Forget Everything You’ve Read: Buying a House is NOT For Suckers

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Some time back, one of my favorite online financial gurus, Grant Cardone, put out a video that exclaimed, “Buying a house is for suckers!”

Before that, he wrote here on Entrepreneur that, “Unless you have 20 million bucks in the bank, in cash, you have no business buying a house.”

It’s not the first time I’ve heard him say this, nor is he the only financial guru peddling this message today. Author James Altucher has described time and time again how he’s refused to own a house. Remit Sethi, the blogger behind the I Can Teach You to Be Rich brand, often cautions readers to be wary of buying real estate. Even Robert Kiyosaki, author of Rich Dad Poor Dad, has become famous for informing the public that a home is a liability, not an asset.

Related: An Investor Answers: “Should I Buy a House for Myself or Purchase an Investment Property?”

Yet, for the majority of Americans, home ownership is clearly a part of the American Dream. Even a guy like me — a landlord for the past decade — has had to stop and ask if there is any truth to this. Is owning a home truly for suckers, as Cardone said? Or was the headline over his Business Insider video just click bait?

Here, my goal is to explore the the three primary reasons Cardone and other financial gurus typically use for arguing against buying a house — and offer a counter-argument.

1. It depends where you live.

Should you own your home? Maybe. But, maybe not. Real estate is expensive. In fact, that’s one of the primary reasons a lot of homeowners and landlords fail.

Besides the mortgage payment, the owner of the house also has to fix the plumbing, replace the roof, shovel the snow, paint the walls, replace the carpet — you get the idea. There are a lot of hidden expenses above and beyond the cost of the mortgage to consider, and the older the property is, the greater those expenses tend to be.

However, in many areas, it is still cheaper to own than rent. For example, in my town, I can purchase a decent single family home for around $75,000, which works out to a mortgage of around $500 per month, with taxes and insurance included. That same house would rent for about $1,000 per month. So, does the average homeowner of a $75,000 house have $500 in house-related expenses each month? Not unless he or she owns a terrible home.

Therefore, where I live, at least, it makes a lot more financial sense to own versus buy — even with the repairs and maintenance required. Of course, in some areas, it might be far less expensive to rent than to own, while in larger cities such as New York, San Francisco, Miami and other cities,the opposite is often true. All these facts add up to why you shouldn’t take blanket advice from the internet when you make your decisions.


2. Owning a house makes you immobile — or does it?

This was the primary reason Cardone put forward for his argument against buying a house. “To make money today, you need mobility,” he wrote.

Related: Buying a House: The Ultimate Guide to Purchasing Your First Property

Personally, I found that weird — because I’ve lived in the same county for 10 years, and I’ve made money. Lots of it.

So, do you truly need mobility to make money? Sure, mobility is fun. I remember “mobile life.” Living out of a suitcase, sleeping on friends’ couches, eating leftover cold mac ’n cheese I found in the back of the fridge. All hail mobility!

But, then, a funny thing happens: We grow up. We start having responsibility for things in our life. We actually want some kind of stability. We want to raise our kids in the same place. We don’t want to lose the friendships we have with our neighbors. We want to avoid having to move again and again and again because of someone else’s decision.

When you rent a home, yes, you can leave when your lease is up, which might be six or nine months down the road. Or, if you sell your house, you can be out in a month or two. Even better, if you need to move suddenly, you can just rent your house out to a tenant and — gasp — move! Now, you are building wealth through rental properties and you are free to be mobile — whatever that means.

3. Is real estate a bad investment?

Many financial bloggers love to point out that real estate values climb at a pace slower than that of stocks. Okay, that might be true, but it doesn’t tell the whole story.

As famed economist and Nobel prize winner Robert Shiller has pointed out, using the S&P/Case-Shiller Index, home values over the past 100 years have appreciated, on average, at nearly the same rate as inflation: around 3 percent.

So, should we immediately reject buying a house because it doesn’t appreciate fast enough?

Of course not. Real estate appreciation is just one of several benefits to owning property. When you own real estate, you don’t usually pay 100 percent cash for it. Instead, you obtain a loan and use a small down payment to take possession. That way, although the price of your property may increase only 3 percent, your actual return on investment could be significantly higher.


The largest drawback to renting

The bottom line is, should you buy a house? I have no idea; maybe you should, and maybe you shouldn’t.

But, if you base your decision on a financial guru telling you that “buying a house is for suckers,” we need to talk. In his video, Grant Cardone said that, “The best investment you can make is to have choices and freedom.” I couldn’t agree more. And when you choose to rent, you give up a sizable portion of your freedom to live the way you want to live; you hand that freedom over to a landlord like me.

Related: The 7 Vital Steps to Buying a Single Family Rental House

When you own a house, on the other hand, no one is going to come kick you out because he or she has made a decision for the property that doesn’t include you. You won’t be forced to move your kids to another, less desirable, school district. No one will arbitrarily increase your rent because the housing market has improved, decreasing the number of homes and apartments available in your city.

Further, no one is going to refuse you the ability to paint your bedroom the color you want, or to put in gorgeous new hardwood floors. In other words, when you own a house, no one is going to tell you what to do.

But do go ahead. Keep renting. I’ll keep buying rental properties and growing my own wealth. I’ll keep telling you to clean your deck, I’ll continue to deny you permission for your boyfriend to move in.

I may also decide to raise your rent, because I need an extra latte or two this month.

Now, that’s “freedom.”

[This article was originally published on]

We’re republishing this article to help out our newer readers.

What do YOU think? Is buying a house for suckers?

Let me know your thoughts with a comment!

About Author

Brandon Turner

Brandon Turner is an active real estate investor, entrepreneur, writer, and co-host of the BiggerPockets Podcast. He began buying rental properties and flipping houses at age 21, discovering he didn’t need to work 40 years at a corporate job to have “the good life.” Today, with nearly 100 rental units and dozens of rehabs under his belt, he continues to invest in real estate while also showing others the power, and impact, of financial freedom. His writings have been featured on,,, Money Magazine, and numerous other publications across the web and in print media. He is the author of The Book on Investing in Real Estate with No (and Low) Money Down, The Book on Rental Property Investing, and co-author of The Book on Managing Rental Properties, which he wrote alongside his wife, Heather, and How to Invest in Real Estate, which he wrote alongside Joshua Dorkin. A life-long adventurer, Brandon (along with Heather and daughter Rosie) splits his time between his home in Washington State and various destinations around the globe.


    • Nick S.

      Calling someone idiot that most likely has many times your net worth, is not a good thinking. While author might slightly disagree with GC didn’t call him an idiot.
      Owing a house is different for everyone. One need to to the math for their situation. I own in order to offset some taxes that I would pay anyhow. In terms of housing I will live cheaper renting but pay uncle Sam more. In net terms, considering big picture house helps me to keep more of my dough.

