[Mortgage Is ‘Just A Fancy Bullsh*t Word For Paying Rent For 30 Years To The Bank,’ Says Real Estate Billionaire Grant Cardone — Here’s Why Renting Could Be A Better Financial Move
](https://finance.yahoo.com/news/mortgage-just-fancy-bullsh-t-171148202.html?guccounter=1)
He assumes an average monthly rental cost of $1354, and 3% rent increase annually. I have lived in apartments where they increased the rent 10% one year and 15% the next.
Even putting that aside, ok, by the time you’re dead, say it works out to the same amount spent. But as an owner, you’ve now invested in a generational asset. Renting now means your kids and theirs will also likely rent.
Gtfo.
I’d kill for my rent to only be $1354.
That’s about my mortgage payment.
You’re forgetting that elder care will eat up that wealth.
Which is the problem we have: For way too many people an asset capable of depreciation is their main or even only retirement savings. So reducing the price of housing will be a problem for a lot of local and state taxpayers.
Not saying it’s right, just saying how it is.
Wait - can you explain this further?
Why depreciating asset?
Also, they probably aren’t selling it right? Just using as a rent-free option after paying mortgage to lower cost of living?
What am I missing?
If we increase the supply of housing, the price of existing stock will go down. Heck, if we keep hedge funds out it might go down, or at least not increase as much as it would.
What pays for the elder care without that wealth?
The state subsidizes their nursing home. That article is false at least in my state.
They do that here in Australia too (probably better than the USA) but there are way more people seeking placement in aged care homes than there are beds available. Waiting times are in the years and so people end up on the street. Especially with the way rent and cost of living is these days. Government pension doesn’t pay enough to rent anywhere.
Even if the subsidise, they still have to find something open in their price range.
The highest population experiencing homelessness is boomers and more and more of the elderly are on the street now.
At least they can sell the house. /s, but not.
My rent has gone up at least $50-$100 a year when renewing my lease since I’ve been an adult renting a residence. In 2015 when I got my first apartment it was $750/month, utilities included except for electric and internet. 2 apartments later and an increase every year, I’m paying $2,000 month plus all utilities and fees for trash. It ends up being like $2350/month all said and done. And sure it’s a nicer place, but it’s not that much nicer. I’m so thankful I don’t have kids, because I can’t afford to feed myself, let alone children. I don’t know how parents are doing this right now.
My mortgage is about that, on a 3 bedroom home, because I was fortunate to buy it in the mid-10s before prices in my area went insane. Our original mortgage was about $1150, but it’s gone up $200 due to property taxes over 8 years. This averages an increase of $12.50 per year, but I know people whose rents have increased by $200 in a single year in my city. Getting a fixed rate mortgage (and refinancing when interest rates are low) is so much more stable than renting
owning several properties for renting and not needing to actually work is the real fancy bullshit.
did anyone tell that to this leech?
“I love renting. I never have to fix anything that’s the landlords job”
To
“Landlords do NOTHING”
In a few short years.
At least you get something in return for “paying rent” to the bank. Paying rent to a landlord is just paying someone elses mortgage, for no return whatsoever.
Also, your mortgage payments don’t go up every year, assuming you’re not a moron and got a fixed rate mortgage. And eventually they stop altogether.
Good luck getting a fixed-rate mortgage these days though.
I gotta renew and I have access to both fixed (6.08%/5y) and variable (6.80%/5y) rates.
The thing about variable rate is that it will not change your monthly payments when the interest rate changes, it changes the amortization (ie: how fast or slow) you’ll end up paying your mortgage according to the interest rate.
It’s a gamble though, personally I’d rather go with fixed at the moment. I did save a bit with the variable rate when I renewed in 2014 and the interest rate ended up going down.
Wdym?
I mean they’re really hard to get now. Even with really good credit.
Maybe I’m misinformed but I believe anyone can get a fixed or variable mortgage of whatever term they choose - the part that is negotiable is the rate on that debt.
So like with good credit or a bigger downpayment you can get a lower rate, but either way you can still probably get a 10% 5y fixed I think almost anywhere.
(I might be off - haven’t looked at rates in a while)
PS. Sorry about that other rude person. There’s nothing wrong with not knowing something, as long as you’re willing to learn
That’s not true in the slightest.
Lmfao.
No they’re not hahah No wonder u don’t own a house…too dumb
That’s uncalled for. I’m dumb as shit and I have a house. Didn’t even know what amortization was when I bought
Having a landlord be responsible for home fixes and appliances is pretty nice to be honest, provided they aren’t a shit landlord. I have a mortgage now which is nice, but the additional headaches are real.
