Why Many Millionaires Do NOT Buy Homes
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- Опубликовано: 8 фев 2025
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*278 {Hammad}[Sid] Why Many Millionaires Do NOT Buy Homes
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I’m in Ohio and the housing market here over the last 7-8 years is unlike anything I’ve ever seen. Homes that were bought for $130K in 2015 are now being sold for $590k. I’m talking about tiny, disgusting, poorly built 950 square foot shit boxes in quiet mediocre neighbourhoods. Then you’ve got Better, average sized homes in nicer neighbourhoods that were $300K+ 10 years ago selling for $750k+ now. Wild times.
Home prices will come down eventually, but for now; get your money (as much as you can) out of the housing market and get into the financial markets or gold. The new mortgage rates are crazy, add to that the recession and the fact that mortgage guidelines are getting more difficult.
Home prices will need to fall by a minimum of 40% (more like 50%) before the market normalizes.If you are in cross roads or need sincere advise on the best moves to take now its best you seek an independent advisor who knows about the financial markets.
@@SeanTalkoff This sounds great. Is there a way I could connect with an advisor you recommend? I would really appreciate it
My CFA ’’ Sharon Ann Meny, a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market..
She appears to be well-educated and well-read. I ran a Google search for her name and came across her website; thank you for sharing.
This is a synopsis of the rent vs. buy dilemma that I have spent years trying to resolve. I've never understood the rental revenue vs. mortgage payment equation. However, this is lot more sensible and rational. I appreciate you making this simple!
Because they are used to bull markets, most people can't manage a decline, but you may make a good profit if you know where to look and how to navigate. Your entry and departure strategy will determine this.
Absolutely, having a solid plan is crucial. My portfolio has doubled since early last year. My financial advisor and I are working towards a seven-figure goal, though it might take until 2025
@@j.ottinger I could really use the expertise of an advisor like that.
Her name is “Annette Marie Holt”. You can research her name to find the necessary details and set up an appointment.
Thanks for sharing. I searched for her name and found her website. I reviewed her credentials and did my research before contacting her. Thanks again.
I’m 58 and have never owned a home. I live in a super expensive area and my rent has always been lower than the taxes on my friend’s homes, so it was a no brainer. I will buy a very small, well situated condo in about a year, but purely because i plan to do a lot of travel and want a home base that i can lock and leave. I’ll pay cash because while my friends were paying mortagages and maintenance on their expensive homes, I invested surplus in the market. Far better investment over the same period of time. Home ownership is a lifestyle choice, it’s not a great investment in my opinion .
There is no way rent is cheaper than taxes on a comparable property. Unless it is rent controlled & even then it is not likely or long term
@ I didn’t say comparable property, i said living in the same town,and in the same neighborhood. I’ve lived for 19 years in a beautiful 2 bedroom apartment in a very well maintained Victorian house, owned by an architect who uses the cottage behind the house as his office. Point being, he isn’t someone trying to be a landlord (i.e., it isn’t how he makes his money). It is also extremely tastefully maintained and he has an army of tradesmen who fix anything that breaks, basically immediately. My rent is significantly less than the property taxes on homes of my friends who live in small houses in the same town. And obviously taxes are only a small part of their outlay. they have mortgages, mortgage interest, maintenance. So they are in houses, I’m in an apartment. I have no interest in owning a home because of the associated taxes and maintenance cost and work, which is why when i do buy, I’ll buy a condo. I know a lot of people who do what i did. Home ownership is a lifestyle choice, it’s not a great investment when compared to the alternative. I’ve made far, far more in the market than i would have buying a home over the same period. Resulting in me having multiples more in wealth.
My $3500 a month rent, compared to a $1.2M apartment 2 blocks over, makes more financial sense. Plus no $1500 a month HOA and taxes. Both places are very similar. Surplus capital invested correctly far outpaces real estate returns.
@@Mary-tj5qx I agree with the points you are making. I’m doing something similar and would fully recommend it to anyone capable of seeing beyond the home ownership
propaganda of the RE lobby. I only dumb foundedly stumbled into it but having even modest success in equity investing will make a believer out of anybody. My worries are about taxes on capital gains that I decided to take, not property taxes that some assesor decided I should pay.
Yep. Renting is about 1/2 of ownership in so cal.