    • Maria C. Vazquez on

      Hi Brandon, I usually don’t make comments, but that guy Grant Cardone couldn’t be more wrong! I totally agree with you , thanks for giving your point of view and the reasons to back it up so clear in case someone got confuse with Cardone.
      I enjoy the BiggerPockets community so much and your webinars are super!!!!
      Have a great weekend with your lovely family,

    • Moshe H.

      Good point, Hunter. In my area owning is a little more expensive than renting, but home values are strong and my residence has appreciated a comparable amount in the four years since I’ve owned it. The only reason I own an investment property now is that I was able to take cash out of my home equity due to appreciation. I’m not patting myself on the back for my genius, because I wasn’t thinking strategically when I bought the house, but thank God it worked out very well. So… owning is not always bad. Every situation is different.

    • warren currier

      Same here. In March, 2014, my wife and I bought a place for $945K and soon after we had it under contract a decision was made about which school the kids living on our side of the street could attend. We weren’t really aware of the magnitude of the whole thing when we made the offer but when the decision went ‘in our favor’ the seller’s agent said, “Right NOW I could get one-million fifty thousand. Obviously, we were pleased. Since then we’ve been offered $1.28MM for the place! We’re not selling. We’ve moved out of that house and get a $4500.00 check from a renter every month.

  1. Jeff M.

    Brandon: I am glad you provided this correction. My opinion is that you and Josh do the BP community a disservice when you give “personalities” like Grant too much unmitigated airtime. Harsh feedback? Listening to his podcast was like watching the High School bully strut through the halls with his minions behind him saying “awesome, awesome”. Contrast this to the Podcast with Bill Powers on 185. You had an insightful discussion with Bill and I learned a lot.

    Thanks for what you do and keep on learning with us.

    • Steve Hovencamp on

      Great article but I actually agree with Grant Cardone on this particular subject. The guy does have 45 hundred units and a private jet. I’ll probably be ridiculed for agreeing but that’s fine.

      • Susan Maneck

        Yeah, he makes a lot of money off of suckering people to rent rather than buy. Me? I’ve told every one of my tenants to let me know when they are ready to buy because I will always sell them the house they live in or a better house if I have one. I also tell them about the programs they can go through on home ownership and how they can get 5K towards their down if they do so. But my dream is to make as many of them them into homeowners as possible. But there are plenty of places where renting is makes more sense than buying and that is where the mortgage exceeds the rent as Brandon rightly points out. I’d say it is the case in California but I just bought my vacation/retirement condo in Lake Tahoe for 110K and currently have it rented for $975. Not the returns I’m used to getting here in Mississippi, but I’m going to live in that condo someday and if I waited I would never find something affordable. Besides, I have the best property manager possible, my mother.

  2. Ben Leybovich

    Listen, good looking….

    First, back off of Grant Cardone is wrong is wrong stuff – that’s been done…by me…and done very well indeed!

    Second, you are wrong here, and Grant is totally right, and coming from me that’s not nothing, considering our past 🙂

    You just have to internalize the numbers. You bought a house a while back, right? Probably already spent $20,000 on it since you bought it, remodeling the kitchen and all the rest. You paid more than you should have to begin with, because this house is what your wife wanted. And now, good luck getting out of it.

    Furthermore, over the next 10 years, you will spend another $20,000 to keep the thing working as it should. This means that in order to get out, you’ll need to cash out purchase price + $40,000 + RE commissions — and that’s to break even.

    Now tell me – is that happening in Montesano in the next 10 years? And in the mean time, your property taxes and insurance are going one way – can you guess which way?

    The house we live in is a liability, just like Rich Dad and Cardone say, and the only way to turn the paradigm is to either get in at a substantial discount to market, or to househack in order to offset the cost.

    On my house in Lima I did neither, and I felt the pain when I sold, for more than I paid, but less than I had in it over the years. You’ll find out what this is about in a few years 🙂

    • Jason Brenizer

      Ben Leybovich. Hero.

      You always run the numbers down to the bone, and I thank you for that.

      Most homeowners fail to keep rigorous capital expense records to know if selling will have a negative return. How many people buy their own house strictly as an investment? They usually lend so much weight to proximity to work or the quality of the school system.

      I live in central Austin, TX. Prices here are crazy. I still live in the house I bought in 2002 as a live-in slow flip. I bought the worst house in a pre-gentrification neighborhood for $130K, did a $50K renovation. I planned to sell within 5 years.

      I kept it as a rental when my wife and I lived overseas for 5 years. The last group of tenants turned our lovely 2500 s.f. home into a music venue for SXSW, without our consent of course. Talk about learning the lesson of owning outside your market and bad property managers the hard way.

      $45K later, it’s our house again. Yes, it appreciated greatly. We could get a buyer within 2 weeks at $600K, even though the kitchen could use a serious remodel. The land alone is worth $250K.

      But we got lucky with appreciation only because I picked the right location. Some would argue I read the trends. I say no matter how much data I thought I had, it was still a gamble. Not quite roulette. More like poker.

      If the market goes down again, some of the appreciation will be lost. Maybe all of it, if Kiyosaki’s big fall happens this time around.

      And still with all that glorious appreciation, my house is the very definition of a liability. More money goes out than comes in on a monthly basis.

      When we upgrade (to a million dollar home) we’ll definitely be renting.

    • Paul Hormann

      I agree that your house can mostly be a liability, but so is the human need for shelter. You’re born with a built-in liability you can’t get rid of. So I think the comparison is not whether or not you break even, but if buying a house or renting that same house is more or less of a liability. This would need to factor in cost of money, liquidity (opportunity cost of down payment), tax incentives, risk, etc. I could put the comparison spreadsheet together for it, but I think I’ll concentrate on looking for more deals instead 🙂

      • Bill Briscoe

        ^ Exactly this Paul.

        If I rent a comparable house to what I live in, I’m out $25K-30K per year in rent (and none of that is tax deductible). Instead, I’m paying $735/mo in mortgage, and another 400 in Tax and Insurance – less than half of comparable rent.

        Furthermore, the rent is going up every year for the rest of my life, and faster than just my tax and insurance goes up. Meanwhile, my mortgage will be paid off at some point, and that $735/mo is no longer a liability. And I pay less in income taxes than I would if I rented, due to my property tax deduction, and interest.

        Maintenance/Renovations? I certainly don’t spend anywhere near the 10-15K more that I would be paying to rent on this. Maybe $350 a year on paint bc my wife likes to decorate. Roofing? – I’m getting a new one next month because of a hail storm, and worst case will be out of pocket only $1500, but due to the excess insurance payments they are giving me for fence damage that I fixed myself for free, it will probably cost me nothing.

        What if I want a new fridge or washer/dryer or furniture? Renters pay for those themselves too, at least in my area, on top of rent. Plus they should be paying renters insurance for their belongings, also on top of rent.

