Rental property billionaire says buying a home (with a mortgage) is "fancy bullshit" and you should rent instead
Rental property billionaire says buying a home (with a mortgage) is "fancy bullshit" and you should rent instead
[Mortgage Is 'Just A Fancy Bullsh*t Word For Paying Rent For 30 Years To The Bank,' Says Real Estate Billionaire Grant Cardone — Here's Why Renting Could Be A Better Financial Move
](https://finance.yahoo.com/news/mortgage-just-fancy-bullsh-t-171148202.html?guccounter=1)
He assumes an average monthly rental cost of $1354, and 3% rent increase annually. I have lived in apartments where they increased the rent 10% one year and 15% the next.
Even putting that aside, ok, by the time you're dead, say it works out to the same amount spent. But as an owner, you've now invested in a generational asset. Renting now means your kids and theirs will also likely rent.
Gtfo.
I’d kill for my rent to only be $1354.
That's about my mortgage payment.
You’re forgetting that elder care will eat up that wealth.
At least they can sell the house. /s, but not.
My rent has gone up at least $50-$100 a year when renewing my lease since I've been an adult renting a residence. In 2015 when I got my first apartment it was $750/month, utilities included except for electric and internet. 2 apartments later and an increase every year, I'm paying $2,000 month plus all utilities and fees for trash. It ends up being like $2350/month all said and done. And sure it's a nicer place, but it's not that much nicer. I'm so thankful I don't have kids, because I can't afford to feed myself, let alone children. I don't know how parents are doing this right now.
My mortgage is about that, on a 3 bedroom home, because I was fortunate to buy it in the mid-10s before prices in my area went insane. Our original mortgage was about $1150, but it's gone up $200 due to property taxes over 8 years. This averages an increase of $12.50 per year, but I know people whose rents have increased by $200 in a single year in my city. Getting a fixed rate mortgage (and refinancing when interest rates are low) is so much more stable than renting
owning several properties for renting and not needing to actually work is the real fancy bullshit.
did anyone tell that to this leech?
"I love renting. I never have to fix anything that's the landlords job"
To
"Landlords do NOTHING"
In a few short years.
Tenant: "Hey landlord, my furnace isn't working anymore. Fix it please."
Landlord: Makes one phone call to a contractor and uses 10% of this month's rent to pay them
My landlord makes maybe two phone calls like that a year, and she will have "earned" $40,800 of my money. Somehow, people like her have convinced people like you that simply owning a home that and doing 1 hour of cumulative work once a year is worth 30% of an engineer's income.
Fuck off, leech.
"Freedom is overrated, people are happier when they pick cotton." Slave Owner
At least you get something in return for "paying rent" to the bank. Paying rent to a landlord is just paying someone elses mortgage, for no return whatsoever.
Having a landlord be responsible for home fixes and appliances is pretty nice to be honest, provided they aren't a shit landlord. I have a mortgage now which is nice, but the additional headaches are real.
Personally I really like doing my own home repairs and such, I get a lot of satisfaction and even though I'll grumble and curse the whole time and will often procrastinate on some of my projects, I do really enjoy myself the whole time I'm doing it, even if I don't always admit it. It kind of drove me nuts when I lived in my apartment and I wasn't allowed to do a lot of the little repairs and upgrades I wanted to do myself.
But I can definitely appreciate that it's not a thing for everyone, and because of that it really pisses me off that a lot of landlords, property managers, HOAs, condo associations are so shitty because there's a lot of people who it frankly doesn't make sense for them to own a home and be responsible for the maintenance when they don't have the skills, time, or desire to do it themselves.
We bought my mother in law's house, she had a whole bathroom that she basically didn't use because the toilet had a small leak and the aerator on the sink faucet was clogged up with lime and sediment. That took me maybe $20 worth of materials and an hour and a half to fix counting the time it took me to drive to the hardware store with some built in time to wander around gawking at tools I don't need. She's someone who probably shouldn't own a house and would be better served with a decent rental situation, but that's a lot easier said than done, so now I get roped into doing little repairs for her at her new place is addition to handling my own stuff.
