Buying vs Renting A Home - Dave Ramsey Rant
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Buying a home is already a very difficult thing to do, unless you pay cash or donât get a loan from the government. If only my minimum monthly house payment, over the course of 30 years Iâll pay more than double what my home is worth. I purchased before things got crazy so I got a good interest rate. I couldnât imagine trying to rent or buy right now.
I hope to own a home some day, not quite long I started investing. I'm very curious already and need help on how to enhance and increase my returns. Any good investment tips will be appreciated.
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Everytime I spend money I can see and hear Dave Ramsey sighing in disappointment. đ©
đđđ
@@solid-data8826 That's a little unfair and an kind of inaccurate. He has said repeatedly on his show that it's about ratios. If you make a lot of money, or have a lot of money already, then he doesn't care if you spend it or not. He just advises people to live within their means. Borrowing money to maintain a lifestyle you can't afford is stupid, and Dave knows this. Dave said he has a friend worth over 1 billion dollars, and bought a car worth more than 400K. Dave said it's fine because it's like regular folks like us buying a biscuit.
I don't spend anymore. I cut off doing my nails, I stopped spending on hair items, going out to eat, etc...
Ice Ryda who cares, gotta enjoy life while you have it. Saving every dime you have wonât allow you to enjoy your life a whole lot.
Bruh me to đđ
7:36
"I want you to own your house - I don't want it to own you."
you prolly dont care but does any of you know a method to get back into an Instagram account..?
I was dumb forgot my password. I would appreciate any assistance you can offer me
I bought a house after the rent in my 2 bedroom apartment went up to 1700 a month not including utilities. My mortgage on my 4 bedroom house with garage and a yard with taxes and insurance is 1100. That 600 a month Iâve saved has updated and repaired almost everything in my home.
I have a similar situation.
Sounds like Dave wants more renters out there to potentially rent one of his properties..lol
Out of interest, what is the term of your mortgage? Is it fixed or variable? How has your situation changed as interest rates have risen? Asking to get a better understanding, thank you âșïž
Now with falling prices and recession your house will be worth a lot less and you will be upside down on your mortgage.
@@m.b5777 we have a fortune teller!! do me next
I've never seen rent go down...
Yep! NEVER! It only keeps going up! And you pay ALL that money out and own NOTHING.
Because they dont. House paid for never have to worry about a rent payment or mortgage payment...its quite nice.
I agree with everyone here......rent never, ever goes down, only increases. If you are determined to be totally disciplined and are willing to sacrifice those small luxuries...live frugally for a few years, buy a modest home, live rent free and in time you will reap and never regret the sacrifice you made thru those few years. Rent will kill you..you have nothing in the end.
Mark G Donât pay property taxes and see if the county comes for your home.
Rents went down circa 2008-2012. Been a renter since 2002! you need to shop around and sometimes need to move to get a better deal. The landlord knows when you are too lazy to move out to get a cheaper rent.
Dave, I THOUGHT I was ready to buy a house. I was pre-approved and had some money for a 5% down payment on an FHA. I talked with the lender about monthly payments and kept telling everyone I needed solid numbers and details about the loan. It was surprising how much run around I got. Iâm so glad that I found you months ago and started actually taking your advice. If I hadnât Iâd literally be paying HALF of my monthly income on the house I wanted. As a single dad of two, I make a decent amount of money, but making that choice would have been extremely irresponsible at this point.
I bought my house and they told me my Mortgage was going to be $2,500 in Miami I didnât like that number at all. So when I close the first year my Mortgage was $1,725 and the next year when they evaluated the taxes my Mortgage went up to $2,084
I can work with that
u would of started of with low mortgage at 1st? then go up?
If You Donât Mind Me Asking Sir, What Kind Of Job Dp You Have?
Wow you're not 60 yet?
If you can buy a home with a 5% downpayment, buy it tomorrow!
If you don't, many will and the price will go up.
So basically, owning is always better than renting, so long as you can afford it initially.
Nick DipaoloFan renting is equivalent to buying a 200 dollar car with cheap repair costs. Itâs only temporary
No, not really. Go look at a place that you might buy and calculate the following over the course of a year: 1. Interest costs, 2. taxes, 3. 1/2 to 1% total home value for maintenance, condo fees (if any), then divide by 12. If the figure is higher than what you'd pay in rent, then you should rent. If it's not, then check to see how much property value in your area is likely to grow over the next while. If a lot consider buying, if not see if you'd be better off renting and investing any extra money in stocks, etc.
I canât think of a house mortgage thatâs under a 1000 dollars a month
@@christinab.2864 You have to separate out the equity from the mortgage to get the number you compare with rent.
@@Hyperpandas thatâs sucks unless you used the bank loan for the house mortgage which sounds like what youâre saying
Been paying rent for 7 years... itâs never gone down. not once.
If it stays the same, that's down. Mine has.
Right. Been doing it for 12 years and I'm finally at a place financially where I can afford a home and currently searching for a now.
