Hater Eraser
Veteran
Im not listening to this cac .. we living in real life over here .
You crazy if you think renting is better than owning.. ask your landlord which is better when you bring them his / her rent .
Renting and reinvesting the savings from renting, will outperform owning and building equity
- Thread starter Robbie3000
- Start date
Im not listening to this cac .. we living in real life over here .
You crazy if you think renting is better than owning.. ask your landlord which is better when you bring them his / her rent .
Hater Eraser
Veteran
Pay the Bank for 30 years brehs..
Pay (other peoples) Bank debt off .... for your whole life brehs
Kyle C. Barker
Migos VERZUZ Mahalia Jackson
Pay (other peoples) Bank debt off .... for your whole life brehs
I don't think OP is saying he wants to rent til he dies.
He'd rather put his savings in other ventures instead of dropping it on a first home. shyt he's even talking about buying a multi unit building to rent to others.
This is true only if: (1) mortgage + taxes > rent price for a comparable unit; (2) the amount saved is enough to get a higher rate of return than the value of a comparable unit purchased; (3) its a buyers market not a sellers market.
Hater Eraser
Veteran
Thats the prob ..hes "talking too much' .. do some "doing" .
Dudes that "talk" about possibly owning ... rent .
So I pay the bank for 30 years and own a home outright, and you’re still paying rent...that’s laughable?
I can even use high ass Bay Area property taxes as an example..,home paid off, all I do is pay property tax...$1000/month, while a reasonable 1/bd apartment costs $2000+/month...you’re still doing better?
I can sell that home for $800k pure profit (excluding taxes) and you’re still paying $2000/month...this is a better outcome?
I can stay my old 62 yr old ass right there and chill, because it’s mine...you’re 62 and getting booted out your rental, hell maybe even your city or region, because rent went up to $3000/month and you can’t afford to live there anymore...that’s funny?
Breh, do you...but if you have kids, please don’t try to impart any financial wisdom on them, not your strong suit.
Spit what u have to spit bro....
I said what I said... counter the shyt.
Guaranteed muthafukaz ain't acquiring "wealth" from financing a home... but ur banks remain the most powerful entities in the world.
Because ur financing a home...
The End
Damn I ain't even seen videos like this...
I just learned this type shyt from fukking common sense lol...
Pretty much. Prices are artifically too high and dont match most people's salaries. Plus property taxes are outta control.
Invest Now - Cardone Capital
I guess y'all only want to post white folks advice when it works in your favor. Except he operates a multi-million dollar real estate empire.
dora_da_destroyer
Master Baker
You acquire wealth from the appreciation of the home.
and your whole resining of not buying cuz banks make money is stupid, our whole fukking society from government to individuals works on the profit from debt/loans given.
Like I said, do you, but please don’t stand yourself in front of others as insightful on finance and investing.
1) dont use the word "wealth " bro...
Cause I guess u dont know what that means.
Ull make some money from the appreciation of ur home...
Wealth is what those individuals in the government and banks have...
Not those who mortgage a home, sell it. Take the money to buy another bigger home.
Or even renting it out...
U ain't building "wealth" ...ur making some money...
But yes... let me step aside brother...
The floor is urs
dora_da_destroyer
Master Baker
Wealth is used as a word to capture the sum of your assets . If you want to just associate wealth with the colloquial way we use wealthy to denote people with millions, feel free. The reality is the wealth gap between blacks and whites is a matter of an average white wealth of $170k to average black wealth of $20k, the biggest account for this is homeownership.
I have no clue why you’re arguing what wealth is based on your definition of it, but this is how it’s used in economics and research.
You missed the whole point.. You shouldn't be living in an "investment" you should be getting a rate of return higher than the 3% your house appreciates at..
Gotcha...I understand that
The usage of that word in economics is disingenuous...
If a homeless guy made 40 bux washing windows, you wouldnt call that money "wealth"... even tho that is the sum of his assets.
The usage of that word makes ppl actually think they will have wealth...eventually
The way ur explaining why ppl should buy a house... ur saying they are going to build wealth.
But ur really saying they are going to acquire some more money... correct?
If that's all ur saying then.. we are in agreement.
And everybody knows that u can make money off of a house... it appreciates pretty much every year.
The issue for me is others have actually become WEALTHY, generationally weathy... off of the common mans pursuit to make "some money" or just to have a nice roof over his head.
R.E.N. Spells Ren
Veteran
*sigh*
I'm always very leery when I see folks advising people, especially Black people not to buy homes....have y'all been paying attention???
