, I didn't mean for that to come of so aggressively. Great video btw. I think I saw the part of the video where you were doing the math and while it makes sense, I think most people live paycheck to paycheck. I have quite a few friends who save but not 100% of the difference. Great video and continue doing the numbers.
My fault for misunderstanding. I agree with you, most of the people live paycheck to paycheck, and that's also why I started this channel. I would love to be able to make people understand that they could easily improve their life with better money management! Thanks for the comments!
@NicoForaFinance I also rent and invest and did my own calculations to come to the same conclusion you have. Another major benefit (in my opinion) is the liquidity of wealth: the renter can sell and use that money in under 3 days if they want, whereas, the home owner will take at least a month before they have access to it.
Absolutely. Renting gives you a freedom of space and usage of money that you could never have if you are buying a house! (Except you really have a lot of money, but that's another discussion 😅)
Renting houses isn't actually a such a good investment, but it's rather made to maintain the value of money over the time and have a steady income. And for sure there are houses that are cheap, but again it highly depends on where you are living! A house in New York will be much more expensive than a house in a village in Greece. Everyone's scenario is different. As an example, for me it is much better to rent than to buy because my apartment would cost more than 1M and I pay it just more than 2k per month.
This brings awareness! Buying a house is not always better, this is a misconception that so many people have! Thanks for the video and for the GREAT TOOL!
I'm happy you appreciated it! It was a big effort to develop the tool! Thanks!
I believe that buying is better than renting in the long run. Over time your mortgage payment will decrease however, your rent will increase. Most people who are renting won't invest the difference into the stock market.
I agree, most of the people don't invest in the stock market and so it is not worth it to rent. However, it is extremely important to buy a house that you are sure you can afford, because otherwise you risk to lose it and have a big debt!
I personally rent because I invest a lot and for me it's financially better this way 🙂
BINGO! Most of those same people won't retire because how can they if rent is still knocking at their door at age 70.
@NicoForaFinance I agree my friend
Great video Nicolo!! Buy a house next to ours!!
Thanks!! Not sure about that, I want to invest 😜
Buying a house makes me feel secure about the future, if i die, or get injured that i cannot work, i know me and my family have a roof on our heads, plus I'm not interested in a mortgage i just want to buy the house at once, houses in my country start from 18k usd all the way to 10 mil usd, so an 80k house is usually in midium density areas and over 100k in low density areas. So ya its a no brainer buying is definately the move. At least in my country
I agree with you, especially because according to the country this can change a lot! Happy to know that you will be able to pay it directly without a mortgage, it will save you a lot of money over the time!
USA Inventory of single family homes is low...almost half of the pre-pandemic supply. So even with low demand, prices remain high due to low supply. Homes sell at slower rates with high interest rates, but low supply on the market so prices remain high.
Yes, before seeing a decrease in price we'll have to wait some time!
A long time as low supply will continue for at least a decade and mortgage interest rates will continue above 6 percent in 2024 and perhaps beyond.
The better analysis is to start with either renting or buying and then calculate the equivalent alternative. In other words, how much would your house have to cost to equalize renting at $3000/mo?
That's also an interesting analysis! The goal of developing this tool is also to give anyone the possibility to do this type of analysis, to understand what they can afford and what is the better financial choice!
@@NicoForaFinance Yeah, for sure doing the comparison the way you suggest is a great starting point. However, most people are starting out as renters or owners and are curious about the alternative. Being able to determine the amount of rent or the house price you would need to equalize your situation is a great way of seeing whether the alternative option might be a better choice. Another point is that many calculators fail to include the cost of selling the home. Real estate agent fees can be $30,000 or more in addition to the usual closing costs such as hiring a lawyer and doing a title search. These transaction costs add up quickly and definitely make the home ownership equation less attractive.
Totally agree with you 👍👍
Yeah people need to work out their scenario, but also take the quality of life into consideration. For my scenario buying is better, and for cheaper than renting a one bed apartment for those 30 years I get a new 4 bed house that is 4 times the size. A 1 bed to rent here is €1800-€2500, my house repayment is €1400. You can also rent out a room tax free for €14000 per year (or the same as a €28k increase in salary).
The buying costs are much lower here than those in the video. Around 1.5%-2%, property tax here is less than 0.1% also. Meanwhile the rents will also not stay static, they go up and the inflation eats away at your debt value for your mortgage. A problem here also is huge taxes on stocks (41% and every 8 years you have to pay the taxes even if you don't sell) and no tax on selling a house.
Thanks for sharing your scenario! It is super interesting to see these numbers and it clearly looks like buying is the better decision. As said in the video, it's extremely dependant on the country and the area you are buying.
Assuming the renter will save is laughable at best
I am a renter and I invest, as well as other friends of mine. Surely a lot of renters don't invest. But that's exactly why it is important to point out how important it is to invest.
With this video I want to offer the best opportunities everyone has, and not the worst ones. Saying to someone that he blindly has to buy a house because it's better, without taking into comparison the other good opportunities he has, would mean being dishonest.
Then, if someone doesn't want to invest even if he rents its fine. Everyone should be able to do whatever he wants with his own money.
@@NicoForaFinance My apologies, I didn't mean for that to come of so aggressively. Great video btw. I think I saw the part of the video where you were doing the math and while it makes sense, I think most people live paycheck to paycheck. I have quite a few friends who save but not 100% of the difference. Great video and continue doing the numbers.
My fault for misunderstanding.
I agree with you, most of the people live paycheck to paycheck, and that's also why I started this channel. I would love to be able to make people understand that they could easily improve their life with better money management!
Thanks for the comments!
@NicoForaFinance I also rent and invest and did my own calculations to come to the same conclusion you have. Another major benefit (in my opinion) is the liquidity of wealth: the renter can sell and use that money in under 3 days if they want, whereas, the home owner will take at least a month before they have access to it.
Absolutely. Renting gives you a freedom of space and usage of money that you could never have if you are buying a house! (Except you really have a lot of money, but that's another discussion 😅)
If it was cheaper to rent then there wouldn't be any owners of houses to rent. There are homes out there for under 100k.
Renting houses isn't actually a such a good investment, but it's rather made to maintain the value of money over the time and have a steady income.
And for sure there are houses that are cheap, but again it highly depends on where you are living!
A house in New York will be much more expensive than a house in a village in Greece. Everyone's scenario is different.
As an example, for me it is much better to rent than to buy because my apartment would cost more than 1M and I pay it just more than 2k per month.