Mortal Dao so by that logic your payments for owning a house are decreasing also? đ€ stop it if youâre paying 1500 for rent and 800 to own, Dave knows how to do math. Stop blindly listening to stuff. Even factoring in the negatives of owning, you are on the process of OWNING! You can get served an eviction notice for anything and be out of thousands of dollars. Dave is amazing. Please do a little research before you believe anything
I agree with Dave, if you are not ready donât buy, wait until you are ready to buy then buy. When I bought my house 15 years ago my monthly payments were about 20% more than renting a similar property in my area. 15 years later I have paid 50% off of the mortgage price & (apart from corana19 adjustments) is now worth about a third more than what I paid for it & to rent a similar property in my area is now about 15% more than my mortgage payments & rising.
Yeah if rent isnât going up then effectively itâs decreasing by 2% per year. This is also assuming youâre getting your annual 2% raise to keep up. The difference with a mortgage is that A) youâre earning equity in the home, B) YOU see the appreciations in the value of your home, not your renters. Short term, rent is always more flexible and less risky, but long term ownership is always better. Always
Smartest thing I ever did was save, save, save, save and I bought my first house with a 50k down payment at 26 years old. Thank you God and my parents for helping me do this :)
That is smart. Congratulations!
I wish when I'm 26 (4 years from now) I could buy a house just like you do. You inspire me and give me hope. Thanks!
caligal2010 you are blessed
Have you almost paid it off?
@@richardsanchez9190 no not even close lol. But my house is worth is $280k and the loan is $165k, so I'm planning on selling it within the next year for a hefty profit
@@caligal2010 nice. Congrats. 165K that's cheap. What state did you buy and when?
Family has been pressuring to to buy a house and I know that I am not ready and this just proves my point. Even though I know they have the best intentions. I know what is right for me. Thanks Dave !!!
Elizabethâs Journey2.0 ugh I feel you, plus they think itâs so easy like it was for them
I think most arent rushing into homeownership but I think the stats say otherwise
Don't listen to them because they're not going to pay for anything. Wait until your ready
Yep do what you want cause at the end of the day they arenât gonna pay any of your bills if they are to much for you.
I bought a home, and then eventually lost it in the big meltdown years ago, and now own another home đ
Biggest problem when buying a house is how do you know your job will keep you there 15/30 years . You might lose your job and have to flip burgers . Renting will cost you bit extra but you always free to go for job hunting in different area or even other states when your city have no jobs
U can sell your house and get a good amount of the money back
I love when Papa Dave's southern accent comes out. That's when you know its real lol
@M Detlef .. Incorrect. He is a Tennessean .. Get a grip. Don't be sad. Dave is Southern. Not a yankee. đ
M Detlef đ
@@fljetgator1833 Yankees are bettađŻ
@@HoweyJR_ .. đ€ ah fugettaboutit
@@fljetgator1833 lol just talkn ish bro
I think both have their pros and cons. Renting has more flexibility with the job security nowadays. While owning gives you more privacy. Just buy what you can afford or even less.
But if you loose your job, there are a couple of people like Airline Pilots that literally might move anywhere in the country for a job. If you are an Accountant in LA are you really going to move to NY or find another Accounting job in LA.
i have privacy rentin.
@@jonhennemann4729 if you lose your job how are you gonna pay rent?? This argument has holes in it. At least if I can't pay my mortgage my lender will work with me where as most landlords will have you out on the street immediately and find a new renter. Also, if needed, I could sell my house and bank the equity if it came down to it. Way more options by owning
How would owning give you more privacy? Itâs not like your landlord lives with you when you rent đđđ
@@adubber97 There are typically other tenants in a rental house/building. In one apartment I had, the old woman lived below me and totally made tenants feel watched/afraid to live in their own units.
I worked with a guy who lived in the same house for 20 years and rented it the entire time. He made a good living and his wife was a nurse who also made good money. When I asked why he rented, he told me that renting freed up money. He had already purchased and paid off a retirement property. Since the property was by a lake, they used it as a summer house while they were still working. He said he wouldn't have been able to do that if he had to pay 10K for a roof repair like his landlord did two months earlier.
so for 20 years he didn't gain any equity, how smart
@@alexandersummerville5003 but his other investments ballooned
@@m.b5777 he could have ballooned his other investments and his house if he owned it lol.
He lucked up by renting in a property where the landlord didnt sell the house causing he and his wife to have to move out and start over again in a new home. Thats my current situation and its very stressful.đą
Pray for me I'm just starting to save for my future home.
You will be fine believe me .. I bought my house at 51 age .... and I regrets donât buy it 20 years ago ... all my life paying rent for nothing
@@watchmanexpert
I bought in my 40s. But it is not accurate to say that the rent went for nothing.
Some people enjoy renting some enjoy buying a home. I prefer renting, I have plenty of space all amenities, huge balcony, fireplace, W/D. No debt. I like the idea of moving if I want to and not having to worry about repairs, maintenance. I also think owning a home is awesome if that fits you. Namaste đđżđ
I agree but I also donât know why people expect him to say anything different than buy a home. Guys a realtor!?