Mortgage rates are currently at an all time high since 2000(24 years) and based on statistics on inflation, we might see that number skyrocket further, a 30-year fixed rate was only 5% this time last year, so do I just keep waiting for a housing crash before buying or redirect my focus to the equity market
The stock market is no different, to maintain profit you need to have some in-depth knowledge on the market. I mostly just buy and hold stocks, but my portfolio has been mostly in the red for quite awhile now. Unfortunately to be able to make good gains, you’ll need to be consistent and restructure your portfolio frequently.
In my opinion, it was much easier investing back in the 80s but it’s a lot trickier now, those making consistent profit in these times are professionals reason I’ve been using an advisor for the past 5 years to consistently build my portfolio in preparations for retirement.
@@PatrickLloyd- My partner’s been considering going the same route, could you share more info please on the advisor that guides you
I've stuck with SOPHIE LYNN CARRABUS before the pandemic, and her performance has been consistently impressive. She’s quite known in her field with over two decades of experience, simply look her up.
Thanks a lot for this suggestion. I needed this myself, I looked her up, and I have sent her an email. I hope she gets back to me soon.
I'm glad you said some millionaires don't own homes, because the vast majority do.
They just don't buy at the top of the market, like so many people do.
That’s not true either. If they like the house and it’s the home they intend to stay in for 20 plus years then they’re not buying at the top they’re buying what they want.
Wrong.
A family home is a liability. A rental property is an asset. Multimillonaire here. I do not own a family home, only rental property.
Do you have a family appart of dog and cat? If not, I agree you do not need FAMILY home.
People have pets in apartments too
I agree. A house is only an asset if it produces an income and increases in value, like a rental property. The family home is not an asset, it’s a liability.
Lol. Lies
So you don’t value comfort and have no desire to settle down into a community. You do you. Oh and I’m a multimillionaire too but I don’t shout about it as a means to get people to respect my viewpoint.
Owning a home is definitely more expensive than renting. The only reason to own versus rent is emotional (ie I feel better owning my own home - makes me happier). One nice middle ground is to own a smaller home that has lower maintenance/upkeep/property tax costs. Many people own homes that are too large and expensive to maintain. Every square footage you add to a home has to be maintained and updated over time. I currently live in a 3000 square foot home but often wonder why don't we downsize into an 1800 square foot home or even 1500 square feet.
Whether something is an asset or liability depends on which way the money goes. Asset: money is coming in... Liability: money is going out... A home is a liability for most because money is going out, interest expense, insurance, maintenance, taxes, "Cost of Ownership" will exceed cost of the home over time and outweigh gains in property value. A home could be an asset if it is a rental property and income exceeds expenses.
My house has gained $700k+ in equity since 2017. We only put down $100k that we pulled from investments. Our monthly payments and maintenance is small in comparison, and rates have been low. We started with a 30year mortgage and are now down to 15 years. Buying this place to live in was the best financial decision we've made to date. I also own two cash-flowing rental properties; buying those pale in comparison to buying the house we live in.. in terms of building our net worth. Many people have done quite well buying properties to live in...
There are many ways to build wealth. 90% of millionaires have done so through real estate.
You forgot this….buying ties up too much capital that could be put to better use in other investments, than tied up in an illiquid asset.
So, what is the reason you invest in all these better performing assets? Is it to create wealth for your kids and never use it yourself? First of all Family house is one of the most important STUFF in man's life. The reason why we invest is to be able to by desirable STUFF some years later (investment for the sake of investment makes no sense), otherwise we die very reach.
A house is a terrible investment
A fha loan is only 3.5%
@@serhiybakhshyyan10 Most buy homes to live in. Not as an investment. Putting all your money in a home that doesn't produce cash flow is the one aspect many over look with home ownership. Which leads me to believe home ownership is an emotional decision more than an investment decision.
@@serhiybakhshyyan10 why is a house the "most important stuff"? I grew up in NYC in an apartment, and had a great childhood with awesome memories. The idea that only owning a house makes you a good provider for your family, or can provide a stable environment for your kids, comes from decades of the marketing of "the American Dream"
I’m a multi millionaire and own a house free and clear. It lowers monthly expenses and is like a bond component of a portfolio.
Don’t know why I watch videos about what millionaires do, whatever I do is what millionaires do
lol. True. But a sample of one isn’t scientifically relevant.
@ being a multimillionaire only means having a net worth of $2 million or more, it’s no longer any big deal. I actually feel poor because most of my friends probably have closer to 5-10 million thru highly compensated employment or small business ownership.
Same. There is no way we would ever rent. We own our house free and clear.