        Car insurance? I get a discount there because I own my home. Not really a reason to own, but a nice bonus.

        Mowing and snow clearing? Resident pays for that regardless of ownership status…

        And best of all, when I get old and go to the nursing home, I have a saleable home worth a quarter million assuming zero appreciation. Whereas if I rent my whole life, I would have only the other investments I had acquired over time, but since I would have been paying so much in rent, they probably wouldn’t be as substantial as the outside investments I already have purchased on top of my home.

        • Practically speaking, the rent to buy comparison can be misleading when it comes to the way people analyze their household budget. Many people rent a smaller place or an apartment compared to what they would buy. Wealth is how much you keep, not how much you make.

          There are so many variables to factor in. For example, my son’s rent is about $1200. But the PITI on a median house in his community is at least $4000. Median rent for a comparable house is about $3000. Here is another consideration. The PITI is about $4000, but the PI is about $3000. So at least $1000 is “same as rent,” in other words, does not buy equity anyway.

          So he is not buying even though he wants to. He would rather save the difference between HIS actual rent and the median rent for a comparable house for the down payment. He is saving for the day when his down payment, raises at work and house prices finally intersect.

    • joseph hennis

      I want to offer a slightly different perspective. The reason I am investing in real estate, my “dream” so to speak, is for me to OWN a particular type of country multi million dollar home free and clear. If I didn’t have that dream, I would not be investing in real estate, period. Some people like cars, some like travel, I like beautiful homes. I like not having someone telling me what to do in my home.

      The home I live in is not an investment, it is a liability… Just like my car… and my furniture… and everything else I own… Why own anything then?

      Look, I believe in living below your means, and my wife and I definitely do… But if I had to have some landlord bothering me all the time… None of the trouble I go through investing and managing my rental properties would be worth it for me.

  3. You wrote: \”I can purchase a decent single family home for around $75,000, which works out to a mortgage of around $500 per month, with taxes and insurance included. That same house would rent for about $1,000 per month.\” … \”Therefore, where I live, at least, it makes a lot more financial sense to own versus RENT.\” [ you actually wrote OWN VS *BUY*]

    But we know you know that\’s not the whole story!

    Let\’s say an average homebuyer puts down 20% or $15,000 with a 30 year fixed mortgage. They could have instead taken that $15K and put it in the stock market and made about 10%/yr compounded or about $260,000.

    The renter pays $500/mo more for 30 years = $180,000.

    Therefore the renter is 260,000-180,000 = $80,000 ahead.

    Wouldn\’t it be silly for me to say, \”Therefore, where you live, at least, it makes a lot more financial sense to RENT versus BUY!\”

    Obviously that would be silly because there are a zillion variable and other things to take into consideration — appreciation of home, but expenses home owners pay that renters don\’t, increases in rent, but increases in property taxes, some people put down less, but then they probably have PMI or a 2nd mortgage, etc, etc.

    Therefore any real financial analysis has to take MANY factors into consideration, and a blanket statement like saying monthly rent is higher therefore homeownersip is better, is silly.

    BONUS: If you are an entrepreneur, which obviously the readers of this site are, then what ELSE could you do with $15,000 or so? In other words, what is your lost opportunity cost if you buy a house? Try this on for size!…

    5 People Who Turned $1,000 Into $1 Million

    • Chad Carson

      I took Brandon’s point as the decision DOES have a lot of variables. That is why blanket statements like home ownership for suckers is ridiculous. Brandon is just giving some much needed balance.

      And the math you used to make a point was off. You are being generous estimating 10% returns in stock market, past performance aside. But even if the renter has $260,000, you penalized the owner for $180,000 of payments and forgot about renters $1000 adjusted for rent increases. That is $360,000 if rents never increase!

      And the home owner has no debt and perhaps a $200,000 house or better after 30 years.

      So $260,000 – $360,000 = at least -$100,000 for renter vs -$180,000 + $200,000 = $20,000 or more for owner. Again, numbers are too simple but Brandon’s example and other points make sense.

      • “And the math you used to make a point was off. You are being generous estimating 10% returns in stock market” and no, that is perfectly reasonable with a 30 year time horizon.

        “and forgot about renters $1000 adjusted for rent increases” & No I didn’t. I actually wrote, “increases in rent, but increases in property taxes” — which you forgot go up, and so does insurance, and also renters don’t pay for appliances when they go bad, or roofs — homeowners do.

        “And the home owner has no debt” & why would a renter have debt??

        “perhaps a $200,000 house or better” & there is massive variation in home value increases, or decreases!, depending on many variables. Investing in the stock market correctly (a globally diversified portfolio of low-cost index funds utilizing Modern Portfolio Theory) is highly likely to achieve very close to a 10% return with a 30 year time horizon.

        • Chad Carson

          I gave you the 10% stock return. That is not the issue with the math. And rent increases vs tax/ins increases is not the issue. Call it a wash, although 3% inflation on $1000 rent is more painful than inflation on a couple hundred per month tax/ins bill.

          The issue is you left out the equity in his free and clear home.

          If the value is $150,000 – $200,000 in 30 years, he can sell and use that wealth. And $150-$200,000 is better than $80,000 last I checked.

        • “You are being generous estimating 10% returns in stock market.” Yes, you are being generous. Studies have repeatedly and consistently shown the individual investors returns are only a fraction of historical stock market returns. One reason is that investors, in spite of their best intentions, buy high and sell low. Another reason is survivor bias. The historical returns fail to account for the stocks that went belly-up. Even if you Invest in the stock market correctly and leave it there for 30 years, if your 30 years happened to be 1962 -1992, your annualized rate of return was 1%. During the same 30 years. a passbook savings account averaged about 5%.

    • Chad McClain

      You’re calculations are missing a pretty important part. What says the homeowner can’t invest the $500 monthly savings in the stock market? The compounding interest from the continuing investment alone swallows the $80,000 difference whole and puts the homeowner drastically ahead.

      • You own a house? You think you never need to replace the roof? Siding? Air compressor? Water tank? Windows? Appliances? Carpet? Mow the lawn? Re-pave driveway? Repair toilets? If you don’t have a reserve fund — as a homeowner — you are going to be in for some nasty surprises over 30 years!!

        • Bill Briscoe

          Yes, I own a house, and have for 15 years. maintenance doesn’t cost me anywhere near $500/mo. As Brandon said – if it did you must have a really bad house.

          Mow the lawn? Seriously, I’m tired of debunking these non apples to apples fallacies. SFH renters MOW THEIR OWN GRASS. What type of dwelling you live in and whether or not it has a yard is a separate decision from owning vs renting. Rent vs own should be strictly a financial decision between comparable properties.