Owning a house is definitely not for everyone, and having a savings account for emergency repair is a must. I tend to do most repairs myself, but I know my limits and will pay someone when I know I might screw it up.
I hate to tell you this, bud, but one day, you're going to die. You can't take that house with you. Use your money to travel, and live.
Same for that landlord, he can't bring the profit he made. I'd rather make sure the money stays in my pocket than his.
Either I spend the money to pay the mortgage or to pay a rent, I'd rather have something I can live in and pass along to my kids.
I traveled quite a bit already, both for leisure and for work before settling down to have a family.
"Renting makes me money."
Okay, work backwards from there.
FFS these people.
Every time I see articles about this my knee jerk reaction gets more and more unhinged. Regardless, the world would be a better place if people like this were dead.
Thats the nicest way to say it. These people fucking suck.
They’re living piñatas and it’s time to pop em.
Give me a rental with a fixed monthly price for 30 years and I'll consider it.
Yeah that goes down as keep paying it and can be leveraged against your debt, and is designed so you don't have to pay rent when you're retired
Also with a refund if you move out, in fact often giving you more money than you paid.
Fixed-rate mortgages are quickly becoming a thing of the past as well.
Just another ladder pulled up as we reach it.
Source?
If we built enough, this would be the end state.
Oh, I have something to say about this.
About 7 or 8 years ago I bought my house. I had friends of mine showing me articles that basically had the same "renting is better than buying" message bullshit.
You don't really need much brain power to understand that is absurd. Paying loads amounts of money for something that will never be yours is obviously stupid in the long term.
The thing that made me very upset at the time is that my friends drunk the cool aid of these very same article and didn't buy a property when they had the chance... Now, 8 years after, they are all struggling to buy properties except now is a lot more expensive.
The house you live in should be YOURS and no-one else.
Bought around 7 years ago as well, got told the same things. I said I was taking a bit of a cost hit now to lower my costs in the long term because my mortgage payments will never go up the way my rent payments were.
Fuck me I had no idea things would get this bad, and boy am I glad I got into a home when I did. It really shouldn't cost that much to rent, this shit is absurd.
I agree that it's better to own for 95% of the cases, but some of these people talking about renting being best might have been through the '08 crash. With China having their own financial crisis, we could be in a bubble because they invested a lot in US real estate. If your underwater in your mortgage (your mortgage is higher than it's worth), you do feel like you're drowning.
I'm not trying to scare anyone, but there is no guarantee that anything stays the same. I also hope people who are buying for the first time understand the different types of loans and they should 99% of the time want a fixed rate.
In a very specific scenario, with a very large amount of running the numbers, as a high income person with low personal expenses and a very good investment advisor, I could see how in certain situations/locations where mortgage rates are much higher than rental rates, that you get better fiscal results investing than paying that mortgage. That was a very rare situation 7 years ago, even more rare now. Where I lived ten years ago, I could not possibly afford the mortgage but I could the rent. These days there the situation has reversed and they're both sky high regardless.
In any ideal scenario, renting would be preferable to buying for the vast majority of people.
The reason buying crushes renting, in terms of value, is that the value of housing (and thus the price) continually rises. Homeowners get equity and renters get fucked.
This happens because we literally are not allowed to build enough housing. This makes owning a home an investment.
I'll give you three guesses as to what bloc of voters instituted those restrictions, and continues to fight for them today.
I suppose my ideals are different: in an ideal scenario, I think buying is preferable to renting. But besides the problem of having enough money to get started with buying, renting gives a flexibility and reduced (outsourced to landlord) responsibility that's very valuable for many people, especially in the short term.
You don't really need much brain power
Yes, yes. You're very smart and special...
You're not exactly wrong, but we should all be focused on the extremely wealthy and giant property companies that caused and are profiting off the housing crisis, yet people like you would rather jack yourselves off at your amazing foresight and laugh at anyone struggling. Kind of a Boomer response, no? Try to learn some empathy...
Well, the thing is you never really own it. Don't pay your property taxes and insurance, see what happens.
Buying makes sense if you're going to leave that property to children or relatives.
Well, the thing is you never really own it. Don’t pay your property taxes and insurance, see what happens.