@karenjensen2345 you don't own your home. You're nothing more than a renter. Stop paying the taxes and the government will tell you who the real owner is
@@choco.es.unlimited I’ve said that before also. It’s still a good hedge against inflation.
Whatever floats your boat. I had it all, downsized and bought a moble home in the country. Very little maintenance. Everythings close, gym, track@field, trails, shopping, but more importantly peace and quiet.
Niiiice!
ahh my favorite lifestyle
Sweet, brother. With the mobile home, do you drive around the country as well?
@EriPages yes, mostly on motorcycles. It's beautiful and peaceful.
@@stevenwistort9903 Nice, brother.
If you are an average Joe make sure you retire owning a home. A rich person can buy one
whenever they want.
Damn! What about owning a motorhome is more affordble?
Doesn't hold value like a normal home will. Harder to get money out of it later as well.
@@mikerenes What if you not buying it as a investment? A home is not a investment.
That's just generally why. You can use it to pull money out of to purchase other properties without causing a tax event. You can live in it for a period of time, move out, and rent it out. It becomes an investment at that point but arguably it comes down to what your living cost options are. Real estate offers options. Mobile homes can be a good option depending on the person and situation. Depends what the bills would be otherwise. It is generally true that a mobile home will not appreciate let alone keep up or exceed inflation.
Damn! folks being ripped off too.But i meant a motorhome not mobile home.
having a house and privacy is priceless. Renting a house is so expensive vs paying a mortgage. Renting an apartment is less hassle and could be less money in the long run but hearing your neighbor pooping , couples fighting , or loud t.v's late at night isn't worth it.
some apartment are quiet
Well, even if you own a house, you can hear, couples fighting. I’m in a suburban neighborhood and then there’s lots of argument.
People can live in a house and have loud parties at night, so I’m not sure that’s some valid argument.
But I do think if you really want to have a house instead and really own it that is your choice and even if all the reasons think the opposite
I myself would rather not have the yard to take care of, the worry of the roof to fix, the air, conditioner, etc., and be able to travel longer
This advice about not owning a home is always ridiculous. Having a PAID FOR house should be part of everyone's retirement plan. Rent never gets paid off, and almost always increases. So no, renting an apartment is definitely not less money in the long run.
Its not priceless….there is a price attached to it
I live in an apartment, it's not perfect but nothing like those shit you had mentioned
I am 58 years old with a net worth of $2 million and 100% in equities. I own no real estate and do not plan to purchase. Be like Azul says and rent. My return on investment in the market these past seven years has been better than any real estate cook done.
You may want to consider diversifying. We may be heeding towards a period of significant market volatility.
I own real estate and my return is over 30-35% if you consider the price I paid. Even in today’s value it’s 12-15% ROI.
Stock market is going up and down like in 2022 but rents are going up as well as the price of real estate.
My housing expenses, including utilities, is $600/month. If I’d pay rent or mortgage - it would be tripled.
You don’t have to diversify with rentals but your primary residence is the gold mine: if you live there 2 years out of 5, your profit from sale will be tax free up to $250K/$500K if married.
When you rent, all that growth goes to your landlord.
I hope you’re taking into account property taxes, insurance and maintenance. Plus, the last two years the stock market is up about 45% and that’s without any of the expenses or hastle of owning real estate. Not to mention that you can sell all your stocks in minutes but you can’t dump your real estate very quickly.
@@irinab7524 totally agree.
This is the summary of the rent vs buy decision I’ve been trying to figure out for years. The rental income vs mortgage payment calculation never made sense to me. But this is much more logical and makes far more sense. Thank you for simplifying this!
Most people are unable to handle a fall since they are accustomed to bull markets, but if you know where to look and how to get around, you can profit handsomely. It depends on your entry and exit strategy.
Absolutely, having a solid plan is crucial. My portfolio has doubled since early last year. My financial advisor and I are working towards a seven-figure goal, though it might take until 2025
I could really use the expertise of an advisor like that.
Her name is “Stacy Lynn Staples Stacy Lynn Staples”. You can research her name to find the necessary details and set up an appointment.
Thanks for sharing. I searched for her name and found her website. I reviewed her credentials and did my research before contacting her. Thanks again.
Point 3 is a huge advantage for buying to me. I don't have to face moving again! Being "rooted down" is not a bad thing to me.
Your reason is someone's reason for not wanting to own a home. They like the flexibility of being able to move whenever they want.