Personally I really like doing my own home repairs and such, I get a lot of satisfaction and even though I’ll grumble and curse the whole time and will often procrastinate on some of my projects, I do really enjoy myself the whole time I’m doing it, even if I don’t always admit it. It kind of drove me nuts when I lived in my apartment and I wasn’t allowed to do a lot of the little repairs and upgrades I wanted to do myself.
But I can definitely appreciate that it’s not a thing for everyone, and because of that it really pisses me off that a lot of landlords, property managers, HOAs, condo associations are so shitty because there’s a lot of people who it frankly doesn’t make sense for them to own a home and be responsible for the maintenance when they don’t have the skills, time, or desire to do it themselves.
We bought my mother in law’s house, she had a whole bathroom that she basically didn’t use because the toilet had a small leak and the aerator on the sink faucet was clogged up with lime and sediment. That took me maybe $20 worth of materials and an hour and a half to fix counting the time it took me to drive to the hardware store with some built in time to wander around gawking at tools I don’t need. She’s someone who probably shouldn’t own a house and would be better served with a decent rental situation, but that’s a lot easier said than done, so now I get roped into doing little repairs for her at her new place is addition to handling my own stuff.
It’s a generational thing. Back in the day, most knew common car, plumbing, electrical issues and their solutions. Nowadays, people consult YouTube and promptly forget it 5 minutes later.
The abundance of information, sadly, doesn’t mean everyone can discern good and bad advices. On top of that, there are a lot of bad advices.
It could also be the fact that a Mon-Fri 9-5 job just isn’t the norm and often isn’t enough for one to live for a majority of Americans, so they have less time to learn, then make those repairs. In addition, prices for tools and materials have obviously gone up, making those repairs more expensive than “back in the day.”
Say your AC stops working at the height of summer. You go online and download the manual from the manufacturer, follow the directions to diagnose the issue. Awesome! You know what’s wrong, you just need to make a special trip to the hardware store (maybe where you live isn’t close to one since brick-and-mortar is more and more rare) and you can’t afford to wait for it to be delivered. So you buy the part and tools required at whatever price they’re selling for there because you can’t shop around. You don’t have another day off until next week, so you try to work a little bit every day on it, but you’re tired from your two jobs and only have a few hours free every day really. You’re having to stop and start constantly so you never get any momentum going on the work and it’s taking forever and the whole time you don’t have air conditioning so it’s hot as fuck. You don’t really know what you’re doing so it’s slow going. You’re losing sleep because it’s so hot and at least one of your jobs is physical and tires you out before you spend an hour tinkering with it every night. The little time that you normally get to spend with your kids is taken by this repair, and it takes almost a full week, and you have to hope you didn’t make a small mistake, because again, you don’t know what you’re doing and you’re just going from the manual, like “back in the day.” Or you could just dip into the savings and hire a guy to come out and fix it in an afternoon.
But you’re right, it’ probably just kids these days.
One should discern between things that do require a technician, and stuff that doesn’t. I’d argue fixing an A/C unit is more on the professional side of things. But yeah, I agree with you - it’s cheaper to hire a technician than spend the time yourself.
Will you come fix my creaky floor? I have no money left and I’m too tired.
Right after I fix my creaky floor.
I also don’t know how to fix creaky floors.
It really depends on what part is creaking, but somewhere there’s a gap near the creak between the joist, subfloor, and/or floor that’s letting things flex. Gotta close that gap to stop the squeak.
Owning a house is definitely not for everyone, and having a savings account for emergency repair is a must. I tend to do most repairs myself, but I know my limits and will pay someone when I know I might screw it up.
I hate to tell you this, bud, but one day, you’re going to die. You can’t take that house with you. Use your money to travel, and live.
Yeah! Once you’ve spent all your money traveling you can just sell your… oh wait.
And you’re still going to die. Live doing what you want to do, or on your knees in debt before the bank. Your choice.
More like:
Live on your knees past retirement age or take out an early 9mm retirement plan before you’re too old to work.
Same for that landlord, he can’t bring the profit he made. I’d rather make sure the money stays in my pocket than his.
Either I spend the money to pay the mortgage or to pay a rent, I’d rather have something I can live in and pass along to my kids.
I traveled quite a bit already, both for leisure and for work before settling down to have a family.
“Renting makes me money.”
Okay, work backwards from there.
FFS these people.
Mortgages make the bank money.
If only there was some kind of large collection that represented the people that could offer loans for cost or near cost instead.
represented the people
Founding fathers laughing in corporate interests
You’d be surprised what they would support. Until the neoliberals killed capitalism there wasn’t really that much problem with the idea of governments running public services.
Hell, usury is a sin. Very clearly defined as such, biblically. You tell them the US government is in a position to act as an interest-free loan office and they probably wouldn’t have any real problems with the idea.