What is the point of this comment? As long as you live in society you will be paying taxes. Death and taxes are the two global absolutes, and an argument could be made that death may be ultimately beatable.
If renting doesn’t make sense at half of what it costs to pay the mortgage, how does the mortgage make sense
Where on earth is renting cheaper than a mortgage?
Let’s say it’s in Orange County where the house is $800 grand," Cardone said. "You’d have to sell the house for $2 million just to pay the interest bac
As opposed to paying even the same in rent, where you get NONE of it back?
assuming a 3% annual increase in rent
Lol, what planet do they live on?
On that 800k house, it takes a little over 30 years to get 2 million out of it if the house appreciates at 2% per year. Housing in many places has appreciated much faster than that (much faster than the market or any other single thing, including cryptocurrency)
And this is why we have a housing shortage. Because it's in the financial interests of owners to restrict the building of housing.
In high CoL places, rent is routinely much lower than a mortgage— not to even mention the incredible down payment that you have to get the loan in the first place.
As an example, a one bedroom apartment in SF would cost you around $1,000,000 to buy. If you somehow have $200k to get a mortgage, your monthly payment is about $6k. To rent that same apartment, you’d only (lol, only) pay ~$3000-4500.
On top of this, the cost of owning is higher than just your mortgage payment. Your lender will most likely require homeowners insurance which can easily run a few thousand dollars per year (compared to a couple hundred for renters insurance). You also have to pay for the big repairs yourself when as a renter if the heat breaks that’s the landlord’s problem.
This is me. I live in LA, near Hollywood. I pay 3k/month in rent for a 1200sq ft 2br apartment that's close to everything.
A condo similar to my apartment (it was a condo conversion of a building similar to mine) in my neighborhood sold for almost a million this past year. That's about 6k/month all in w/ taxes and whatnot, not including maintenance costs.
Why the fuck would I pay double to own the same thing, and lose all my flexibility, when I take that 3k difference every month and invest it. Which builds wealth too. Sure, my investments may not be as inflation protected as a home, but they're a lot more fucking liquid. And I can move in 30 days no unsold house hanging over my head.
In Australia and most developed cities in Asia rent is cheaper than a mortgage.
Do mortgages function the same in those Asian cities?
I mean you could compare the 'monthly payment' on Jenose in Korea but it's not the real number. It's not comparable.
This is not correct for Australia.
I'm looking at places in Melbourne at the moment. A 1-bedroom place is around $450 a week or $1800 a month roughly.
You can easily get a cheaper mortgage than that for a 1 bedroom place. Potentially even get a 2 bedroom unit for same as you'd pay in rent.
Guillotines.
And he personally owns how many houses?
And coincidentally wants people to rent them.
To be fair, I doubt he has mortgages on any of them, so while he may be a dumb asshole, he’s not being hypocritical here.
he didn't become a real estate billionaire by telling people the truth about real estate
Nah I’m sure he rents his house
There is no right or wrong answer when it comes to rent vs own. Do what is best for you
What I will impart to people here though is always look where the message is coming from. Therein you glean some of the answer.
There is no sight or wrong answer when it comes to rent vs own. Do what is best for you
Putting money into your own ownership, versus putting money in for somebody else's ownership, is a very straightforward scenario examination, to determine which one is better for you.
I mean, that's kind of how it used to be. "No right or wrong answer, do what works for you." I wasn't really in a long-term career at the time so I rented, as a choice. Now housing has gone up so much, almost no one my age can afford to buy a home. And because we're locked-in to renting, property owners are raising rents, every year to increase their profits. And because we're all spending so much money just for shelter, we don't have it saved up to purchase even a cheap home. It happened to me several years ago, it happened to me during the pandemic, it happened during crazy-high inflation, and it's still happening. They know they have a (almost literal) captive audience. I can't even afford to move to a different area, and if I did, who's to say they wouldn't also start jacking up my rent after the year-long lease is up.
My other choice is to live on the streets. Home-ownership isn't perfect and has its unique challenges, but ultimately it gives you something renters don't have: stability and security. We're fucked...