Although we own now, we plan to sell our house and then rent when we're fully retired in 7 years. For us in our area, we realize the house will most likely not appreciate significantly in our later years. Totally agree that we don't want the commitment. Also, it will be easier for our heirs when we're longer here if we rent. I've sold one inherited house and will most likely have to sell two more in the coming years. It's a lot of work to clean out a house getting it ready to put on the market. I don't want our heirs to have to do all of this.
Very selfless of you. Light years beyond what most people would consider doing for their heirs.
Great strategy.
I know a retired attorney who had famous people as clients. I asked him why he doesn't have a big mansion instead of the modest one bedroom apartment he's renting. His answer was, "I want to enjoy life."
They are crazy! Owning your own is the best first thing you can do to prepare for bad times. Maybe it is not wise to do it in some countries but in south america it is very important to have a house.
not surprised, Azul. the expenses of home ownership have been spiraling upwards, especially insurance and property taxes.
Property taxes, insurance, and even maintenance, will never be as expensive as rent prices for a comparable property.
I'll give you a hint. It starts with a b and ends with an oomers. For example, I have a young family. I'm trying to buy a standard three-bedroom two-bath ranch. While I was there looking at the house, a boomer investor couple came in and started talking about all the plans they had for renovations to make it worthy to be a part of their rental portfolio. I'm just trying to put a roof over my daughter's head.
Allowing 100 million imigrants into the country is what boomers are guilty of. The housing costs is just on byproduct of all their massive failures.
I don’t think those are boomers.
@Theresonlyonetruth1 and you would know how?
@@DMAN590 how do you define “boomer”? Did you ask them for their ID’s? Don’t you think it’s possible maybe they weren’t “boomers”?
@@Theresonlyonetruth1triggered lol
I sold my two Airbnb's in mid 2023 and put half of it in Bitcoin. Best decision I've ever made.
I strongly disagreed with the premise of this video from the beginning until the map that showed I am in one of exception cities. Actually, a suburb with a lower cost of living. My mortgage will be paid off in 2 years and after that living rent free, even with taxes, insurance and other home ownership costs will be a small fraction of rent.
Onwnership provides security renting does not provide. What if the landlord gives you notice to vacate? They may sell the property to someone who wants to live there. Sometimes life is not just about money.
Well said
that's the biggest risk ... the owner does a 'rug pull' and you're out ... and tasked with pulling stakes to find another place to live. No thanks.
What if eminent domain happens to your home?
I’m about 88% of the way to multi-millionaire status and one the lessons I’ve learned is how useless net worth is as a measure of how well off a person is financially. You end up with a pot of money that you can’t spend without be taxed to kingdom come and another pot of money (equity) trapped in a house. You are just the dog that caught the car.
I really like your comment, most people don’t get this because they think the bigger number is more important than liquidity. I don’t use 401k’s for this reason, don’t care about its benefits.
Perhaps the following isn’t available in the USA but in the UK there are insurance wrappers which allow your investments to grow tax free and you to draw down on your original capital tax free (max 5% p.a. but that’s not a big issue if you consider safe withdrawal rates and the fact that unused allowances can be used in later years). Once all the original capital has been withdrawn, you do indeed pay tax on further withdrawals but then you switch to loans secured on the value of the underlying portfolio to finance your lifestyle, again tax free. As long as your portfolio return matches or exceeds your loan rate, you will still accrete value in your portfolio (still tax free) and will never run up against a LTV covenant. Not being liable to tax means you can withdraw less from your portfolio to maintain your lifestyle and these undrawn monies compound. Maybe I’m the dog who carried on running around the field chasing rabbits and otherwise still enjoying myself.
Thank you saying don’t save after sixty. It put me at ease. I have worth over 5 million other than my house and other belongings. I retired at age 62 and your video put me at ease that I made a right choice
If you live in a house and it doesn’t provide a revenue stream, then its NOT an investment, but rather a lifestyle choice.
"If" it appreciates more than it costs you then it most certainly is an investment.
@ I’ll clarify that a house lived in, while an investment per your definition, is not a good investment. Once taxes, insurance, interest on a mortgage, opportunity cost of tying up the money difference in the house over rent, and M&R are factored in MOST houses have just stayed pace with inflation. If a person avoided these expenses in lieu of rent and invested the difference in the market most would realize a larger return. In essence the point of Azul’s video.
@@LifeOfBryzzz not really. even if your house is now worth more than you paid for it you have to subtract how much you paid to upgrade things inside the house, put on a new roof, pay for a new air conditioning, pay the property tax, the price for keeping the lawn looking good the fertilizer, etc. we’re paying someone to do that.
It’s both for me.