          I fix my own toilets for under $20 in parts. Appliances? Renters have to pay for those in my state – fridges and washers and dryers aren’t included in the rentals I own. Water Tank? $600 once every 10-12 years. Air compressor? Never owned one. Siding – I have brick and it pretty much lasts forever. Paint, I do myself for $35/gal. Roof? I’m getting a new one for next to nothing due to hail damage. (My insurance is kinda high, but its still lower than renting. Landlords have to price in the insurance too). Carpet – that’s about the only significant expense I’ve made in my homes. But still no where near $500/mo for all of the above items.

          And if you want to put a value on my labor – for one, I enjoy projects, and two, I’m uncomfortable with strangers being in my home. So its less of a hassle for me to fix my own toilet on the weekend than it would be to have to call a landlord and meet him and let him into my private bathroom and wait for him to fix my toilet.

  4. Matthew Gardner

    I dunno – I think “allowing” tenants to paint a bedroom and having a domestic partner move in seem like pretty reasonable requests. It’s great to have rules and standards; it’s also great having long term tenants who are not being treated like recalcitrant teenagers.

    • Deanna Opgenort

      If the boyfriend can pass the same background check as the initial tenant, fine. If the boyfriend has just gotten out of prison for stealing weapons from the government or has tried to steal a plane, um no. (these are real examples, BTW. Why a name search of tenant prospects is mandatory).
      As far as painting, I allowed purple and pink bedrooms once. The single coat of cheap white paint on move-out didn’t cover. In the chaos of moving, tenants simply don’t have time to do everything, despite best intentions. My new tenants will get to paint, but only a light neutral color that won’t need to be repainted when they leave (a classy tan w/white trim, & maybe a sage green). I’ll even supply the paint since one of the rooms was in need of touch-up anyhow (win/win).

  5. Isaac Hobbs

    Cardone is both right, and wrong but it depends on the location. I work in a large residential brokerage and his video from Business Insider went through the office a couple weeks ago with the obvious negative reactions from my fellow brokers who’s livlihood depends on selling people a home
    As I’ve worked through it I believe he is completely right in the sense that owning a home may bring a long-term return of pennies when leveraging your money, time and effort could bring you back millions. So obviously if someone is investing in something that brings back only pennies then the guy making millions is going to say that is stupid and be correct. However, most people don’t want to put time, effort and money into taking risk and building portfolios or the like. For these people, owning a home is the best decision for them because rather then throwing money down the drain by renting, at least they’re staying somewhat stable.
    For me personally, I rent a cheap apartment with a couple buddies and use my money for my business, my first purchases will be multi-family that I can rent out. This makes financial sense to me and is the best way forward in this area. For my parents though who are part of the hardworking middle class who just want to be enjoying their life now and not be learning new things or taking risks, I’m advising them to just stay in their home and maybe, maybe buy another home in the future they can rent out and build equity in.
    Bottom line, for different people with different goals, there’s going to be a different opinion. I agree with Cardone because it fits my goals, I also advise people to do just the opposite because that’s what will work best with their goals.

  6. Goran Vejzovic

    I am both a fan of BP and GC. Its true most of the time “shock value” in GC’s world pays the bills so why not pique peoples interest and promote a healthy discussion about the topic. Like everything in life, there is no “the best way to do something” that covers every single individual on the planet. People have different set of circumstance and where they are in life so to each their own. Focus on your OWN goal and what you want to achieve, how you get there does NOT have to be by following anyone else’s footsteps. Make your own path!

    Great article btw!

  7. Joe Cantanzriti

    Great article Brandon Turner. These controversial topics are what make real estate so fun and exciting day in and day out because there isn’t one right answer to anything for everyone. Grant Cardone’s ideas certainly are controversial but he does own more real estate than 99% of investors on BP so he must be doing something right.

    • Christopher Lombardi

      Cardone makes his money through motivational speaking, books, courses and advertising. He says he “preserves” his money with real estate. He also said he thought it was stupid to buy real estate with little or no money down. “The only purpose of real estate,” he says, “is to preserve money.” This is not a guy people should look to for real estate advise or financial advise. He is a great motivational speaker and there is nothing wrong with that, but his intelligence is not in real estate or financial matters. He owns tons of real estate, but didnt make his money in real estate, he made it through other means.

  8. Damon Oubre

    Good article that shows a different perspective! I tend to think Cardone’s advice is geared towards those who would put “getting rich” in the forefront of the “slow and steady wins the race” concept.

    The numbers would say Cardone’s theory is correct, since investing in multi-family housing would give you a higher return than a single family home in both short and long term investing.
    If you invested in an additional multi-family complex instead of using that down payment on a home, you’d come out with a better ROI in almost every case.

    However, to each his own, since comfort and convenience may be a necessity for many to function properly.

  9. steve portock

    Cardone is right. Seriously how are you are investors and can’t see this? House don’t appreciate ever, let that sink in please. Houses are not some magic thing that goes up in value. Your purchasing power went down in value, that’s all that happened, you just are not seeing it. A house is like a car, most expensive when brand new, there is utterly no reason for it to go up in value. Its all a game being rigged by realtors and others who have in interest in this. Take your grandparents house from however long ago, look at what they bought it for. Next look at what its worth today. Now take that magic “profit” you think you made on it when it sold. Next take that same purchase price and inflate that to today’s dollars and tell me if you made any money on it? In pretty much all cases you did not make a dime, and in fact lost money. 3% inflation is a joke of a number and nowhere near reality. In my own example I have been renting a house from a corporate nationwide lender, for over 4 yrs now. Given all that they have fixed in that time, I am pretty dam glad I did not “own” this lol. If you are honest and run your own numbers, you almost never make any money, and are lucky if you break even at best. Unless you bought a house way under market and fixed it up, that might be the only scenario where one makes money on a house, however most people are not doing that.

    • Bill Briscoe

      Owning is not about the appreciation. That could happen and it would be a bonus.

      But owning is about the amortization. Part (most of you have a low interest rate) of your monthly payment goes to paying down the principle on the loan, and you are still paying less per month for mortgage, tax, insurance AND maintenance than you would to rent the SAME home in most areas of the country – certainly where I live.

      Also a house is Not like a car. Car prices invariably go down. Homes bought in a normalish market will track inflation (which is usually positive). No, they may not go up in real value, but you aren’t losing value either like you do on a car.

      • steve portock

        Bill please stop it, you clearly have no idea what you are talking about. You don’t ever “own” the house, thats a lie that keeps on playing itself out. Stop paying your property tax and show me what you own when the gov’t entity where you live takes your house. Renting is still cheaper in almost every area of the country now. You lack the ability to analyze the situation for what it really is, and its clear you have no clue how money works in this country or what’s happened over the last 30 years. On the back end of that low rate mortgage you think is so cheap is a pension fund thats getting a negative return, its a dangerous game being played now. Just stop it and quit with responding back like everyone here is in second grade. Most here know quite a bit more about money than you do and its quite obvious from your responses. Houses don’t appreciate ever, there is nothing that makes that happen, you just don’t get that the higher price your house now fetches if you sold it, is really how much purchasing power your money lost over a given time span and interest rate. If rates stayed constant and the money here was stable, you would see little to no appreciation whatsoever. Go ask your grandparents or anyone their age if things cost less today than they did 30 yrs ago, in fact I bet you even have a 401k and think you will see a dime of that when you retire too lol. Cardone is right, and anyone who disagrees please argue some objective facts that shows otherwise, i have yet to see that in any response on this.