I mean, you do also have the option of moving to an area with cheaper house prices, y'know leaving behind all of your friends, family, favorite places etc. plus you'd probably have to trade the cost of your home for driving a lot more and therefore buying cars more often if you move to small town America where houses are affordable.
Are…are you me?
"Anything but paying me and making me rich is bullshit" - Toddler billionaire throwing a tantrum.
This is not the first time I’ve seen media stories within recent years pushing this idea that renting is better than buying.
This is the absolute stupidest most transparent lie the rich are trying to pull to fuck us. Sure we don’t see all the shady shit with lobbying and and all the details of inflation bullshit. Those are easier to keep mysterious and hide the exact details.
But this rent thing, that’s the dumbest most demonstrably false lie they have ever tried to spread. If anyone is believing that shit, god help them.
We bought our house seven years ago. If we were to sell it today we'd make almost as much in profit as what we paid for it.
Very similar situation here. It was a huge stretch to get it, and I was skeptical, but my partner pushed hard for it and everything got better after we got a house.
Nevermind that we put all of our consumer debt on the mortgage when we renewed, even our mortgage payments are by far lower than anything you can get in town.
It's crazy seeing materially, exactly how greedy landlords are when I friend of mine in a tiny two bedroom is paying almost double what I pay the bank for a whole ass house.
Apparently equity is not worth mentioning.
To me, the big draw to renting is the flexibility. It's easier to move if you find a better deal elsewhere or you need to move for a job. It's especially attractive in many European countries where a lease is "unlimited" and doesn't run out unless you cancel and there's only a three-month cancellation period. Makes it very flexible.
A bit different in the states where the lease term is set, usually at one year and then you renew and have to pay to break the lease if you move out before the end of the lease. But still more flexible than buying.
A quick sale is much more involved and risky, imo.
Aight let's see. Mortgage is a fixed rate over an agreed upon term that ends with you owning the property, rent increases every year, you have no control over the property and you get fucked constantly.
Yup, totally the same thing.
Also my mortgage for my 1/2 acre property with 1500 sqft house is $50 less per month than my 900 sqft poorly constructed "high end" apartment rent was about to spike up to. You know, after renters protections were removed during the pandemic.
Quick edit: furthermore, it took me until I was 30 to buy a house. In that time I spent 170k in rent, when I started renting the property I'm currently living in was worth 140k. That's pretty easy math right there. Just like... Come on.
But… but… but you still have to pay for maintenance and repair.
Ok I’m half kidding, given you still have to pay those things but depending on how the math works it can still be cheaper to own.
The thing is as a renter you basically pay for maintenance and repair anyway. If as a renter I damage a wall, I pay for it, if I leave the house messy when I vacate I pay for a cleaner out of my bond. If the place is freshly renovated my rent is higher to cover it, if there’s an unforeseen expense like a tap bursts, sure the owner pays for it.. but then my rent goes up 150 a week next year because of “market trends”
The simple retort to this is that every renter is paying for a mortgage: their landlord's.
But #LandlordLivesMatter!
Fuck em.
You're paying for a service that provides you a place to sleep for a term. The deal the landlord has with the bank is none of your business.
Many large rental companies don't even have mortgages. They pay cash for what they buy. So your statement is extremely ignorant.Yes landlords are famous for renting at a loss...
Of course the amount of money that would go into a mortgage payment would go into rent. If they pay cash up front, they have a projected timeline to recoup that investment. The details about whether it's technically a mortgage payment is immaterial, the reality for the resident is that rent is higher than a comparable mortgage payment would be.
The only difference in amount is that the rent pretends the mortgage is infinite term, rather then rent getting cheap after the purchaser has recouped their purchase expense.
Housing can't be both an investment vehicle and affordable. This guy is essentially saying "let's just nix the affordable part". Absolute vampire.
He's literally one of the people making home ownership unaffordable.
I think we should conquer his mansion and turn it into a commune.
This turd should be one of the first to go
A friend of mine worked in Switzerland for couple of years. It's pretty much impossible to buy anything there because everything is owned by investment founds. He worked with two Swiss guys. One got lucky and married a women that inherited a piece of land and was able to build his own house. The other one was renting. According to my friend the levels or resentment and jealousy expressed by the latter were staggering. They pretend it's a good model but in reality they know being forced to rent sucks. Don't let this model become reality in other places.