Bought a house in 1993 for $205k, raised my 3 sons there. 30 plus years later, that house is valued at $1.2M now. Got lucky! It’s both a home and a good investment in the end.
@@EBMB21I’ve bought my house for $22K in 2013, invested another $35K and I live there mortgage free. If I’d rented it - it’s around $1600-1700/months now and I’m paying $300/months in property tax and $50/months insurance. Utilities are another $150-200/months but tenants pay all these, too.
If I’d sell it today - it’s $180K and no capital gain taxes, too.
It’s definitely an investment- I have to live somewhere anyway
3 years ago i had little to no hope to buy a home in Arizona so instead i began investing I am now getting dividends to pay my bills and i have no intention of buying I will continue to invest instead
Same plan here
Property is very expensive now and comes with alot of commitment. It is a physical thing tied to a specific place and you have to maintain it.
Renting increases freedom. Crime in area, bad neighbor, new friend across town, bored of the town, pay the fee to close your lease and your free
I suppose it would take millionaire to think of a house primary as an investment, as opposed to a secure place to live first and foremost.
I made a point to pay off our house as soon as possible, not only to free up $$$, but also to make sure we have a house to live in.
that's no longer feasible for most people at current Housing prices, too high
@TravelTechie415, 1300 sq.ft., bought in 1992 for $67K, so yes, a somewhat unusual case. Even then, I had to overpay the mortgage diligently every month.
@ I bought it in the 1990s for $67K, and still live there, so, yeah, perhaps a bit of a special case.
@@TravelTechie415 You can still pay your house off eventually. Rent never goes away.
The problem with renting is that unless you’re in a rent controlled building, your rent can go up every year much more than the cost of living.
When you buy a house, the mortgage is the minimum you pay.
Taxes could go up or down depending on On-home value. On the other hand, maintenance is a burden that you will always have, and for some reason, many people ways forget to consider it.
Buying a home could be a good investment if you buy at the right time. You make money when you buy, not when you sell. If you buy at ATH and the market goes downhill, you will be underwater for possibly many many years. Back in 2008, many house markets collapsed and it took over 10 years for homes to go back up in price. Imagine if you are forced to sell during this period, catastrophic.
Always look at buying a house from the investor's perspective.
@@WarGamersChannelmaintenance on a home is not that ,cub, stop blowing it out of proportion, you don’t buy a new boiler or get a new kitchen every year 😂😂😂😂
Wrong
Without doing the research, I suspect there will be a long term equilibrium between the cost of real estate ownership and rent. If it is cheaper to rent, many landlords will sell, reducing inventory, and therefore, increasing rent and reducing property values.
The imbalance will likely result in exposure to risk that I would not be comfortable facing in retirement, especially late in retirement.
I agree that buying in an overpriced market is not a wise financial decision but taking on the risk of future rent increases or being forced to find a new home on a timetable dictated by a landlord is also not a wise decision for many retirees.
I understand why a typical millionaire might rent versus own when they are willing to take the risk. I said in 2007, if I were single, I would have sold my home and made other arrangements for a few years. At that time, I said a housing bubble is where the average buyer cannot afford the average home. I think the same is true today. With the family in 2007 and as a retiree in 2025, it is not worth the risk to give up the security of homeownership.
Remember guys, you are not a millionaire. Buy a home if you can!
So I hear back in Norway owning an 1-bedroom apartment costs about 700 USD a month.
Here in Georgia I'm paying 700 USD to RENT a 2-bedroom.
As someone building his wealth, I'm glad I don't own a house. I can't believe what they're paying back there. And from what you're all writing, it seems like the USA is exactly the same.
4:50 I learned this and economics just like a gentleman here also said that the house is like a bond. The best rates that you’ll get or appreciation on average is 5%. This has been the historical average. Now this is the average each different market has higher or lower average appreciation, but on average, you would get 5% subtracting inflation. A house only keeps up with inflation unless you are an owner of property and you’re in the real estate business, which is a little bit more complicated given the tax code in this country. I generally just say if you’re gonna live somewhere a house is not an investment but somewhere you livealso depending on very various markets renting can cost more in the long run, but is cheaper in the short run as once you factor out total ownership after paying for a mortgage, the cost of owning is significantly lower than renting at that point.
One word. Liquidity.