        • David Krulac

          1. Agree, on appreciating values of houses. As I talked about in Bigger Pockets Podcast #82, clearly Capital Gains Tax should be indexed for inflation. You are paying in many cases totally a tax on inflation. If you buy a house for $25,000, keep it for 25 years and sell for $100,000, almost all if not all of the “Capital Gains Tax” is a tax on inflation over that 25 year period. If the tax was ever to be indexed, the tax payer would see for themselves how little gain not attributed to inflation.
          2. Agree, if you don’t pay your real estate taxes, you will eventually lose your real estate. There are about 18 countries in the world out of 200 or so that have no real estate taxes. I’ve been to two of them. In one country there is no income tax, no capital gains tax, no real estate taxes and no inheritance/estate taxes. Sounds like a great place! However that’s not happening here in the US, ever.
          3. Disagree that renting is cheaper in almost all of the country. with the low interest rates like 3.5% fixed for 30 years, the cost of ownership is way down. Just sold a SFH on Monday. The buyers P+I is $519. Taxes and insurance another $157 mo. for a total of $676. I had rented the house for $1,250, tenants paying utilities, cutting the lawn and shoveling the snow. The house was sold retail through the MLS to an owner occupant, who clearly is paying $574 less per month than the tenants on the same property. The house has a new 50 year roof, new high efficient gas furnace, new central air, all new floor coverings, new paint inside and outside, new gutters and downspouts, new range and dishwasher. It also has a fireplace and 200 amp electric. (No other appliances were provided either to tenant or buyer, both supplied their own.) Its not going to cost $574 in maintenance a month on this house. This is not an anomaly, I sold another house in the neighborhood this year for $79,900 with gas heat and central air. Sure there are high priced areas where buying is more expensive than renting, I was just out at the SF Bay Summit for example. But out of the 50 states, there are plenty of areas where buying is cheaper in some cases much cheaper.

    • Francis A.

      Steve –
      You make fantastic points about houses not appreciating. Check out this FEB 2017 article about that famous investor purchasing a home in 1971 for $150,000 and selling in in 2017 for $11,000,000. Yes this might be an outlier case but I’m interested to hear from you and other numbers guys what the inflation of the dollar since 1971 till now affected this price to see what part of the price is “your dollar losing value” versus the location (Laguna Beach, CA) and maybe the “celebrity” part of the price?

      I hope I made sense.

  10. Julie Hassett

    YESSSSS!!! I’m so glad you wrote this post. The whole time I was listening to him spout this rhetoric, I was thinking what a huge contrast it was to your and Josh’s “do what works for you” attitude.

    No doubt, buying a primary residence is an investment in HAPPINESS – first and foremost. It won’t make you happy every day, but that IS one of its main purposes. Sometimes I just stand in my amazing living room and look around and tell my house how much I love it. Seriously.

    I want to put down roots, build community and make an impact in Baltimore. So buying a beautiful home with a yard in a superb neighborhood for the same price as renting a rowhome makes sense for me.

    Will I get all my money back when I sell? Who knows? Probably not.

    But if tough times were to require it, I’ve got two extra bedrooms and a basement I can rent out and no one can tell me that violates my lease.

    So, “do what works for you” is still the NUMBER ONE thing to remember when you’re considering buying a home. And if and when you do, I hope it makes you HAPPY above all else.

    • Bill Penn

      The intangible of happiness often supercedes the calculations. I’ve been renting since losing my home in the financial crisis. I plan to buy again even though I’m nearly 65. My new career provides the means to buy where I feel happiest, even as others say “that’s much too expensive” and “at your age?” When I can stand in my amazing living room and look out over snow capped mountains and a lake I saw in a dream, the sacrifice will be worth it. I don’t expect allies on this forum. Most people I know think I’m nuts anyway.

  11. Your bottom line is correct. You have to do your own analysis. Anyone can run the numbers, but only you know your preferences and how much you are willing to pay for them. For me, finally buying a house was the sweetest freedom.

  12. Mark Spidell

    When you take a very qualitative concept like home ownership and mix it with a very quantitative concept like real estate investing you will get a lot of different opinions. As investors and homeowners we know that the experience of living in certain areas varies drastically. In some “better areas” there are not a lot of rental options. Atleast not subjectively “good” rental options.

    How much are these qualitative homeownership considerations worth if it means living in a better area?
    Living near a good school
    Makes spouse happy
    Closer to recreation
    Shorter commute

    From a personal finance perspective, a high overhead primary residence should always be viewed as a luxury. I am not sure if I agree with $20 million in cash as the best way of saying it, but certainly a strong argument can be made for not having a lot of excess house if you have a net worth under say $2 million.

    I live near some pretty amazing trophy properties. The range of costly amenities can be very wide from just having a bit more house than you really need all the way up to your own private stable filled with polo quality horses and your own helipad with copter! The sky is the limit.

    I think the biggest point that Grant (and a lot of others) is trying to make is to put yourself in the best position to take risks so you can create your best life possible. I wrote a blog along this theme:

    Home ownership certainly can become a trap for a lot of people as it is easy to become stuck in the unhappy W2 rut with the root cause being lifestyle creep.

    PS…props to @Ben Leybovich for starting off his comment with “Listen, good looking…” I guess he can say that kind of stuff because he is always wearing that dark suit.

    • I think Brandon’s number 1 reason (it depends on where you live) hits the nail on the head. Obviously, if you can purchase a home in your desired location for a monthly outlay that is much less than renting a comparable property- yes, you probably want to take that deal. I would argue that buying a multi family would be a better financial decision…..but I digress…The fact is, buying a home for less than the cost of rent is not a possibility for many of us. In my area, my wife and I rent a nice apartment in a prime location for about $1100 total after all is said and done. The cheapest comparable home we could buy in our area would likely cost from $1800-$2000 per month after a 5% down payment on a conventional loan. This number also takes into account property taxes and insurance. Also would have to consider the increase monthly cost in maintenance, utilities, cap x, etc………So for us, yes, it makes sense to continue renting for now.