Hello India Simone, I hope you are having a great day. I read your comment and as far as "No debt" I believe you do, you just will never see a return on the rent you pay monthly. Your monthly rent is your debt. Like he mentioned you are paying the landlords debt and he is the only one getting the monetary benefit. You on the other hand unfortunately will never see those benefits.
@@feliprea5504 having somewhere to live is a return on your money. It may not build wealth like owning, but renting certainly has purpose and can be right for some situations.
@@jeremyncrm2012 Hello Fenix, wow I was about to say the same thingđŻ.
@@feliprea5504 Hello Felipe Rea, yes I'm having a great day, I hope you are as well, as Fenix mentioned and I absolutely agree, I am seeing the benefits of my rent by having a safe healthy place to live, I could care less how much money the owner of my apartment has, no matter the type of living arrangements, no place to live is free, I enjoy renting and not being cash poor and that works for me, just like owning works for others.
I love how Dave continually talks about subjects he's touched on. Its nice to be reminded of them, hear them again, and hear his updated opinion.
You can if your looking a few years ahead. I bought our house for $90k in 2014, my house payment with taxes and everything is $720 a month. Our rent at the time was $850 and now at the exact same apartment complex it is $1500. I'm am so freaking thankful that we bought our house because theres no way we would have any kind of future paying $1500 a month.
That is the upside, you lock in about 80% of your monthly cost. (excluding maintenance costs )
The only thing that's hard is the down payment, well actually where I live a 1 bedroom cost 300k. So mortgage plus everything cost 2k, and my rent cost 1.2k
see what im saying does he not factor in the price of rent?? it's $1800 now in California
Iâd much rather be broke paying my own mortgage than being broke paying someone else mortgage.
Interest is lost forever just like rent
In the end, the house will be yours
@@mrs.demetrialewis2730not if you donât pay your property taxes
I have a rental property. It costs me a mortgage of $715, but it currently rents out for $1,150 with nothing included. Starting in August the new rent will be $1,200 with nothing included. My property is 4 houses from the University campus. It will always be a hot commodity because people donât want to drive to class, pay for a parking pass, etc. I also rent to adults because it is right next to the highway to get to work quick. Iâve been renting this house since 2011. Never had an issue renting it out. Iâve spent about $2,000 in repairs, but Iâve collected nearly $100,000 in rent and paid roughly $72,000 in mortgage including taxes and insurance. $100,000 - $74,000 = $26,000. Not too bad. I plan on selling it when my kid is about 16/17 and using all that equity for his college. That will be in about 10-11 years.
elmagnificodep are you paying off the house (the place you are renting)? If not, how long will it take you to pay it off.
sisteroftheagiel1 Iâm paying a mortgage. Iâve owned the house for over 10 years. It would be paid off in 2039. I put extra money on my house. I just bought a used $30,000 truck less than a year ago. Thanks renters.
U made 26000 and bought a 30000 truck? How did renters pay this? đ
aleks Seriously? I have a job too. đ€ŠđŒââïž
I understand... people donât take account to expenses that come into buying a home. $10k to fix a roof, $10k to change the furnace. Itâs a lot of money!!
Yeah, and the rent covers all of it. The landlord isn't running a charity.
Yeh we do. Then we see them treble value in a few short years.
I would take that deal all day long.đ
I think renting vs buying is ultimately a lifestyle choice. If you If you plan to move a lot, or if you don't want to bother with things like mowing the grass, then renting is probably better. If you want to settle down for a long time, and you need more space, then buying a house is probably best.
This is the BEST response I've seen on here. I totally agree! It all comes down to it being a "lifestyle" decision. Like you stated, not everyone wants the hassle of the maintenance. I'm more of a pick-up-and-go person. I don't want to deal with mowing grass, snow blowing my driveway, etc. I don't care if I own it. It just doesn't fit my lifestlye.
Condos have building maintenance
I just had to fix a roof and get a new hvac system in the same year. Dave is right.
Yep.. I've done those.. 6k ac and 5k roof.. people forget about that.. lol
But that could also be because you didnât look in the house deep enough before buying if you are smart about what you are buying it is a way better investment than renting an apartment
@@bassinoutdawg4515 That's definitely part of the problem. Since I've bought the house, at least I've learned a lot about what to expect next time I buy one.
Yeah but you shouldnât have to make either of those purchases again for another 20 years and they increase the value of your home should you decide to sell before then.
Well, that's not true, either.
It's easy to say you shouldn't have to buy a new roof within X years...until you get hit with a freaky, once-in-a-lifetime storm that damages your roof. Even newish roofs can sustain massive damage from storms like that.
If you have good homeowners' insurance, that will get covered. That's why it's important not to cheap out on that homeowners' cost.
Renting is good for short term, as dave recommends. If I don't have the down payment, nor the income and savings to back it up, I won't buy.
Rent cheap as possible near you, and set a plan to buy a house within your means, with a back up savings for any big issues that may arise with a house.
It's a pretty simple concept.
Not many people know that.
Only single people who live in the suburbs think that way. đ I wish it was that simple.. . . .