That's like saying 'don't let corporations win'. They already won, we're seeing the ramifications of that now.
In Switzerland, property ownership is super hard and very low in the country.
Purchase prices keep going up, same for rent. Even when interest rates were at rock bottom the rent was ridiculous. In some cities renting is a huge challenge with very low availability and high demand. +30 people would show up to visit an apartment the second it was put out to rent and people would use networking to boost their position to get one.
LMAO, considering big business is buying up homes literally for this purpose, I'll take what he's saying with a grain of salt.
Does that mean we should over extend on buying a house that's outside of our means? Absolutely not, but at the same time, housing is still way overpriced and since shit is barely regulated, both from a seller and a purchasers standpoint, there's a lot of regular people getting stuck with a lot of shitty options for living situations.
Just a grain? I say whole mine. I bet he "owns".
At least enough salt for 3 tequila
Grant cardone is one of the slimiest cunts in the billionaire class, and that's a high bar
You can safely discount anything he says, because it is always self-serving
Yeah but at the end of 30 years the bank lets me keep the place and they never raise the price
As long as you pay the property tqxes and homeowner's insurance, and all the maintenance.
And you think the landlord doesn't factor that in the rental price?
He's certainly not going to rent the place at a loss.
Don't forget the last 5 years is u basically using the banks money for free cuz of amortization.
Billionaire landlords breathing public air is just fancy bullshit. The air on this planet is not for them. They have not earned it.
Put him on the List.
Put him on the menu
Grant cardone is one of the slimiest cunts in the billionaire class, and that's a high bar
You can safely discount anything he says, because it is always self-serving
I also, like to troll the poors.
In other news, the job market is overrated and you'd all do better to come and work at my factory in perpetuity as indentured servants.
Grant Cardone is famous for spouting BS. Whenever the media needs a good controversy they just wait for him to open his mouth.
Correct. His business is being an offensive blowhard, which attracts a certain kind of person who perceives it as strength. Then they pay him to make them feel better about beibng offensive blowhards.
But you're not renting the home from the bank, you're renting the money you borrowed so you can own your own home
It is always wrong if you're saying to just buy or just rent. Neither is the better financial move for everyone.
I agree with that, you have to look at the interest rates, the housing market, the condition of the house and your own abilities to fix things while you're doing the numbers. But I do think that it is usually in your favor to own.
Yeah, gonna call bullshit.
Bought this house 3 years ago, and my mortgage payment is half of what a comparable house would cost to rent. Mortgage payment includes property taxes and homeowners insurance. Plus I'll own it in 12 more years and can already use it as equity.
3 years ago
Yeah, that's the secret. The housing market was much better for buyers a few years ago.
The equity part is the big one. We were able to refinance and pay off a lot of our mountain of debt.
What's that, Madame Guillotine? You're hungry?
Guillotine is too quick. Draw and Quarter is all the rage nowadays. Upgraded for the 21st century, so horses are replaced by electric bikes.
horses are replaced by electric bikes
Not really what you were going for, but I'm imagining a spin class where everyone is wearing executioners cowels and the head executioner is verbally pumping up the others for more power to pull the victim apart. Could have been a show in the Running Man universe.
Ain't nobody eating the rich or cutting folks heads off. I'm so tired of seeing these. You got your Wendy's and Netflix, y'all ain't gonna do shit.
Ok. What have you got?
People are aware that you don't have to live in a house for 30 years if you get a 30 year mortgage, right? That hasn't been a thing since the 80s.
Correct. Note usually says 1 or 2 years.
"Debt incumbent home owners don't go on strike"
He's not exactly wrong. If you have a mortgage, you do not really "own" anything and essentially have a "landlord" through your lender.
You may not just be mad at renting/landlordism. Your ire may be for the generalized concept of private property.
If you have a mortgage, you own what you paid (except interests).
If you bankrupt and are unsolved on a mortgage, and they take the house, the house is sold in an auction, the bank gets what's remaining in the mortgage, but the rest is yours.