I'm a millionaire and I don't own a house. Makes no financial sense for me to buy a house, especially at my age. I rent a modest duplex, my rent is cheaper than the average mortgage, never mind all the other costs that come with owning a house. I also don't want to take care of a yard. Also, most of my wealth is in an IRA, if I paid cash for a house the taxes and penalties from the IRA distribution would kill my balance and I'd just end up cash poor with little income off my IRA.
But you are not typical in your thinking, which is partly why you are a millionaire. You're happy with a modest duplex. If gardening and lawn care was a passion, I'm sure you would be happy in a modest home too.
I guess a barely millionaire would not want to own a house. To be consider wealthy, you will need close to 4 million and to qualify in the 1%, you will need close to 20 million. At that level, the issue becomes a moot point. That's why billionaires own so many properties across the world. This type of question is only for those aspiring millionaires.
I wonder what the percentage of Millionaires own vs do not home. I personally think real estate ownership is better for us financially, emotionally, and for our health, not to mention our over all quality of life. Renters as a whole seem to have less invested in their community, vs. homeowners that care about the neighborhoods the live in and do so for the long term. Short term mindset vs long term investment in the community. There is also long term stability for the family dynamic even for someone worth 7-8 figures. Why a few might rent due to being financially independent It maybe likely that far more own, and will own generational.
I appreciate you Azul giving us all the advice and no cost and working hard for us.
I'm hoping there will be a housing crisis so I can buy cheaply when I sell a few houses in 2026. As a backup plan, I've been thinking about purchasing stocks. What advice do you have for choosing the best buying time? On the one hand, I continue to read and see trading earnings of over $500k each week. On the other side, I keep hearing that the market is out of control and experiencing a dead cat bounce. Why does this happen?
Investing in real estate and stocks might be a wise choice, particularly if you have a sound trading plan that can get you through profitable days.
You're not doing anything wrong; you simply lack the expertise necessary to make money in a bad market. In these difficult circumstances, only really skilled experts who were forced to witness the 2008 financial crisis could expect to generate a large wage.
Recently, I've been considering the possibility of speaking with consultants. I need guidance because I'm an adult, but I'm not sure if their services would be all that helpful.
Finding financial advisors like Lisa Grace Myer who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
I located her through google, sent her an email, and scheduled a call; hopefully, she will reply because I want to start the new year off financially strong.
Im not a millionair but my home is paid for i rebuilt it myself and live like a king,,and love it bigtime!!!!,i do 90 percent of repairs,,,very low over head and with anchor tax break even better
Its all preferences. The reason why I dont own a home is because I became financially stable as i gotten older. I enjoy investing.
Rents go up every year. Monthly mortgage payments stay the same.
Buying makes way more sense than renting! No matter what "experts" want you to think! It costs to own a house. That's a given. However, you can always cash out when you sell it. It more than makes up for any opportunity losses!
I'm not a millionaire and happy I bought a home 17 years ago when rates were low and property cost 1/2 what it does now. My house is now much less expensive than renting a smaller less desirable home or even a townhouse/condo. It's nice to build equity and not have to worry about the rent going up. With that said I see the luxury of renting but I cannot afford to do that now.
Inflation will cause rents to rise over time. Eventually you’ll have a set mortgage where rents will surpass that mortgage. I like to think at the least when you buy a home you’re buying a set monthly mortgage.
Hey i'm Herebebarr's brother! Just wanted to drop a line that I enjoy your content. Keep it up.
1:37 Just to clarify, “…the median sale price for a single-family home in the US was 5.6 times higher than the median ANNUAL household income…”
How much will
Rent be in 20 years??
20 years ago I paid $500 a
Month for rent
One bedroom Apartments are going for $1500-$2000 a
Month here in Houston
To each his own
Anyone who thinks there own house is an investment doesn't know what an investment is an investment must do two things put money in your pocket and increase in value your own house only does one of those
owning a home forces you to save money aka mortgage payment. you can rent for cheaper but if you don't invest the difference, you are screwed. Lanlords can't force you out of a house (like selling a property, personal use, renoviction etc... ) you always have a roof above your head.
Good vid thx.
If lifestyle choice is more about pure investment it may make sense to rent-
1. Value----From 3 to 6 income to home buying cost ratio since mid 2000's. Can it go higher? Unlikely.
2. Rent is cheaper(Boston etc.) in many cities
3. Maintenance commitments, lock in vs. free to roam
Azul, Even if it costs more to buy wouldn't that be better because over time you are creating equity vs wasted on rent?
Exactly, I think people are missing the point. Millionaires can afford to rent because they
Probably hold real estate in a different portfolio. Regular people should buy because it’s a great way to build wealth.