What's short term?
Or just don't buy period . rent cheap stay debt free and free up your money + invest
Bloodspiller777 one answer when your in debt
Only buy a home if you can AFFORD it (obviously) đ€·ââïžđ
Chris Invests so much insight. You should start a podcast!
Wow so deep đ You must have a PHD or something!
Even if it seems like a logical thing, people are stupid and naive enough to just jump into it just because everyone else has it. lol
People have slowly been trying to change the definition of what "afford" means lol. Been hearing lots of talk about how you only need 5% or 10% down now.
Ramdy Salimbacod you can say the same thing about renting an apartment
The minute something goes wrong in the house a renter calls the landlord. The minute a homeowner has a problem he/she can't fix they open their checkbook. We bought a house in our early 20s and have spent more on maintaining and fixing than we would have in rent. We just made a purchase more than our mortgage to fix a problem in just one room. Eventually it will pay off but we have been reduced to tears many times when something unexpected went wrong or we just felt stuck in a home that needed so many improvements.
Wait until you are truly ready to buy and be ready to pay twice your mortgage in maintenance and repair. If we had waited we would have chosen differently and be better prepared financially and emotionally for the challenges of home ownership. It has taken more than a decade for our home to move from more curse days to more blessing days. We will definitely not push our children into home ownership until they can accurately weigh the costs and benefits.
Eureka Hope Thank you for your wisdom
Thank you so much Eureka. You just gave me confirmation dont rush into buying home. Take your time doesn't matter what age or season of life your in. God blessâ€đ
well, it depends on the age of the home, buy an old home then get ready for having to fix it.... also you have to have a questioning attitude while viewing the home... such as asking the age of the roof, the age of the air conditioner are big ones
Uh If you got a proper home inspector they should be able to identify any issues that would turn into problems that cost more than your mortgage payment. You get what you pay for.
Any landlord who has been stayed in business is just adding those expenses to your rent every month. Every repair dave talks about, the landlord took into account when pricing rent. And in addition to all of the ownership costs, the landlord needs to make a return on the property, thus rent will always be higher than ownership
I bought my house exactly 2 years ago. I hate to think how much I wasted on rent over the years prior to that, but I know that I wasn't ready. Not only do you need to have a considerable down payment, but you need to have some money put away for repairs. About 6 months after I bought mine the water heater needed to be replaced, and that's an extra expense that would have broken me 10 years ago.
How much you were wasting on rent, huh? How much you paying in taxes on top of your mortgage now that you own?
@@xraceboyex did you consider that landlords add the property taxes into your rent?
@@xraceboyex yea but your mortgage is going into equity. At the end of 30 years of renting you have nothing and the end of 30 years of mortgage and taxes you own a home worth hundreds of thousands
Now youâre stuck in your investment
@@texastitan6567 yea but no one should be going to into renting for 30yrs. Iâd say renting is just a short term option before making a purchase
I remember 20 years back my dad got a house for 25k $300 a month now these prices are over 100k and $1500 a month
Mongol IIIX i remember 4 years ago when I put 20% down and got a mortgage for 1529/mo on a 15 fixed note. My neighbor did 3.5% down, 1500/mo on a 30 year note
300K In MD
My parents paid 68k back in 1996 the neighbors house just sold for 255k smh and then they ask me why I haven't bought a home yet as if 3/2's are still going for 70k
Mongol IIIX what was the income 20 years ago compared to what it is today. You canât compare.see what the average mortgage was 30 years or 40 years ago and your dad wouldâve thought that was cheaper.
Your dad made a lousy deal.
We bought our house in the 90s for around $93K. Our mortgage was less than $1000 per month, which was what a nicer apartment in our area cost, but none of them had nearly as many amenities within walking distance of our home. We had to refinance when my health went south, and now we pay less than $900 a month.
MINIMAL rent in our city is $1200/month.
And the house will be ours within a few years.
We're still ahead of what renters in our city will ever have.
Dave's house buying principles are very conservative but you can't really go wrong with them đđ€·ââïž
It is better be conservative than saying a late big sorry later.
Chris Invests i wouldnât say conservative I would say smart and common sense. Donât buy a home until youâre debt free with a fully funded emergency fund and a good down payment. And a 15 yr fixed mortgage where the payment is no more than 25% of your monthly take home pay. Anyone here who disagrees bought a home with lots of debt, little saved and a 30 yr with way too much house theyâre trying to justify it!
Chris Invests buy a rental property with all cash? Yeah good luck even saving up for one in addition to paying the mortgage on your primary residence within your lifetime. Dave is conservative to an unreasonably high degree.
It really only works in area that doesn't have a land shortage.
Lar M I trgjn.
Increase your income and decrease your spending to where buying or renting a home literally has no actual influence on your life.
Agreed!
Yo what?
The more we adapt and adjust our budget the more they push it.
Im a teacher.....i would love for you to tell the govt to increase my income. ..yeah its not that simple
Roxanne Santos Side hustle. EVERYONE should have at least one these days. Unfortunately, a fact of life.
