Adam Says why Home Ownership is a Terrible Investment
45 replies, posted
[QUOTE=Chopstick;51123694]Difficult, I think if I had a mortgage and lets say fully paid it off the first thing I'd do is probably sell most of the crap inside of it then sell the property and use the earnings to rent for the rest of my natural life but alternatively I could just keep it as is and earn money by renting it out then using that money to rent out a different property to sleep in.
In the end I think I'd just rather rent a property instead of paying a mortgage if I am just going to end up back at square one and renting again. The alternative is just sticking to your guns and living in that mortgageless property and cutting down your expenditures until you're OK to just live without a job forever. But that will still mean working for 30 years so either way I am going to be 55 years old and not really enjoy it all that much.[/QUOTE]
Selling a single house won't give you the money to live the rest of your life in an apartment. You can pay off mortgages ahead of time and not work 30 years just to pay off a house. Also why would paying off your mortgage mean you're gonna quit your job?
I'm so confused.
Sorry, for your convenience I just removed the post entirely and will explain it better here using whatever is left that you quoted because of that post being terribly confusing.
I meant to say that it's a rather difficult choice between renting and mortgaging because in one situation, as I understand it you are left with an asset to use that you can live inside of. The other one has you paying it indefinetly and you get to live somewhere until the deal is off etc.
What I was trying to say is that the plan would have been to mortgage and then sell it or rent it out to use the asset as a means to pay for a different property in the form of rent. Of course I would also quit the job if I managed to make profit off of it because I would already be quite old after the mortgage is paid off, this is forgetting however that not all mortgages are 30 years and was just assuming upon that basis that by the time I had reached the ripe old age of 55 years of age, there's not a chance I would enjoy the opportunity and may as well just reap the benefits of being jobless and having retirement early and only working when I get older and more useless.
Not that it matters that much anyway, it wasn't really any of your business to ask but of course I would quit a job if an opportunity to gain a life changing sum of money entered my life. I could apply for any job I like and quit the moment it gets too dull or stressful, a wishful thinking on my part.
Funny that this video comes out just as I buy a home. Lmao.
That's a very simplistic look at it, a decision like this has many factors, you can say some general things, but it's something to consider individually.
[QUOTE=chumchum;51122979]I think someone posted this before which is more in depth.
[video=youtube;KAMeI4uHAFE]https://www.youtube.com/watch?v=KAMeI4uHAFE[/video][/QUOTE]
The entire crux of the argument relies on mortgaging your house and it's extremely dumb to think that it won't pay off in the long run (which it will, because a house is always an investment that you want to hold onto instead of letting it run rampant.)
5 years x 12 months = 60 months. 60 months x 3,220 = 193k.
Not you're going to be offsetting that by monthly rent, which means that, if the Homeowner is a smart person and puts it all into leveraging the mortgage and costs of it, turns it out to be:
60 months x 2,100 = 126k.
193k - 126k = -87k.
Once you've paid off your mortgage and everything then you're it's just going to cost:
520.83 + 301.25 + 80 = 901 dollars a month.
2100 rent - 901 dollars = 1,199 benefits.
So how long is it going to take for you to start making money off of it?
87k = 1.2k (rounded up)
72.5 months which is basically 6 years.
Now it may sound dumb but it's extremely fucking obvious that no matter what the housing market today in multiple countries it's always in your best interest to be buying a house as an asset. This doesn't even matter if you're going to sell and be affected by how much the surroundings is going to change because you're not only going to be buying the house but the land on it, and land will always accumulate in value as urbanization continues to expand.
Growing up in various rented apartments, it feels like I don't have a place to truly call home. I envy the experience of owning a piece of land and perfecting a house just to serve you and your family.
It's just not going to happen for people like me in a city like this.
Median house prices are 1.2 million. Our bubble will not pop. That's just the world for us here. People move here, buy houses and settle down. It's such a desirable area that "affordable" is 1 million. But anywhere else has miserable weather so the options for Canadians is limited
[QUOTE=AG;51122222][video]https://youtu.be/YHU_KLYhibI[/video][/QUOTE]
Wow, this is some of the worst advice I've ever seen. I actually feel bad for people that don't know anything about wealth that watch this and write off owning a house simply because they think owning and renting are the same (or even comparable). Undoubtedly at least one poor fuck is going to take this to heart and regret his choice for the rest of his life when he's old and realizes the mistake.
[QUOTE=chumchum;51122979]I think someone posted this before which is more in depth.
[video=youtube;KAMeI4uHAFE]https://www.youtube.com/watch?v=KAMeI4uHAFE[/video][/QUOTE]
This one is dumb too. A person with $35,000 net worth has no business in a half million dollar house. They shouldn't even be looking at a $200,000 house. Owen the Owner is trying to live so far above his means that he's effectively ruined his long term.