      In our case, buying a home limits the ability to save money for future investments in real estate that could potentially offer cash flow and true long term wealth. I would strongly encourage people to analyze THEIR income vs. THEIR rental market vs. THEIR market if they were to buy. If you think there’s a good chance you’ll be able to save about the same amount of money as you otherwise would renting, go for the buy. But a word of caution, you MUST consider ALL of the variables that come with home ownership before making this decision-and it’s a long list, so take your time. If buying a home places a strain on your finances and doesn’t allow you to save for any future endeavors, STAY AWAY. I think this is the main point Grant Cardone is trying to get across. If you’re serious about investing, it makes zero sense to put yourself in a position where you are strained and can’t save enough money for future investments.

      To Brandon’s point about freedom: Yes, the landlord can raise the rent, force me to move out, and not allow me to paint. But on the flip side- if I don’t own the joint, I don’t have a to worry about the plumbing, electrical, roof, and all sorts of other issues. And when you own a home, your mortgage is not fixed. Property taxes and insurance can increase your mortgage on a yearly basis and could feel just like a hike in your rent…

      The bottom line: Always analyze information carefully and cater it to your specific situation. Don’t use blanket statements to justify your decisions. It HAS to make sense for your market, your lifestyle, your desires, and your ultimate goals.



      • Bill Briscoe

        “And when you own a home, your mortgage is not fixed. Property taxes and insurance can increase your mortgage on a yearly basis and could feel just like a hike in your rent…’

        Possibly true, but a mortgage (the principle and interest part) does go away after 15 or 20 years while rent just keeps going up. Landlord is never going to thank you for paying off his mortgage by giving you free rent.

        Long term thinking…

    • Bill Briscoe

      “When you take a very qualitative concept like home ownership and mix it with a very quantitative concept like real estate investing you will get a lot of different opinions.”

      Which is why you shouldn’t mix the two concepts. Its a common decision making and decision support fallacy.
      “How much are these qualitative homeownership considerations worth if it means living in a better area?
      Living near a good school
      Makes spouse happy
      Closer to recreation
      Shorter commute”

      These are all things that can potentially be bought OR rented. But as you noted, renting them can be difficult or expensive. If these are “needs”, then your situation likely favors owning.

      In my Real Estate Finance courses I always stress that the rent vs buy decision should be reduced to a financial one. First decide what type of dwelling you need/want to live in, then compare the cost to rent or to buy the SAME or virtually the same house (or apt/condo, or trailer or whatever).

      You can’t financially compare renting grandma’s garage to buying a 5 bedroom home. That’s a needs/wants decision, not a financial one. (And there are probably some garages in my county that could be purchased for less than 1 month’s average salary, saving the garage dweller the monthly rental in perpetuity).

      But once you reduce the decision to strictly a financial one, all other factors being more/less equal, the equation usually becomes one of time. How many years must you remain in the owned home for the monthly cashflow savings – assuming (PITI+Maintenance-tax savings) <( Rent+Renters Insurance) – to cover the entry and exit costs and to earn an acceptable ROI on your down-payment.

      "Acceptable" can vary from person to person, but assuming good credit, low interest rates, slight appreciation/inflation, and the common price to rent ratios in my area, a 8-10% ROI (annualized) can be turned in a surprisingly short time, and higher ROIs from longer occupancies.

  13. David Goossens

    I know quite a few people in The Bay Area that are glad they bought houses in the 1990’s. The appreciation has made them millionaires. They are now cashing out and moving out of state. Like anything in REI, the anwser is usually “it depends…”

      • I am repeating it. I bought a second house near the beach in LA in 2012 using some of the equity I got in the Bay Area and THAT house has already appreciated $500K and will no doubt be another million dollar winner for me. No it’s not luck. It’s knowing the right areas and it’s not that hard.

        • Katie Rogers

          In 2012, you bought at LA’s market “bottom.” Housing didn’t “crash” in 2006. The sick fever broke. The coastal market prices never stabilized at a healthy price. Instead the sick fever is relapsing. Foreign buyers are at it again, creating comparable sales that completely misrepresent the value relative to other much more reliable metrics.

          Paper appreciation is nothing. Real estate agents persuaded a lot of buyers to take out ARM on their expert opinion that appreciation would save the homebuyer. We already saw what happened. If you think you can realize that $500K, you maybe should sell.

          In my community, sellers routinely overprice their houses by 20%. Their agents play statistical games, delisting and relisting the property until the house attracts buyers. Then they boast that sell prices are within 2% of list price, but what they really mean is that sale prices are within 2% of LAST list price.

  14. walker seid

    Besides cap ex your house must appreciate 10% more for selling fees. If you live in it for 10 years and pay 5k in taxes per year it also has to appreciate 50k to break even. Its really only a good idea to buy if you are going to rent it out within a couple years of buying (passing on the expenses to the tenant) or if your good with owning a liability.

  15. Christopher Smith

    People don’t typically buy a home as an “investment” in the strict financial sense. They buy a home so they can establish themselves in an area where they want to live in a property that they can specifically tailor to their own hearts desire. That’s pretty hard to duplicate with a rental property, no matter how much you are willing to pay.

    I own several rental properties and have made a whole lot of money with them, but I also own a home. I bought them all at an incredibly fortunate time so I will make money on the home as well as the rentals (the home is already 2X in value from what it was 5 years ago when I bought it). However, I wouldn’t even care if I didn’t make money on the home as long as the “total” value I derived from it made it worthwhile, and I think for most folks that is the case.

    So is investing in a home the best way to maximize your financial balance sheet – no its not – but that’s not the goal for most folks, its the quality of lifestyle, family, friends and some meaningful value at the end that are at least at to some degree is unique to home ownership.

  16. Adrian Stamer

    Record low interest rates, deductible taxes and interest, stability, comfort, appreciation, HELOCs to mention a few reasons…

    But really the whole internet game is say something provactive so it goes viral and people write articles and comments etc giving you free press.

    Life is all about balance, saying wait until you have $20 million is the bank to purchase a house is an absolutely ridiculous statement. I’m assuming he didn’t even go out to eat until he had $2 million in the bank?

  17. Richard Warner

    Cardone is a fantastic mentor. He teaches and promotes people to become wealthy beyond their own belief and has a net worth we can all respect, coming from nothing. The only reason people don’t like him is because they don’t understand the information.
    No offense to Brandon, I like him! But I’m also not going to take political advice from a teenager.

  18. David Krulac

    Great Article, Brandon.
    1. It depends where you live. While in some places its a lot cheaper to own than rent, especially with rent increasing faster than prices, on the other hand the places where rents are low in relation to value, like San Francisco & Manhattan is where lots of people want to be and prices keep escalating. Areas where prices are escalating is not necessarily a bad area.
    2. Owning a house does make you immobile in a sense, sure you could turn it into a rental if you want to leave the are, or you could AirBNB it. But it is easier to move out of a rental, especially if market conditions turn bad. Try selling a house in 1981 or 2008, its not so easy.
    3. Is Real Estate a bad investment? After buying and selling 900 properties, I’d have to say NO. sorry, Grant. But I don’t rely on data from Case Schiller either. The CS studies are based on average house purchased at average prices by average people. Real estate investors, especially people at BP are not average. the successful real estate investors are way ABOVE average and are buying the best deals, not average or less than average deals. There is a big difference between Joe& Jill home buyer and Ray & Rose Real Estate investors; the latter are getting the best deals that are not shown in CS data reports.
    4. Nobody will force you out of your owned house. For the most part yes, but then there is Sheriff Sale, Tax Sale, Eminent Domain, even Adverse Possession all of which can force you out of your own house without your concurrence.