Who else clicked because you saw rant and you like to hear Dave Ramsey rant?đââïž
I'm upset that he didn't yell bro đđ
Golden nuggets in Dave rants haha
Dave's rants are epic and I love them!
Actually, I clicked on it to read comments, because the word rant in the title is kind of a turn off.
And it applies to us because we wanna own a house some day.
Paid cash 47k in 2013, now worth $135k. Never had a mortgage payment and never will. đșđž
I had been chasing a 20% down for the past 12 years. Seems every time we sign another years lease with a rent raise, the prices of houses shoot up. This was in Southern California. We moved to Vancouver, Washington right before the pandemic. The cheaper rents let us save more. The price of a house that wasn't a fixer at the time in our new location was around 350K. Now they're 500K. I can never seem to get up to that 20% down Dave wants us to have. Other than that, we're debt free and have a 6 months savings.
Yep. Dave is wrong on this one.
what the benefits of getting that 20% down?? no mortgage insurance? fixed rates??
Love this! Dave has the right idea. Long term BUY! Rent is great for temporary situations until you can get into a proper situation to buy.
Never buy adjustable rate mortgages. They should be outlawed
Lugene Parker i got an amazing 2.25% 7 year ARM! But I didnât kid myself that the rate will stay flat at the end of 7 years. I will refi or pay off the property (havenât made up my mind yet).
@@raheelakhtar7 pay it off because the the new rate you'll get will be some rip off rate. That's why they give you so low rate on the first part of the loan. It is is called a "teaser" rate for a reason.
@@joshn2342323 simply refi with another institution
@@raheelakhtar7 If you can pay it off then pay it off. It will be a great investment. We don't regret doing that at all.
What is adjustable rate mortgages?
One of the happiest and proudest moments in my parents' lives was the day they moved into their new, fancy house that was on the fringe of what their income could support. One of the most devastating and humiliating moments for them was when they were forced to sell it less than 10 years later after one of them fell ill and couldn't work for a year, and they couldn't make the mortgage payments. I'd never seen my parents broken before until the day they had to move: the sadness on their faces is seared into my memory. If they'd just waited until they had a bigger down payment or gone with a more affordable house, I firmly believe they'd still own it. I'll never buy a house until I know I can genuinely afford it: the 1/4 net income rule is a good one.
Wow sorry to hear thatđ will keep your parents in our prayers
That happened to us. I've had a long battle with multiple health conditions, including cancer, and couldn't work anymore.
Know what we did?
TALKED TO OUR MORTGAGE LENDER, and they helped us refinance with terms that kept us in our house. We were ahead on our mortgage, so the refinancing merely took us to the 30 year term that we originally signed up for. It was worth it not to lose our home when disaster struck us. If I'm able to work again, we'll go right back to paying ahead on the mortgage. Right now, I can't, so paying ahead is tough for us, as anyone can imagine, but it's what we're shooting for.
Sorry to hear that. The house payment must have been significantly greater than rent payment. here in San Diego buying is about the same as renting.
Thanks for another RANT Dave!!! Always good to hear what you have to say on a topic!!!
Pretty clear most people who âownâ homes should be renting and many of those renting should continue renting unless you meet all the metrics Dave has repeatedly told us. I remain a poor saddled with debt and I will rent until I work through the baby steps. Pretty simple stuff guys.
Iâm all for renting if itâs significantly lower that owning, this allows you to save for a bigger down payment and emergency fund.
Very good advice!
I always have your livestream in the background while studying.
Hey, crazy seeing you here! Iâm listening when Iâm working a lot of times!
Not even close. Horrible advice unless youâre a landlord.
I dont get it, is it better to buy a house and pay it off within, lets say, 25 years or just rent an appartment?
@@robinvsdk Dave wants you to rent from him or his companies.
This is great advice. I needed this to decide whether I need to keep renting or buy. Thanks Dave!
I would have bought a home about 6 years but realized that would have the biggest mistake ever! I know rent can be high and and it goes no where but up. But you cannot just only think about the rent payment. Owning a home has so many additional expenses, insurance, roof leaks, refrigerator breaks, etc. And when that happens for me I call the property manager to fix it because that's part of my rent. It will be more of a benefit for me when I'm closer to retirement. Putting more than 20% down on a 15-year mortgage with a fixed rate and with mortgage payments no more than 1/4 of my income. Thanks Dave.
Economics don't balance anywhere near as fast as Ramsey would like you to believe. I moved to Nashville into an apartment (2 br/2ba, 1275 sq.ft. townhouse, no garage) costing $1050/mo. Within 3 years, the price was $1700/mo. I bought a townhouse condo (2 br,2.5 ba, 1405 sq.ft. with attached garage) with zero down for $1150/mo. Including interest, taxes and HOA.
Sounds like temporary/first-time buyer incentives. Adjustable interest rate? Taxes of course will fluctuate and HOA is the devil. TH's are a dime a dozen around Nashville and return on investment as good as a trailer.
Girlie Gamer what do you mean?
