How I (Still) Grow My Money by Renting vs. Buying a Home

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Steve Antonioni is not a financial advisor and nothing in this video should be construed as investment advice.

[christopherknox]

I think what this video and your other videos helped to clarify for me was that I can bury my FOMO, prevent myself from buying a home I can't really afford, and keep my money working in the market. My wife and I were really set on trying get into a house (almost felt pressured to) at the end of 2021 and we just couldn't compete with investors putting in cash offers and zero contingencies. Then the prices spiked, along with the interest rates, and now we couldn't afford the mortgage if we wanted to. We felt like we missed our chance and got priced out of our own neighborhood. After we calmed down and watched your videos, we realized we could still afford our rent and keep a high savings rate invested in the market. Appreciate you my dude!

[exgamer]

I’m just trying to wrap my head around the concept of considering a $1.2 million property as a “starter home”

[Whoisbu]

If you are buying a home just to live in then that home is a liability, not an asset. I would much rather rent and invest the difference. No headache with renting compared to owning a home with maintenance, repairs, insurance, taxes, etc.

[DemetriPanici]

I almost never comment on YouTube videos and I just gotta say your content has been great for me Steve. I have the opportunity to rent for very cheap in a nice place and made my own calculator recently to figure out unrecoverable costs on both sides of the equation. You blew mine out of the water and I can’t thank you enough for your content.

[Judy]

Now with the recent economy, To get financial freedom you have to be making money while you're asleep

[andy_knight]

There's a lot of practical value delivered in this video, thanks man! You mentioned (but didn't go into) psychological factors. I think cultural differences have a huge role to play. For those of us in the UK and similar countries, there is an expectation that you will own a home as soon as possible, or sometime around starting a family. There can be a perceived stigma around not having hit that milestone, like renting is something to be ashamed of. That alone could make some people want to buy, even if renting is financially more beneficial over time. Yet in most western European countries, renting is the norm and you don't buy your forever home until you retire.

[Jen]

This might tie into the psychological aspects and social pressure of buying a home, but I have heard people say that renting means you're throwing away money with nothing to show for it. I don't think so. You bought your place to live in for that month. You lived in a space that was yours because you paid for the month. It absolutely was valid money to spend. Thanks for the videos!🙂

[parttimescientist]

Hi Steve! This calculator really gave a very comprehensive overview of the points of considerations when it comes down to renting vs buying. I have done a similar calculation a few years back when I was considering a home purchase, and I definitely left out the sunken expenses that buyers have to fork out as well.

Fighting against the cultural norms (as you have mentioned) in Hong Kong has certainly been an uphill battle, where one is expected to own a property as a sign of maturity / wealth / rite of passage. "Buying bricks" as what the Chinese say is a virtue. But with sky-high property prices and low wage growth, owning a property is not only hard on one's pockets (as confirmed with your calculator) but also hard on one's mental health. After deciding to go against the current, being a rebel and not buying a home, I've never felt freer, lighter, and more excited for what the future entails because the dread of paying off a mortgage for the next 30 years has been lifted off my shoulders.

I guess that freedom, lightness, and excited is the definition of true financial freedom.

[Retrosenescent]

I kinda already intuitively knew that I was gaining a lot more by renting than buying, but your calculator showed me I was gaining a lot more than I even realized. Very well-made tool, I can tell you put a lot of work into it.

[thecuriousoutsider]

One of the reasons the numbers work out for the renter is because of a technological advancement called the apartment complex. This technology has brought greater efficiency to housing needs. The per unit maintenance costs are cheaper on a 20-unit complex with one management than on 20 independent units (aka homes) with a total of 20 managers. This economic advantage of scale is working for the renters of your friendly neighborhood apartment complex.

[rawlings]

Nice video . It’s however worth noting that Location plays a huge factor in the calculation . Try this same calculation with a different Province/city and you’ll get a different result

[katyore]

Thanks for all this. I live in a very expensive place as well. For me buying is better than renting only because my state is covering both the 3.5% downpayment (deferred for 30yrs at 1%) and closing costs (deferred for 30yrs at 0%). The problem is actually finding one within my budget Ugh. The key take away that you mentioned was if we are renting....we MUST be investing! Anyway I always learn something from your videos! Thanks!

[sinashirazi]

I live in US and work an a Mortgage Consultant.

We offer loans form 0 to 5% down so if you lower the initial investment by 15% I think the capital gain will make real estate much better options.

Also real estate is a lot more than just capital gains. Where the real value comes from is the Tax benefits such as 1031 exchanging or Depreciating your assets to avoid paying taxes and still be able to get a loan on the pre depreciation income or long term Net Operating Loss.

[ReeLSpirit]

if you househack it will make home ownership cheaper. also, you can cash out refinance when rates go down, which makes it a non tax loan that you can use to invest too. some people cash out refinanced in the last 2 years. they got maybe $100k-500k loan on their house at 2%-3%. just was basically free money given how bad inflation is. and they got to maintain the same or lower monthly mortgage payments at the same time get that money out.

[andrewi]

Renting is a great option for flexibility as well as predictability in forecasting your monthly expenses. One of the best ways I have found to build wealth is buying an investment property with a primary residence loan, and then moving after a year and renting it out. Add house hacking to that equation and you have a recipe for success. I own 3 rental properties but currently rent myself!

[mrh]

It is insane that a starter home costs north of half a million literally anywhere right now.

[Tesla-Cannon]

Well, I became a homeowner at 22. I ran my numbers here out of curiosity, and it turns out buying was the better option... But boy, the stress that comes along with buying and maintaining a home is it's own beast...

[samem.washington]

I THINK INFLATIONS IS CAUSING THE CURRENT SITUATION WE ALREADY HAVE NOW, THE PRICES INCREASES IS DUE TO THE HIGHER DEMAND OF PAYING OUT TO THE EMPLOYEES. THE AUTHORITIES IN THIS COUNTRY ALWAYS TREAT US LIKE CHILDREN WHO CANNOT FIGURE ANYTHING OUT FOR OURSELVES. RIGHT NOW VENTURING INTO MULTIPLE INCOME STREAMS IS THE BEST WAY TO SURVIVE THE CURRENT HARDSHIP AND RECESSION...

[thephatarmadillow]

Loved the video. I've been trying to explain this concept to several people for a while now. I've found that most people humor me for the sake of conversation but don't actually believe that it's possible to build wealth without real estate. In my local community, many only focus on trying to achieve home ownership (if you can call carrying an 800k loan ownership lol) and completely disregard the idea of renting + investing. I tend to think that most people aren't comfortable investing on their own and thus default to purchasing a home. It can't be ignored that a house is far less liquid than stocks - and that the sale of a home typically leads to the purchase of another with additional unrecoverable costs (land transfer tax and all the other things outlined - even if the next home is purchased in cash). Cheers.

[gerumgelovani]

I'M NEW TO BTC AND I'VE BEEN MAKING LOSSES TRYING TO MAKE PROFIT MYSELF IN TRADING...I THOUGHT TRADING ON DEMO ACCOUNT IS JUST LIKE TRADING THE REAL MARKET... CAN ANYONE HELP ME OUT OR AT LEAST ADVICE ME ON WHAT TO DO?