Live within your means, buy a house that fits your [I]needs[/I] and not your delusions of grandeur. You should [I][U]always[/U][/I] be capable of [I]saving[/I] even the smallest portion of cash after [I]all[/I] expenses for a given paycheck—if not, you're living above your means and are dooming yourself to ruin.
[QUOTE=Axznma;51129438]Wow, this is some of the worst advice I've ever seen. I actually feel bad for people that don't know anything about wealth that watch this and write off owning a house simply because they think owning and renting are the same (or even comparable). Undoubtedly at least one poor fuck is going to take this to heart and regret his choice for the rest of his life when he's old and realizes the mistake.
This one is dumb too. A person with $35,000 net worth has no business in a half million dollar house. They shouldn't even be looking at a $200,000 house. Owen the Owner is trying to live so far above his means that he's effectively ruined his long term.
Live within your means, buy a house that fits your [I]needs[/I] and not your delusions of grandeur. You should [I][U]always[/U][/I] be capable of [I]saving[/I] even the smallest portion of cash after [I]all[/I] expenses for a given paycheck—if not, you're living above your means and are dooming yourself to ruin.[/QUOTE]
everything sub-$200,000 in Austin are trailer homes and dilapidated condos that would cost so much in maintenance that they'd hardly be worth it considering how awful your living conditions are in that price range.
[QUOTE=Axznma;51129438]Wow, this is some of the worst advice I've ever seen. I actually feel bad for people that don't know anything about wealth that watch this and write off owning a house simply because they think owning and renting are the same (or even comparable). Undoubtedly at least one poor fuck is going to take this to heart and regret his choice for the rest of his life when he's old and realizes the mistake.
This one is dumb too. A person with $35,000 net worth has no business in a half million dollar house. They shouldn't even be looking at a $200,000 house. Owen the Owner is trying to live so far above his means that he's effectively ruined his long term.
Live within your means, buy a house that fits your [I]needs[/I] and not your delusions of grandeur. You should [I][U]always[/U][/I] be capable of [I]saving[/I] even the smallest portion of cash after [I]all[/I] expenses for a given paycheck—if not, you're living above your means and are dooming yourself to ruin.[/QUOTE]
If you wanted to have a 200,000$ home in my city, you can't.
Those don't exist. You might be able to get an apartment for that price, but it's tiny. Sub 700 square feet.
[QUOTE=SpartanApples;51122296]I'm gonna disagree with this one. Once you get past the initial deposit, often mortgages are cheaper than renting (of course this depends on the house and area/country). And then at the end of 20-30 years you actually have something for all the money you've put in.[/QUOTE]
If I had to live in the same house for 20-30 years I'd kill myself.
I like how some people in this thread are saying that because this dude made one video that overreached a little into something that's more circumstantial that he's shit and all his videos are.
[QUOTE=Loriborn;51129681]everything sub-$200,000 in Austin are trailer homes and dilapidated condos that would cost so much in maintenance that they'd hardly be worth it considering how awful your living conditions are in that price range.[/QUOTE]
Then lpok for a house on the outskirts of town, move somewhere else, or keep renting until youve saved enough money and have a good wnough house to live in central Austin.
The issue with big cities like that is that home values arw always massively over inflated because of their location. A moldy cardboard box in Brooklyn will run you in the low millions, just because its in Brooklyn. Buying a house there twnds to be a wastw but its not impossible to find a reasonably priced home in your area.
[QUOTE=Cyke Lon bee;51129962]Then lpok for a house on the outskirts of town, move somewhere else, or keep renting until youve saved enough money and have a good wnough house to live in central Austin.
The issue with big cities like that is that home values arw always massively over inflated because of their location. A moldy cardboard box in Brooklyn will run you in the low millions, just because its in Brooklyn. Buying a house there twnds to be a wastw but its not impossible to find a reasonably priced home in your area.[/QUOTE]
Yeah median house price where I work is 668k but you go 20 minutes down the highway and it's cut in half.
[QUOTE=Gamerman12;51123401]good to know he's using fair, common, and up to date sources for his research
[t]http://i.imgur.com/n3nBYhA.png[/t]
(note: this is the one source in the entire video, the rest is what real journalists would call an 'opinion piece')
renting and buying aren't black and white and no option is better than the other. and it all depends on actually finding a. a good, trustworthy realtor and b. a good home without all the problems he mentions here and c. a good bank. plus, if you're really worried about being 'tied down' to a house, don't buy a fuckin house. there are plenty of options available for every type of person, whether you're low, middle, or upper class, move around a lot, want to be in a specific location. it's not as easy as renting but shit dude, i'd hope it'd not be that easy to spend upwards to a million dollars on somewhere i'm gonna spend 60% of my daily life in. this is a clickbait bullshit opinion piece.[/QUOTE]
Like I said earlier, Adam and College Humor with these pieces cherry picks and sound bites everything.
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