    • steve portock

      I am loving the responses, but all of you who argue against Cardone, are making his argument. Let’s get a few things out I think we can agree on. Cardone to me is making the point that the home you own is not a good investment, he is correct on that, and even further, you don’t actually “own” your home ever. Try not paying your property taxes or whatever other nonsense the criminal gangsta’s know at gov’t come up with, you will see what you “own”. To the rest of us here doing this to make money, as long as you buy for x, and sell for higher y, and profit after costs, of course its a good thing to do. Cardone is all about making money, owning your own home is not about that, its nothing more than an emotional money losing purchase that the majority of people will do, myself included. I have owned homes before, even tried to buy them to fix them up, I never got a good deal because I had to deal with a spouse who got emotional about it, once that happens, you are done. Even in the best of cases, we barely broke even on them. People put too much stock in a home by deluding themselves into thinking its more than what it is, a place to eat, sleep, hang out and do whatever. Its just a box, nothing magical about it. I rent for now, given my situation its the best deal for me, owning would only cost more and I don’t feel like shelling out more $$$ just to address an emotion. Up against ordinary people who own homes, I still have more $$$ at the end of the day. I am not comparing myself to investors, thats a completely different thing. Brandon could have done better on this, its not his best writing, but so what, he is a nice guy and I still enjoy what he does.

  19. Tyler Oxley

    Brandon- as a fellow Washingtonian, I’d like you to show me 75k houses that rent for 1k. My inability to find such deals anywhere here, has taken my investment focus out of state…
    The primary reason to buy a home is to stabilize your cost basis for housing. Buy a house now and you’ll never see a rent increase. In 20 years it will be nice to still be making the same payment you did in year in 1. Of course, property taxes will raise your overall cost, as will upkeep. Some homes are easier/cheaper to maintain than others and this needs to be a factor going in. You’ll never get the emotion out of it. I personally have have rentals AND rent my current home. For me it works.
    All said, most people do not have an investor mindset or want to be a landlord. I’ve known a number of “accidental” landlords that couldn’t wait to be out of it despite some really good positive cash-flow. Probability is that the average person moves every 3-4 years (due to job relocations or other considerations) Until they settle down for a long duration, probably in their 30’s – owning a home is a very bad idea.

  20. Lee S.

    classic, couldn’t have said it better myself. I didn’t know he was a Scientologist but that definitely removes any and all credibility. However, the only difference between Scientology and every other religion is it hasn’t had ample time to brain wash the masses so it’s more easily viewed as crazy when in fact all religions are equal. I’m sure I just offended 90% of you since we are only allowed to preach our favorite religion in public, not mock all of them.

  21. Jerry Kisasonak

    I saved up money and bought my house cash 10 years ago. My upkeep including taxes, insurance etc is literally few thousand dollars a year. I couldn’t imagine paying $10,000/yr in rent (our local average) with no end in sight and zero return on that money. 100% of it goes right out the window. I could live here with my family for another 50 years and our expenses will be very minimal, which allows us the freedom to spend our income however we want, or just save and invest and further grow our businesses.

    I don’t look at our personal residence as an investment. Of course, as a stand-alone item on an income statement, a personal resident doesn’t look good because it’s losing money versus producing it – it’s not an asset because it doesn’t put money in your pocket every month. However, on my balance sheet it does show up as equity/net worth. And sure, I could refinance and take that cash (dead equity) out to invest in other income-producing ventures. But I won’t. I don’t need to, so why would I?

    As far as Grant Cardone, I’m not really concerned if he thinks I’m being a fool or not. If he wants to “stay mobile” and vagabond around the country for the sake of having more money, that’s his monkey and his circus.

  22. Frankie Woods

    Brandon, great article as always. My only qualm is the appreciation agreement. Remember, if you live in the home and have a mortgage, your interest rate on the loan is generally higher than the 3% inflation rate. Hence, as a primary, your ROI will generally not be better than the stock market. The real advantage comes when you move and have some else pay your mortgage payments for you.

    To Ben’s point, your house is not a liability if you buy right and don’t do extravagant upgrades. People on BP should understand how to buy, so their property should have equity from the beginning. Given homes increase in value, this by definition IS an asset. Further, if your forced to move unexpectedly, simply rent and repeat.

  23. My problem with these post lat mainly on the headlines. Last week the post was why it’s better to rent than to own (or something to that sense) now it’s you should own your own home. With all theset headlines ando rapid pase of content, the actual messages get lost in the shear number of post.
    I love bIngersoll pockets and always recommend them to anyone interested in real estate. However, education seems to be pushed to the side for the fact of mere content. Something like this should be broken into “where it makes sense to own a home or rent if you are or want to be an inspiring investor”.
    Just my 2 cents.

  24. Jerome Kaidor

    I am too ignorant to expound on the general principles. But I can say that home ownership worked for me. First, it taught me about house construction and repair. Our first house came with an illegal addition, and we converted it to a legal one – with a permit. Basically, we demolished everything but the roof, and built a new addition under the old roof. We dug the foundation, built the floor, built the walls etc. We only wimped out on two things: the plumbing – those DWV rules are complex! – and the roofing ( Jerry don’t mess with hot tar ).

    Later, our second house – also a mechanics special – gave us equity to help buy a 52-unit apartment complex.

    I can honestly say that owning our own home was the first step toward having our current 73 units.

  25. Timothy Foster

    Vacancy factor and management fees, when you own a home is near zero.
    Likelihood of being sued also dramatically reduced.
    Yeah if you buy the return isn’t great, but if you rent the return is negative! 100% of rent goes to someone else …

    Buying isn’t the Offensive move of a lifetime, it’s a defensive move. If you truly want to get far you NEED to play defence! A good book on this is The Millionaire Next Door.

  26. John N.

    Novice investor here, one rental SFH and a few tracts of land I am trying to figure out what to do with. It appears to me that an entire facet of owning your residence is being over looked here. I have read every single comment here and there are compelling arguments in both directions but the simple fact is, what’s right for one investor might be just the opposite for another.

    In my case, I know absolutely that I am not going to be moving anywhere. Mostly because I don’t want to . I spent 20 years in the military and now that I have put down roots you could not pry me away. For myself and many other like me, renting is simply not doable. Since I have purchased my house I have built three out-buildings for various uses, two pole barns to store various boats and toys. I have planted 8-10 citrus trees that bring me lots of yummy joy, walking gardens and food gardens. We also have three massive fur babies who share our home, also not possible with a rental. My wife and I have created a wonderful sanctuary that simply makes us happy to be at home.