“Hell, usury is a sin. Very clearly defined as such, biblically.”
Ayyyy that would be a wonderful thing to bring up to a Dominionist Republican and watch them struggle between “need to force people to believe we’re a religious nation” and “we cannot give the people services, they must pay.”
Well you see this Old Testament rule doesn’t matter because it benefits their owners.
Until the neoliberals killed capitalism
Capitalism is very much not dead (though it does smell rotten)
It was a bit of an oblique reference to The Man Who Broke Capitalism by David Gelles, I just like to imagine it was murdered instead.
Give me a rental with a fixed monthly price for 30 years and I’ll consider it.
Yeah that goes down as keep paying it and can be leveraged against your debt, and is designed so you don’t have to pay rent when you’re retired
Also with a refund if you move out, in fact often giving you more money than you paid.
Fixed-rate mortgages are quickly becoming a thing of the past as well.
Just another ladder pulled up as we reach it.
Source?
If we built enough, this would be the end state.
Guillotines.
“Freedom is overrated, people are happier when they pick cotton.” Slave Owner
Oh, I have something to say about this.
About 7 or 8 years ago I bought my house. I had friends of mine showing me articles that basically had the same “renting is better than buying” message bullshit.
You don’t really need much brain power to understand that is absurd. Paying loads amounts of money for something that will never be yours is obviously stupid in the long term.
The thing that made me very upset at the time is that my friends drunk the cool aid of these very same article and didn’t buy a property when they had the chance… Now, 8 years after, they are all struggling to buy properties except now is a lot more expensive.
The house you live in should be YOURS and no-one else.
Bought around 7 years ago as well, got told the same things. I said I was taking a bit of a cost hit now to lower my costs in the long term because my mortgage payments will never go up the way my rent payments were.
Fuck me I had no idea things would get this bad, and boy am I glad I got into a home when I did. It really shouldn’t cost that much to rent, this shit is absurd.
I agree that it’s better to own for 95% of the cases, but some of these people talking about renting being best might have been through the '08 crash. With China having their own financial crisis, we could be in a bubble because they invested a lot in US real estate. If your underwater in your mortgage (your mortgage is higher than it’s worth), you do feel like you’re drowning.
I’m not trying to scare anyone, but there is no guarantee that anything stays the same. I also hope people who are buying for the first time understand the different types of loans and they should 99% of the time want a fixed rate.
In a very specific scenario, with a very large amount of running the numbers, as a high income person with low personal expenses and a very good investment advisor, I could see how in certain situations/locations where mortgage rates are much higher than rental rates, that you get better fiscal results investing than paying that mortgage. That was a very rare situation 7 years ago, even more rare now. Where I lived ten years ago, I could not possibly afford the mortgage but I could the rent. These days there the situation has reversed and they’re both sky high regardless.
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You are always paying property taxes forever. You are also always paying the owners insurance policy. How are either cons?
The landlord is not going to pay either out of the kindness of their heart. It’s in your rent. And then you have to buy additional renters insurance - if you want that.
So it comes down to moving being expensive if you want to, or have to. And it makes more sense to store the million your pops gave you in the stock market.
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In any ideal scenario, renting would be preferable to buying for the vast majority of people.
The reason buying crushes renting, in terms of value, is that the value of housing (and thus the price) continually rises. Homeowners get equity and renters get fucked.
This happens because we literally are not allowed to build enough housing. This makes owning a home an investment.
I’ll give you three guesses as to what bloc of voters instituted those restrictions, and continues to fight for them today.
We are in the actual thread that tells you why there’s a problem, it’s corporations and investment funds buying up all of the available supply. We might be tight on supply if we got rid of all of them doing that, but it wouldn’t be a crisis.
I suppose my ideals are different: in an ideal scenario, I think buying is preferable to renting. But besides the problem of having enough money to get started with buying, renting gives a flexibility and reduced (outsourced to landlord) responsibility that’s very valuable for many people, especially in the short term.
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You don’t really need much brain power
Yes, yes. You’re very smart and special…
You’re not exactly wrong, but we should all be focused on the extremely wealthy and giant property companies that caused and are profiting off the housing crisis, yet people like you would rather jack yourselves off at your amazing foresight and laugh at anyone struggling. Try to learn empathy…
deleted by creator
Well, the thing is you never really own it. Don’t pay your property taxes and insurance, see what happens.
Buying makes sense if you’re going to leave that property to children or relatives.
Well, the thing is you never really own it. Don’t pay your property taxes and insurance, see what happens.
What is the point of this comment? As long as you live in society you will be paying taxes. Death and taxes are the two global absolutes, and an argument could be made that death may be ultimately beatable.
And he personally owns how many houses?
And coincidentally wants people to rent them.