Most home buyers underestimate the amount needed for upkeep. If you add in a reasonable amount per month (1-3% of the value of the house per year) for repairs and maintenance of a house plus the work involved in yard care, insurance and property taxes, you often find it's much closer the current renting market.
I am staying in a rental house and build up my financial basket. I don't want to swim myself with housing loan debt paying interest 20 30 years.
Thank you Captain Dave for this eye opener đ
@@sunnyd4734 thank you for the insight. Definitely a good way of leading a better life staying rental.
This was a question that I was asking myself frequently!
I'm in SoCal and rent is essentially half of mortgage payments. No one can buy anymore.
The way I see it. Unless your house is paid in FULL, you're a Loan Owner. Banks forecloses , landlords evicts .
You can still make some money on a foreclosure though.
Yes! Agreed! Good one here
Hit the nail right on the head. Short term vs long term.
Capex is figured into your rental payment, but not your mortgage. As a prospective home owner, you need to factor in the cost of big ticket items into your cost of home ownership. For example, if the roof costs $5000 to replace and lasts 20 years, that's about $21 per month. Do the same for things like heating, air, fridge, water heater, etc. and then you can compare it to rent.
I am thinking of buying a van. It is basically 2 in 1 deal ... house and a car. Will save me a lot of money in the long run.
Its a great idea if you don't mind living like that! In a relationship though, it won't work
@@scotland369 If you find the right girl it will.
I am with you on this.
@@TheGreatGadfly Free, but still taking it out of my paycheck. đđđ
@@nightfury8440 If he finds the RIGHT girl she will understand. Love a man who is a good steward.
@1:03 the Bert & Ernie voice is hilarious!!
Thanks for the honest and authentic perspectives. People keep judging and shaming us for not wanting to buy a house right now. I tire of it. But the rental rates are always a mess too...IT'S JUST DEBT EITHER WAY!
If renting is creating debt for you, Wolfgang Amadeus, you need to find someone to pay you to compose a Requiem Mass.
Stayed in my apartment for 14 years. Rent went up every year until it doubled from it's initial cost. However, now buying a very cheap house my mortgage payment is going to be even higher than my rent ever was. To say nothing of maintenance cost, additional electric since it's a larger home and utilities like water that were included in my apartment rent.
I'm fortunate that I can afford the additional cost but there's no way it's the most affordable option. Buying a house is not affordable housing. A 1 bedroom apartment is affordable housing. Renting a room from someone is affordable housing.
Where you make it up is at retirement when you own the home.
Except for the fact that a lot of rental properties being built are freaking luxury rental properties at $3,000/ month
big city?
@@kellybrady7863 no lol. My husband just took a new job and 2 bedroom 1 bath townhomes near his job in the suburbs of Michigan are going for 2500 a month. We have 4 kids and we WANT to rent..
$1200 2/1/1 gated condo rental in Orlando. I'm working through my baby steps happily... Living less than your income is key
Exactly! There are few very rentals under $2000 and we live 30 min from the biggest city near us
I don't even live in a big city, and the closest big city is about 50 miles away, but the rents for a 2 bedroom apartment are still around 1800 and up!! Renting to me makes no sense if you are ready to own a home and have your career set, and you are making adequate income.
It costs 1400/month for mortgage on 2.5 acres where we pretty much have freedom, or we pay 1100 for 1/2 acre with quarterly checks and no freedom where we are paying someone else's mortgage with nothing to show for ourselves. Rent keeps going up each year too... I think it really just depends on the location as well as the person's intention.
Exactly. The big thing is if your income can afford it. I know for me the couple of "small" added costs of home ownership are not enough to mess up my budget. The ability to have a paid-off home in the long run is more worth it. Some people think it will be completely cheaper though, which isn't true.
I needed this. Thanks
The juxtaposition of Dave Ramsey going hard with light elevator music outro is golden
My rent just went up...owning a house sounds pretty good right now.
But you have no property taxes, no maintenance expenses, and no insurance to pay for.
@@AStanton1966 as a landlord I will say that is factored into the rent, a good practice is mortgage, taxes, insurance... for one year, divided by 12 and multiplied by 13 becomes the Minimum rental rate. The 13th month covers improvements and increases in expenses or months not rented out. I've done this for 7 years and can always rent it out at market value
Property taxes also go up.
A Stanton1966 yes he does... itâs all built into the rent.
@@chrisfarmer4397
Okay let's say that's true and then something that cost several grand happens to the house etc. All of this stuff has already been averaged out to 5% of the houses worth per year, on average to include property taxes.
Yes you will be making money, but we don't have to worry about that stuff especially if something happens to the home. That's not on us at that point but on you and that loss is quite devastating.
Thank for this video. I really needed this.
No he did not say âlil friendsâ đđ I love Dave Ramsey
100 percent agree. Homeownership isnât cheap
SL Life
Equity is always good vs apartment nothing and no investment RENT GOES UP!!!!
đ đ đ đ đ đ
SL Life yes! And home ownership is NOT for everyone
Iâm living check to check and just found you and a ton of what you say makes perfect sense to me and Iâm beginning to apply it to improve. We own our home, Paid for. Just poor spending habits and accumulating debt has knocked us back to step 1.