Putting aside investment properties because it seems that the OP is comparing dropping a down payment on a house vs investing that money and continuing to rent.
The median house sale in September 1989 was $120,000 per the US Census so 20% of that would be $24,000. People always look at how much more than that purchase price you end up paying the bank, but that's faulty, so let's play this out. With a 5% fixed rate 30 year mortgage, your monthly principal+interest payments would be $515.35. Over the course of the 30 years you would've paid the bank $185k to borrow that initial $96k. But you also have taxes, the median per this site is 1.2% of the home's value (escalating monthly per the US Census data, so yes your taxes will increase over time), and maintenance, which I'll assume is 1% of the home's value, again escalating (1% is probably way to high too, but it's about $61k over the 30 years, so maybe not if you include a major kitchen or bathroom upgrade in that timeframe). Over the course of those 30 years, you would have spent $346k (including the downpayment). If instead, you chose to rent, following this escalation in median rents in the US, you would have spent about $342k over those 30 years. Note that the 1989 rent is $600 while the 1989 Mortgage + taxes is about $640, so comparable with the home being a little more expensive monthly....at first. The costs of living expenses in each scenario is pretty much a wash over these 30 years.
Now, the rental spend doesn't include the $24k, cuz the OP is saying invest that. From Sep 1989 to Sep 2019, the S&P 500 rose by 315% (11% ARR turning your $24k to about $100k)) per this site while the DOW Jones rose by 387% (13% ARR turning your $24k to about $117k) per this site and the NASDAQ rose by a whopping 724% per this site (which is a very healthy 24% ARR over 30 years). So let's say you had the foresight to invest heavy in tech in 1989 (i.e. the NASDAQ) and saw your $24k investment blossom to about $198k in 30 years.
The buying route saw you spend $345k including the $24k downpayment. The house you bought in 1989 for $120k is now worth $299k (again using the US Census data for the median house in September 2019). $299k from an initial investment of $24,000 is a 38% ARR. Then when you consider the tax implication (you're not taxed on the first $250k of profit from selling your official residence; $500k if you're married vs paying ~15% capital gains taxes) and it's clear that the home buying route is the winner.
Of course there are a lot of variables, but you would've needed a damn good investment prospect to beat out the long term returns associated with owning your home.
I'm always very leery when I see folks advising people, especially Black people not to buy homes....have y'all been paying attention???
Putting aside investment properties because it seems that the OP is comparing dropping a down payment on a house vs investing that money and continuing to rent.
The median house sale in September 1989 was $120,000 per the US Census so 20% of that would be $24,000. People always look at how much more than that purchase price you end up paying the bank, but that's faulty, so let's play this out. With a 5% fixed rate 30 year mortgage, your monthly principal+interest payments would be $515.35. Over the course of the 30 years you would've paid the bank $185k to borrow that initial $96k. But you also have taxes, the median per this site is 1.2% of the home's value (escalating monthly per the US Census data, so yes your taxes will increase over time), and maintenance, which I'll assume is 1% of the home's value, again escalating (1% is probably way to high too, but it's about $61k over the 30 years, so maybe not if you include a major kitchen or bathroom upgrade in that timeframe). Over the course of those 30 years, you would have spent $346k (including the downpayment). If instead, you chose to rent, following this escalation in median rents in the US, you would have spent about $342k over those 30 years. Note that the 1989 rent is $600 while the 1989 Mortgage + taxes is about $640, so comparable with the home being a little more expensive monthly....at first. The costs of living expenses in each scenario is pretty much a wash over these 30 years.
Now, the rental spend doesn't include the $24k, cuz the OP is saying invest that. From Sep 1989 to Sep 2019, the S&P 500 rose by 315% (11% ARR turning your $24k to about $100k)) per this site while the DOW Jones rose by 387% (13% ARR turning your $24k to about $117k) per this site and the NASDAQ rose by a whopping 724% per this site (which is a very healthy 24% ARR over 30 years). So let's say you had the foresight to invest heavy in tech in 1989 (i.e. the NASDAQ) and saw your $24k investment blossom to about $198k in 30 years.
The buying route saw you spend $345k including the $24k downpayment. The house you bought in 1989 for $120k is now worth $299k (again using the US Census data for the median house in September 2019). $299k from an initial investment of $24,000 is a 38% ARR. Then when you consider the tax implication (you're not taxed on the first $250k of profit from selling your official residence; $500k if you're married vs paying ~15% capital gains taxes) and it's clear that the home buying route is the winner.
Of course there are a lot of variables, but you would've needed a damn good investment prospect to beat out the long term returns associated with owning your home.