To be fair, I doubt he has mortgages on any of them, so while he may be a dumb asshole, he’s not being hypocritical here.
he didn’t become a real estate billionaire by telling people the truth about real estate
Nah I’m sure he rents his house
“Anything but paying me and making me rich is bullshit” - Toddler billionaire throwing a tantrum.
Every time I see articles about this my knee jerk reaction gets more and more unhinged. Regardless, the world would be a better place if people like this were dead.
Thats the nicest way to say it. These people fucking suck.
They’re living piñatas and it’s time to pop em.
Aight let’s see. Mortgage is a fixed rate over an agreed upon term that ends with you owning the property, rent increases every year, you have no control over the property and you get fucked constantly.
Yup, totally the same thing.
Also my mortgage for my 1/2 acre property with 1500 sqft house is $50 less per month than my 900 sqft poorly constructed “high end” apartment rent was about to spike up to. You know, after renters protections were removed during the pandemic.
Quick edit: furthermore, it took me until I was 30 to buy a house. In that time I spent 170k in rent, when I started renting the property I’m currently living in was worth 140k. That’s pretty easy math right there. Just like… Come on.
But… but… but you still have to pay for maintenance and repair.
Ok I’m half kidding, given you still have to pay those things but depending on how the math works it can still be cheaper to own.
It’s always cheaper to own given you live an adult life for at least like 15 years. The rub is whether or not you can afford the upfront costs to get a property.
Also you pay for maintenance and repair and taxes and all that nonsense in your rent, it’s just one bill instead of multiple.
Generally cheaper to own, depending on you staying in the same place for 3-5 years and the market conditions in the interim.
If you bought in 2021 and sold just now, you’re probably having a rough time.
I mean if you bought in 2021 and sold now you probably still made about 90k American. But you’d be fucked on the interest rates if you tried to buy again.
But if you were a real estate mogul, and sold a bunch of properties, on average you’d make 90k per property over those two years and not be dealing with interest rates, which is why the guy from the article is telling people to rent.
But you do have a point, it’s not always. If you bought earlier this year and only intended to stay one year, you’re fucked
I mean if you bought in 2021 and sold now you probably still made about 90k American
Depends on your area but most likely not. Homes in my area have fallen ~15% in value. Plus the costs of selling. Plus the costs of buying your new home. Nah.
The average across America have increased by 90k though over that time. Your area is… Strange.
Cost of buying is negligible, it’s really just cost of selling. So fine, you’d come out with like 65k
The thing is as a renter you basically pay for maintenance and repair anyway. If as a renter I damage a wall, I pay for it, if I leave the house messy when I vacate I pay for a cleaner out of my bond. If the place is freshly renovated my rent is higher to cover it, if there’s an unforeseen expense like a tap bursts, sure the owner pays for it… but then my rent goes up 150 a week next year because of “market trends”
This is not the first time I’ve seen media stories within recent years pushing this idea that renting is better than buying.
This is the absolute stupidest most transparent lie the rich are trying to pull to fuck us. Sure we don’t see all the shady shit with lobbying and and all the details of inflation bullshit. Those are easier to keep mysterious and hide the exact details.
But this rent thing, that’s the dumbest most demonstrably false lie they have ever tried to spread. If anyone is believing that shit, god help them.
We bought our house seven years ago. If we were to sell it today we’d make almost as much in profit as what we paid for it.
We bought our apartment 10 years ago, if we were to sell today we’d be lucky to get what we paid for it. That’s because we’ve just had a repair bill come in for about the same amount.
Still prefer owning to renting though.
Very similar situation here. It was a huge stretch to get it, and I was skeptical, but my partner pushed hard for it and everything got better after we got a house.
Nevermind that we put all of our consumer debt on the mortgage when we renewed, even our mortgage payments are by far lower than anything you can get in town.
It’s crazy seeing materially, exactly how greedy landlords are when I friend of mine in a tiny two bedroom is paying almost double what I pay the bank for a whole ass house.
To me, the big draw to renting is the flexibility. It’s easier to move if you find a better deal elsewhere or you need to move for a job. It’s especially attractive in many European countries where a lease is “unlimited” and doesn’t run out unless you cancel and there’s only a three-month cancellation period. Makes it very flexible.
A bit different in the states where the lease term is set, usually at one year and then you renew and have to pay to break the lease if you move out before the end of the lease. But still more flexible than buying.
A quick sale is much more involved and risky, imo.
Apparently equity is not worth mentioning.
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I think we should conquer his mansion and turn it into a commune.
His massive wealth is “fancy bullshit”.
But what will your job be on the commune?
That’s hilarious. One gardener and a bunch of people doing fuck all
I call being the dictator, once the revolution is complete I pinky promise I will step down