I moved out my 2 bd room apartment for $1100 and bought a new comstruction 4 bd rm house for $1100 mortgage. After 4 yrs my home value went up by 85k. I dont think I would of been able to save 85k while still paying for rent payment.
How much total interest will you be paying on your house by end of your mortgage payment. Multiply your house payment into 30 years and see how much you are paying for your house.
@@awaisus multiply the rent payment over 30 years with no asset. Who will have a higher net worth?
@@avalentine7045 add in maintenance, time spent fixing things, renovations, taxes, hoa, insurance...you still may he ahead but there are alot more variables to owning....
Huge part of being able to retire is having the mortgage paid off. If you get in a home at 30 years old and just do minimum payments for the 30 years it could really help set you up to retire at or around 60 and focus extra income on other investments all those years. Go talk to people who are in their mid 60s that still have a lot left on their mortgage and see what they have to say.
I dont think Dave Ramsey has been a renter in a long time...
Has Dave ever lowered his rent when the market "corrects?"
Never
@@Siferatu well capitalism is unique in that a seller must find a buyer! I could offer to rent you my house for 60k a month. Are you obligated to accept?
@@jeanpierrerideout7560 You'd be laughed off every listing unless you were offering something truly special like a wing of Windsor Palace.
We're talking about rent floors and medians. We'll see if COVID-19 is finally the event to shake it up, but under normal operating procedure rents go up when housing stock gets scarce.
@@Siferatu Why is housing stock scarce?
@@jeanpierrerideout7560 Meant to write affordable housing stock. Starter homes, entry level, whatever you want to call it, those houses aren't out there on the market. Maybe the case is different in flyover country, YMMV.
Developers aren't building Levittown. McMansion communities were all that went up until the mid 2000s. "Luxury" townhome communities are all that's being built right now. Prices for townhomes start at $300K. New housing is out.
Homes that could be affordable are suffering from HGTV. The homeowner might do $30K in kitchen and bath renovations then add $60K onto the asking price. Flippers do the same with only $10K.
Houses that go for real market rate are gone in hours. Flippers, wholesalers, and landlords tie them up in "close by Friday" cash transactions. By the time it's hit the MLS it's Pending.
Thank you. You have cleared things up for me.
So helpful. Thx Dave!
Being able to work on your own home is a blessing. I'm a plumber and work for a mechanical company. I can replace every pipe, water heater, furnace and AC in a weekend, For under 4k. Not to mention any small repairs.
Dave, in theory your advice makes sense but in reality I have never seen rents go down in major cityâs. I live in Canada, Toronto Ontario to be exact and as long as people keep immigrating here (and they will) the rents and the cost of a house will never go down, itâs been this way for quite some time now. I know major metropolisâs in the states have the same issue.
Definitely appreciate this advice! đđŒ
Thank you David, great insight.
I live in California and Iâve never seen it play out that way, the rent price never corrects. In 2008 a lot of people lost there homes and those people could no longer qualify to get new homes witch created a massive influx of renters, this is a multi decade issue that is still not being felt with. More millennials are loosing there homes than buying new homes.
This is because comiefornia has massive restrictions on new buildings, and renovations, as well as crazy high taxes that limit the free market's ability to correct for such an uptick in pricing. Unless your livelyhood depends on you staying there, move now and realize how it got so bad in the first place so California politics don't ruin the state you move to.
Yea I've realized that I have to take some of Dave's advice with a grain of salt while living in California
My dad bought 5-7 homes in bay area during the crash and has made him millions now.
Based on Dave's principles I'll need to have around $250K annual household income to buy a decent home living in Los Angeles lol
This video matured so well
Iâd only buy a home if I knew I would stay at a job in the area for more than 10yearsđ
Same here, amazing how many don't consider this.
why don't you rent that home if you need to move? there's no reason to sell it
@@hrvojematic7858 Depends if you want to deal with all the hassles, the most important of which is finding good tenants.
Just rent it to someone..
this leads me to think .. is there job security?
I worked for a top real estate broker for about 7 years, so this conversation has always fascinated me. I'm not ready for home ownership quite yet and Dave provided some good insight on why it's situational.
This is very relevant especially with the threat of the threat of a global recession. It's on all of our minds
Here in south Florida you can mortgage A 3/2 1300sq ft for 1400 or rent a house that hasnât been remodeled since the 90s for 2500 lol
This is what I've noticed here as well
South Florida rental market is atrocious. Half the ads are scams and the other half are overpriced undermanaged garbage. 1/1 is easily 1100 now before utilities and empty units literally get gobbled up before you can even get to the place to look at it. Iâm so burnt out looking for apartments but Iâve noticed you can buy some oceanside condos for 85-115k... uncle Dave is crushing my dreams lol
Central Florida is about the same
About the same in North Florida, the rent is stupid here, but got a good deal on my house
I wanna visit Florida! đââïž
I lol'd when Dave brought up the receipt hanging out of the gas pump!