I am a millionaire and I have been renting all my life. I rent a 1 bedroom apt for 2k a month in a secure building. For me renting is much less stress and I don't really have to worry as much when I go out of town. I still max out my 401k every year and contribute 2k a month to my investments. I usually move every 3-5 years into a brand new apartment.
Owning a home in a nice neighbourhood with many services, fabulous neighbours and no crime is a luxury. Others may choose to spend their millions on Rolex and fancy cars but that doesn’t compare to the lifestyle bump of owning a fabulous home.
1:30 5.6x price:income is too much
3:30 Cheaper to rent then own
6:00 Cheaper to own cities
I have $350,000 value in my house, $200,000 in investments, so about $550,000 total. Once I get up to around $750,000 total, I plan to sell the house, invest it all, work 2-3 days a week for fun, and rent.
A house that was purchased for $400,000 in 2019 is now worth about $800,000 where I live. New jersey. That's not a good investment?
You do understand there are extenuating circumstances that cause that namely the money printing from the pandemic, right?
Great advice and video. Just a tip for the recommended videos at the end give it a few more seconds because I struggled to find out why retirement at 65 is a big mistake 😅❤
HI Azul, I too could buy a home but don't feel that it is a good investment right now. We live in California and got a great apartment with rent control. For me, I like my apartment. I watch your videos. Got a pension, planning to retire at 60.
If you are young and keep jumping jobs it doesn't make se sense to buy. Better invest in 40qk, index funds, stocks as much as you can. Once you decide to settle only then buy a house (small one first). All my life lessons.
I personally like my private space without sharing walls
Touché
Many renters rent free standing single family homes. You don't have to share walls because you rent
I'd love to see some data regarding millionaires (Excluding the House Rich) and what percentage of them own residential property. My guess its in the 90% range. Don't listen to what people say, watch what they do. Homes may not be great investments, but they have historically been proven to be amazing hedges against rent prices. Nowhere in the US can you rent for less than buying when you uses comparable properties, vs just comparing median rent prices vs median home prices. The median priced rental does not offer the same space or utility of the median priced home. Apples to Oranges.
I will start by saying we have been buying homes since 1994 to include investment properties in which we do not own any at this time. We bought our current home in 2022 in a fast-growing community. I will say this, "if you are going to buy, try buying in the area of growth." While I think owning a house has been a joy for me and my family, owning a home is certainly a cash cow. We made money in certain circumstances, but we lost money in others. We are now in our early and mid-sixties and have begun considering ending the buying of personal properties. We are considering investing in real estate once again. I personally don't believe the current generations and beyond will be able to afford buying a home. It's obvious others in higher positions believe the same as they are building apartment buildings hand over fist. Buying a home is personal. To each its own! Just have some money and don't buy at the top of your affordability. Lastly, pay off all other debts which will ease the blow of homeownership.
Great video/post!
I am a multi millionaire, and i own 4 houses. I rent out 3 of them and live in the other one. I can fix anything that goes wrong with the houses. I get really good deals on repairs because of my connections. I am a developer/contractor. I live in an area that it is much cheaper to own than to rent because of massive real estate appreciation.
There's no good reason to not buy a home. Especially when you can velocity bank your mortgage and have it paid off within 5-7 years and never have to worry about a house payment again in your life.
Crime in Memphis, TN is out of control that's why it is so cheap there. Leaving Memphis was the best thing I could have done.
I live in the SF Bay Area, and I wish I could buy a home, but it’s a pipe dream here. I would love to retire somewhere that I could buy and not worry about being forced to move due to landlord issues. Hard to do especially as one is in advanced age.
If a bank can take it from you, it ain't yours. Just saying.
I am multi millionaire, I rent a bedroom in Boston, my rent is 750 a month including utilities. My land lord who owns the house live in basement
Are you happy doing this? I would think you would want to buy a place so you can have friends and family over.
I think the Data at 1 Minute is really really important and people don't get that. Measuring Price in Peoples Median Salary does give a looot of information.
It shows the true inflation and also that people can afford less gold for example, than many many years ago.
People get poorer or get paid less, but they don't understand this.
Great article!👍
Price of houses aren’t going up, the value of the dollar is going down. Once you look at it that way, it changes your approach to saving and investment.
That 5.6x median income is a total fantasy.
I live in a flyover state and the worst garbage house you can buy in my area is probably 7x and do you want to live in something that's trash?