The point being that your place of residence, the place where you possibly stake your roots and raise your family, is not fully yours and can just as easily be taken away if you suffer any type of financial misfortune or fail to keep up financially with the market around your community.
The relationship to your lender is very similar to a renter's relationship to their landlord.
Equity is a benefit, surely, but indebting yourself for 30 years in a location you may have compromised for is the other side of it. And your relationship to a higher authority who truly owns your property remains (until the debt is paid, of course).
Inherently, it all comes back to private property and one's relationship with its owners.
He's not exactly wrong. If you have a mortgage, you do not really "own" anything and essentially have a "landlord" through your lender.
Except there is an end to those payments after which you do actually own the roof over your head.
Plus, the lender doesn't want to "renovict" you or pull any of the other bullshit that typical landlords try to get away with.
Grant cardone is one of the slimiest cunts in the billionaire class, and that's a high bar
You can safely discount anything he says, because it is always self-serving
It’s the Catalina wine mixer
Cancer-free is “just a fancy bullshit word for not mortgaging your house to buy my medications,’ says cancer drug manufacturer. Here’s why having cancer could be a better financial move (for me).
He's right as far as mortgages go, which is one of the most abusive financial albatrosses a person can wear. Nobody tells people that they're going to actually pay 3 to 4 times the amount they bought the house for when they sign the papers.
But where does he even get the idea that rent is less than a mortgage at this point? That's sure not what it looks like to me.
You only pay 3-4x what the house is worth if you stay in the house for 30 years and pay the minimum payment. If you pay extra on the principle - because your income went up over the last 10 years - you pay less. If interest rates go down in that time and you refinance, you pay less.
Never pay extra on ur mtg omg!!! Keep your capital liquid!
Your second to last sentence is simply not remotely true! Your last sentence is only true in certain cases.
My mortgage in a HCOL area is around $1350 month (excluding anything else) for a ~350sqft studio. Rent for something similar in the same area I live starts at around $1500 on the cheap end.
The only way you’re saving money with buying vs renting is if you’re not paying a single cent on utilities in the place you are renting (which is highly unlikely around my area). If you’re paying for your own water, electric, internet, and whatnot, you’re basically paying the same whether you buy or rent.
Right but the difference is your rent goes up but your mortgage stays the same.
Yes, but I explicitly said mortgage only without including utilities, taxes, and insurance if you have to pay that separately from the mortgage. Those things can (and most likely will) change - albeit usually not to the degree that landlords love to pricegouge on rent.
Like, take my same place again as an example. I only pay like $1350 for a mortgage, sure, but I also pay ~$600 in utilities and maintenance fees. My monthly payment to live in a normal environment is short of $2000 a month. My fees will go up again an extra 2% starting next year, so I am paying more - not that much, sure, but it is more. If I was renting a place for $1500 and didn’t have to pay for utilities, even a 20% increase from $1500 to $1800 would still be absolutely cheaper than buying my studio. Renting becomes fucked when landlords go “yeah, pay $1500 a month and you also have to pay for your utilities. Also I’m increasing the rent next month by 20% lmao get fucked nerd”.
This is, of course, just looking at cost. That’s ignoring the fact you’re paying a mortgage to own something versus paying somebody else’s mortgage or just lining their pockets.
Okay
Fuck that. It helps build generational wealth. Something this fuck stick doesn't want you to do.
depending on the market and the area, a mortgage might be cheaper - often this is not the case though
Well, yeah. Why do americans all think they need to buy houses? Implement good renter protection so people can rent without worries
As soon as Biden stops the money printer the whole market is going to crash like in 2008 until then enjoy mass inflation.
Inflation is already below long term averages. Got any more takes that defy data?
Yeah we heard these amazing takes in 2008 too.
The avarage American spending power doesn't seem to agree with you since nobody is buying houses and Genocide Joe now wants to give away house buying money to prop up the bubble.
As soon as Saudi jacks up the oil prices the American economy is going to freefall.
Not exactly the wrong message but definitely the wrong messenger.
Absolutely, 100% the wrong message, because it isn't correct even slightly.