Thank you for sharing this.
Rent keeps going up and up and up in this area. Had to move to the trailer park just to save more cash because this is getting insane. Over half of my pay was to rent/utilities every month. Thankfully I have been following Dave's advice for years and the car and truck are both paid for and the credit cards have been unused so long some of them are just being deactivated so I am not in a bind just not happy renting in this area. Very seriously looking at buying as I can get a two bedroom for less then the rent on a mobile home and the 15 year rate is within $100. $37,000 saved up not counting the 401k or retirement, car should not need replacing for another decade (2016 Camry) Not exactly sure what Dave considers ready but I think it is about time.
Jared Thibodaux youâre definitely ready!!! get yourself into a good home, and establish that legacy
Where does rent ever go down at. Iâve rented since the 90âs to the mid 2000âs and Iâve yet to see rent correct itself. You show me a landlord who will reduce the money coming into their pockets and Iâll show you a unicorn.
It depends on vacancy rates. If a landlord thinks you're unlikely to move they have more incentive to maintain or increase rent. But if there are several vacancies in your bldg they're unlikely to raise rent.
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When the landlord excepts section like my apartment complex. When I moved in they didn't have section 8 units 3 years later we had new owners and lots of single moms moving in. I found out that some of the section 8 units were as low as 25.00 a month.
Renting = no mowing, no appliance replacement or repair, no property taxes or home owners insurance, no large initial down-payment, no strings attached you can leave after 1 year, incredible mobility. Cons= much less privacy, less space, usually less quality than a home, neighbors, utility fees can be much higher than you'd expect for an apartment.
I'm pretty sure all that is included in the rent. Matter fact, you paying for all of that plus a profit for the homeowner.
You can get a 4,500 sq. ft. house with a basement for $2,800 a month. I think I'll take that over buying. IDC about equity BTW.
Been renting for 35 years donât own the door knob/ had friends bought in 90s in Southern California they are all millionaires and Iâm still broke they had down payments in 90s
Wish dave would talk more about things that could apply to California.. but all he'll say is well move out of California... lol
What more is there to say?
The truth of the matter is there is a very deep division in the State of California.
I'm in Los Angeles ...Love dave, but LA is a different animal.
Because it's great advice.
Exactly...Agreed.
The key is to rent and move every time your lease is up and chase the deals. Move to a complex down the road, then move after that lease up, when you renew they hurt you.
Except when interest rates leap up. Buying in LA right now is definitely more expensive than renting.
Telling people the TRUTH is why I always listen !
Repairs, utilities, taxes - almost always these will close the gap between rent and mortgage payments.
I find renting to sometimes be better. Owning means you own all the headaches mortgage, home repairs, lawn maintenance. I live in a very nice apartment yes it's expensive but hey I have a pool , workout room basketball court and repairs are not mine. I walk through a well maintained beautiful landscaping courtyard. Yeah I pay for it all and all the maintenance workers keeping it looking nice. I could not afford all of this owning a home. Just my opinion. Plus I invest in real estate in another way
But you have a choice wether to try to make your home look nice in your own home. In the apartment you are in you have to pay these folks to cut the shrubs how they want. You have more freedom sir.
@@keywestalert6329 Not if you're dealing HOA. They can charge you money if you don't keep your lawn nice. And unless you have land between you and your neighbors or you live in a ghetto neighborhood, good luck finding a neighborhood without an HOA.
Yeah it's nice
I just got a pile of cash from stock options after a buyout. Not enough to pay off the mortgage, but enough to reduce my mortgage to 58k @ 1.79% fixed and have it paid off in 35 months.
Iâm 43, debt free other than the mortgage, put away 15%, and have a 3-6 month emergency fund.
I wish I had discovered this channel in my 20s - Iâd be a multi millionaire by now. I think I can become a millionaire in my mid 50s. New life goal!
The rental houses that I own were old fixer uppers, purchased between 1984 and 1990. I did most of my own repair work. My mortgage has held steady, but rents have increased. While building new units under today's building codes and zoning requirements is prohibitively expensive, maintaining what I already have is not.
*The age old question!* đđȘ Great video
Never seen rent go down in Alaska. Got a house at 21, In 8 years I've managed to be $300 under renters. Brand new house back in 2011, only 1000 sq feet. 156,950 at 3.5% 30 year fixed.
Very good advise .Thks
Don't buy a primary residence to live. Buy an investment property, have ur tenets pay off the mortgage then the house is an asset.
My rent per year is less than my coworkers property tax. Imagine all the costs it takes to just maintaining a home and see if that amount is more or less than you're paying for rent. My rent is so much less so I just decide to rent and invest the rest.
My income at this time isn't enough to buy a house, so I rent. I'm working toward changing that soon, I hope.
Rent and invest (say in index funds). Buy later in life
I have more than enough to put a good down payment on a home but I dont make nearly enough to pay for insurance, repairs etc
Needed this rant.
Our mortgage is half of what rent is for the same size apartment in san Diego. A same size house is almost double. Same neighborhood.
Same here.