The reality is that even in non major cities, coastal areas its really more like 8x median income and in exoense places it's 12x to 20x
I did a lot of research on this and until 1980 even apartments in Manhattan were in the hundreds of dollars a month.
Even in many expensive areas it was 4.5x median income and keep kn mind prior to the mid 1990s many households were single income so now most are duel.
And if it's just you, you can't compete with duel income unless you are an elite top 5% income earners
I would! Even if I wasn’t a millionaire provided it was market price or less
There are pros and cons to buying and renting. It depends on your circumstances.
Dont forget forever paying property taxes or HOA even if you own the home. The only place worth buying a house or a condo is abroad. That to me is worth the investment. If you're not there, you can rent it out on airbnb.
Millionaires aren't buying homes because it's cheaper to rent? But doesn't owning provide long-term security?
I already bought a home, 😢
It’s overwhelming, I agree ☝️ .
Renting vs owning is a personal choice. There are probably a lot of good use cases where renting has worked better for many. If you are a millionaire and renting, then you are probably financially savvy and have your reasons.
I only buy real estate for other people to use so I can hold a lease and receive a stream of income...it's not magic.
excellent video by the way Mr Azul
Thank you, this was super helpful =]
Interesting perspective, but I don't believe Azul ever quantifies "Many". My gut says the data doesn't support this. Most millionaires by homes. Homes are a lot more useful than stocks:-) I've owned 7 homes in my lifetime (6 new builds) across several states. Most of them were very profitable. All were useful. The primary outlier was a home purchased just after the 2008 mortgage crisis. Bottom line: If you plan on living somewhere for 5-10 years and you live in a highly desirable area, it's pretty easy to make a considerable amount of money. It's a great way to diversify a portfolio. Having all assets in the stock market isn't smart.
......because they're never home?
Primary residence shouldn't be at as an investment. It's a lifestyle choice with pros and cons. Make your money by deliberate investing and saving.
I know quite a few people that have a lot of money and pretty much all of them have a private primary home. They prefer the privacy and security of not sharing. But, depending on their upbringing and other biases they may or may not pay cash or pay off their mortgage early. Instead, they choose to pay a mortgage and invest their money elsewhere. Marc Zuckerberg is an example of this latter group.
Two things people rarely talk about in favor of owning a home…1) if you rent you are at the mercy of the landlord if they decide they want to sell the house, etc., nobody wants to be told they have to move, especially when you can afford the exact type of life you want 2) if you want to live in a luxury 3000+ sq ft home, with high quality fixtures, it is nearly impossible to find a house like that available to rent, owners
Of these homes aren’t typically messing with trying to rent them out, in part due to cost effectiveness of maintenance on high cost appliances, cabinetry, flooring, etc. I often Zillow this dichotomy in different cities and it always holds true.
Need to legislate private equity and speculation out of the housing market. It's painfully obvious that things are completely out of balance.
A lot of us are not millionaires and won’t become one. So a low effort goal is to become work-optional by 50 and not be homeless in one’s old age. I think the easiest way to achieve it is to buy a small multiple unit building to live in 1 unit and rent out the rest. Then you could work on other goals while not having to spend 12 hours a day working on a job.
A lot of misinformation here. The average real estate agent according to the national Association of realtors only makes $50,000. And the federal government pushed home ownership by rolling out the FHA loan in the 50s after World War II. I’m a realtor and I tell people to buy a house because it serves as a place to live in a nest egg for when you retire even if you set no money aside at all at least you’ll have a ton of equity.
Housing is not an investment. It is a place to live. Interesting housing issues & immigration flood are connected. NY is rent controlled. Retired with an owned home. Glad. Best for us but others can do them
Moving flats every other year is not cheap either, especially if you have fragile items.
I have a home that's fully paid off. But I also live half the time internationally where I rent a condo.
Real estate commissions aren’t going down in a meaningful way. Maybe a small amount but not 30%.
I'd love to see similar price::income ratios for European countries.
I bought a house in 2022. I don’t want the value of my home to double over the next ten years. I want the value of my house to go up 1-2% per year. It doesn’t benefit the owner for prices to go up until you’re ready to sell. It just means higher costs for insurance, maintenance and taxes.
Solid point but rarely acknowledged.
I disagree, most smart money accumulates homes. You can’t sell your apartment or live rent free when you retire. I have seven figures in equity in the two homes that I have left (one has no mortgage) and am pretty much set because I can rent them out for around 10K per month.
Home ownership is much better outside the States...50-60% less in most cases and noooo property tax-
If you do rent its about 50-60% less as well-