    In about 5 years it will be free of a mortgage and will allow us to dabble more in rentals as well as allow us to continue to enjoy our life style. You can quantify the money you make or lose with your primary residence but you cannot quantify walking into your own backyard and feeling happy simply because you are home. Our home isn’t an investment, our rental and our land are investments. Our home is our sanctuary.

    If a rental is right for you, go for it. If you want to break down how owning a home might end up costing you in the end go for it. To simply and arbitrarily state that home ownership is a mistake is inaccurate, arrogant, presumptuous and in my mind is a good indicator a narrow mindedness to the point of willful ignorance.

  27. Shawn Hugh

    I love the statement, from Brandon Turner, “All these facts add up to why you shouldn’t take blanket advice from the internet when you make your decisions.” I have read both articles both ways, I have become more educated to make my decisions.
    Life is a learning process and just because my prescription glasses work for my, doesn’t mean that it will work for you… thank you for opening my eyes and taking a +/- stance on this issue… I have learned from both sides…
    BTW… I Flip houses and invest in Commercial and apartment, and own my own successful Martial Arts business since 2008… so thank you to all that have commented I have read most every comment and hope to be as/if not more wealthy monetarily as all of you… (spiritually and job wise I’m set).
    May your future be bright.
    -Shawn Hugh

  28. Bart H.

    I hear this all the time…’If it takes money out of your pocket, its a liability and not an asset.’ Yea yea yea, so my question is this… If I buy groceries at the the supermarket, I guess its a liability since it takes money out of my pocket, but a brother has to eat right? I purchased clothes, so its a liability, but a brother has to have clothing right?

    Almost anything can be a liability or an asset. Its what you do with it. My vehicle, normally a liability, can be made an asset if I use it on Uber to transport people around town. You see, you can turn a liability into an asset. Don’t be single minded, use your brain. Its call common sense. If buying a house is cheaper, buy the house. If renting is cheaper, then rent. Whatever you can fit into your lifestyle and it isn’t a burden, go for it.

      • Katie Rogers

        It pretty typical that the proceeds may put all that money back in your pocket, and you might even have an apparent realized gain, but when you look at the annualized rate of return and then subtract the rate of inflation, you may end up with a wash.

    • Jerry Kisasonak

      Good points Bart! I also get tired of hearing the “asset/liability” definition (although I mentioned it in my comment!). But your point is well taken. If someone calls a car a liability, you have to consider how your life would look if you didn’t have a car. I think all of us use our vehicles to go out into the world and do things that brings money in, so in that regard a vehicle is an asset. It’s not as cut and dry as people make it seem.

      • Katie Rogers

        “Asset” and “liability” are merely technical financial terms that describes which way money is flowing. These terms should not be confused or conflated with other considerations that also factor in the decision-making process.

  29. If it’s a “wash”, then you actually did very well, because you saved all the money you would have paid for rent. Where I lived for almost 20 years, rent averaged $2500/mo. So I saved $600K. If that’s a “wash”, I’ll take it.

  30. Dan Clark

    Getting married is for suckers! The optimal situation for opportunity and financial success is flexibility & mobility! Why would I tie myself down to one woman when I could just rent one for a night every time the need arose? Isn’t that going to save me (a TON of) money in the long-run? Wives are expensive, after all! Love, you say? HA! I’ll just get a dog!… I need to continue???

    You see, lots of things in life may not “make sense” if you run the numbers (having kids would make you a brain-dead imbecile!). But life isn’t strictly about numbers. The things that make life worthwhile almost never pass the numbers test. And while I remain unconvinced that most of my real estate purchases have been foolish, when it comes to my personal residence, it’s a moot point. I own a home because it makes me feel good to own it. It makes me feel like a solid part of my neighborhood, and my community. I feel like something is mine (and it DOESN’T MATTER if my local municipality could take it if I didn’t pay my taxes. My personal satisfaction and happiness is what matters).

    You’re an idiot to own a home! You’re an idiot to own a dream sports/luxury/etc car when a compact beater will get you there just the same! You’re an idiot to take that expensive, bucket-list vacation! …to have kids! …to get married! …to give to charity!…

    Seems like you’d be an idiot for doing just about anything that actually involves having a life..

  31. Do you really think buying a house is comparable to buying an expensive car or taking an extravagant vacation?

    I sure don’t. Buying a house is one of the smartest financial moves a person with limited means can make. You are taking your biggest expense, housing and turning it into an investment.

  32. Andrew Syrios

    It definitely depends on where you live. Out here in the midwest, it’s basically cheaper to own than rent. And there are very good, high LTV loans for homeowners. So I think here, it definitely makes sense to buy. In New York… maybe not.

  33. That’s really interesting that your mortgage is about $500 but a similar home rented would be $1000. I guess it can be cheaper to buy. I’ll have to look at properties in my area since my apartment is pretty expensive anyways.

  34. Len Grosso

    Is it too simplistic to consider your costs 5, 10, 15 years down the road? What will the rent be then Vs your mortgage & asset value? That doesn’t even consider the value of the real estate tax benefits.
    The only that GC makes sense to me is to rent cheap and invest the savings in rental real estate.

  35. Vinit N.

    Good Article Brandon!!

    However I believe you have it backwards for big cities like NYC, SFO etc.

    Currently Price/Rent ratio is 40x in NYC. Meaning, if you are renting a place for $4K/month, it will cost you $2MM ($4K/month *12 = $50K per year * 40 = $2MM) to buy the same place. IMO it is better to rent currently and invest the difference in a suburban place where the Price/Rent is 15x or lower.


  36. Eva Mahoney

    Hey Greg. You obviously know nothing about Scientology as you use false information dredged up from disreputable internet sources to try to defame a successful businessman. Your comments also constitute bigotry and I have reported them as such. Bigger Pockets should be a place where people can talk about improving their lives through real estate in a respectful manner. I’m surprised your comment hasn’t been taken down already.

  37. Buying a house was the best investment I have ever made. I put $25K down, paid less than I would have in rent and sold for a million dollar profit. What’s more even after I sold the house went up another $700K in the following 5 years.

  38. Scotty Ball

    Great post! I love Uncle G but happen to agree with Brandon on the home ownership concept at this point in my life based on factors not all tied to the dollar. Thankful that such a great forum exists for those who love real estate!

  39. Chris Merrill

    You can’t pull a HELOC out of the house you are renting to buy your first investment property! End of discussion for me. It would have taken me much, much longer to save the same amount of cash if I had been renting. HELOCs on a primary are such a great tool to fund investing in RE, not to mention the “rent it down the road” aspect.

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