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- [00:06]
A
Is this smarter to rent than to own right now? Well, it depends on what you're talking about. I mean, you'd never rent bed sheets, washcloths, or a mattress. Joke's on you. You ever stayed in a hotel? Cause that's exactly what you did, brah. Disgusting. That's disgusting. That's why I bring my own sheets. Life hack. Life hacking, man. But when it comes to whether you should rent or buy your home, the answer? Not so simple. Because for a lot of people, including plenty, renting is the smarter move. And today, I'll explain why. We'll debunk some of the biggest myths about renting and look at three major reasons why renting ain't so bad after all. So why are we digging into this today? Well, I've recently come across a finance trend pioneered by a group of people who call themselves forever renters. Basically, these folks are beginning to question whether home ownership is all it's cracked up to be. And I have to say, some of the reasons are more than valid. Let me show you what I mean. Roll the tape.
- [01:00]
B
Owning a house and buying a house and taking out a mortgage and taking on debt ain't all that it's cracked up to be. The Realtor association of the World has done a great job of saying renting is throwing away money. Because that's what the American dream was 50 years ago. Buy a house, two car, garage, picket fence, 2.2 kids. That's what the American dream is. The American dream today is economic freedom. Pick and choose wherever the hell you want to go, keep it moving, and stay flexible, and keep your overhead low. So what people forget is that. All right, you know that if you're going to buy a place, first thing you're going to look at is the mortgage payment, right? So typically, in the last six months, it's gone from 3% to 6%. That's double. I'm not a mathematician, but I'm pretty sure three to six is double. But the three things that people forget about when they go to buy a house, and for those of us that have bought a house, they get it. Now, those of us that have not is what I call the big three expenses. That's your taxes, your maintenance, and your insurance. Those are three things you do not have to pay for if you're renting.
- [01:58]
A
Okay, now you guys know I am pro home ownership, but this guy, he's onto something, despite the fact that he willingly got in front of a camera wearing a literal undershirt. And also, the Realtor association of the world 100%, not a thing. He is right though, that renting comes with a lot of pros and three main ones come to mind. Number one, he mentioned this flexibility. Renting means you can move whenever you want, or at least when your lease is up. No realtors, no open houses, no waiting six months while strangers critique your choice of honeycomb backsplash tile. Just pack up, sign a new lease, hit the road. So if your job changes, your life changes, or you just decide you're done living in Elkhorn, Wisconsin, you can pack up and bounce. Pro number two, less responsibility. Freezer, stop freezing. Not your problem. Dryer, stop drying. Again, not your problem. Swiper, no swiping. That's swiper's problem. Husband, stop wearing his ring in public. Probably I would look into that if I were you. Something's going on there. I always had red flags about Brad. Not Chad though. Chad. He's a real one, but for real. One of the major benefits of renting is that paying for repairs, maintenance and renovations falls under the landlord's responsibility often. Same goes for landscaping. So if popping Willys on the John Deere ain't your thing, renting could be for you. Pro number three, it's technically cheaper. The median home listing price in America right Now is about $440,000 on a 30 year mortgage. With 20% down at 6.75% interest rate, you can expect a monthly pay of close to 2,300 just for principal and interest. That's not including property taxes and homeowners insurance. By contrast, the typical rent for a two bedroom apartment in the US is just under 1,400 bucks a month. And yes, I know you're not building equity when you rent. We'll talk more about that later. But just thinking about the short term, renting is often way cheaper, especially if you have roommates. Which is why it's usually a much better option for the youth of America just getting started in their careers with a smaller income. And I practice what I preach here. I had roommates all the way up until I was married, so I've lived this out. So when you stack all three of those benefits together, more flexibility, less responsibility, and more affordability, renting seems like a pretty good option. So don't listen to people who say renting is throwing money away. Listen, the truth is, renting can be one of the smartest financial decisions you make right now. Especially if buying a home would stretch you too thin. For starters, it's not throwing money away because you're getting something in Return. These people aren't saying this about haircuts. Oh, it's a waste of money. You're just gonna have to pay it again next month. And you don't own anything. None of the hairs are yours. The barber owns them. Now, I own a very slick pompadour light with a hard part and a fade, thank you very much.
- [04:27]
B
Just got faded.
- [04:29]
A
And on top of that, housing prices and interest rates are super high these days, which you don't need me to tell you. And a lot of people are feeling pressure to get in the market before it's too late. Here's the problem, though. When you buy a home you can't afford, you. You don't just get a house. You get stress, strain, and a bunch of bills you might not be ready for. And that's what we call being house poor. And that means your mortgage, your property taxes, your insurance, your maintenance, your utilities, all of that eats up so much of your take home pay that there's nothing left to put toward investing, saving, or starting that cat book store you've been dreaming of called Pur and Prose. Would I go there? No, I wouldn't darken the door. I can smell it from a mile away. All right. Ain't enough litter boxes in the world to keep that thing. Oh, shit. Compliant. Okay. Also, those are Taylor Swift cats. Those. Some. Those cats have more in their 401k than I do. I can't afford those cats in my store. But keep dreaming. Chatgpt. Keep dreaming. I was hoping I dreamt that. On the other hand, renting gives you margin. It gives you time to get your money in order to pay off debt, to build that emergency fund, to save up a solid down payment so this house can be a blessing instead of a burden. And that way, when you do buy, you're not drowning in costs or dependent on credit cards to cover the basics. So, bottom line, renting does not mean you're wasting money. It just means you're buying patience and being wise. If you're not ready for home ownership, that's perfectly fine. And don't let anyone guilt you for it. But here's the deal. While buying a home isn't for everyone right now, and there's nothing inherently wrong with renting, being a forever renter is not the way to go. Because despite the many benefits of renting that we've gone over, it also comes with some downsides that you need to be aware of. But before we go over the reasons that being a forever renter is a problem, let's Talk about another problem, not keeping tabs on your digital footprint. Chances are your personal data is floating around all over the Internet, which is bad news since data broker sites love selling your info to spammers and scammers. And that's why I use Deleteme, a sponsor of today's video. They remove your personal data from these shady data broker sites, and you never have to wonder how hard they're working, because every few months, Delete Me will send you a customized report letting you know exactly what they've removed from where and how much time they saved you. And right now, you can get 20% off their annual plans by going to JoinDeleteMe.com George or click the link in the description below. Okay, so why is being a forever renter a bad idea? Three main reasons. First, lack of cost stability. When you buy a home with a fixed rate mortgage, you are locking in that monthly payment for the lifetime of the loan. Rent, on the other hand, tends to go up a little bit every single year. So while rent may be more affordable on the front end, it ain't gonna stay that way. Buying is the only way to completely stabilize the biggest line item on your budget, bar insurance and taxes going up over time, which can increase your costs. Second, lack of control. Owning a home means you can do pretty much whatever you want to it. You want to add an extra bedroom? Fair game. Installing a blue bidet. A. Okay. Painting a Demi Lovato mural in your living room? Go for it. Surprisingly tasteful. Some would even say demure.
- [07:23]
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It's probably the best drawing I've ever done.
- [07:25]
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As long as your HOA doesn't throw a flag. The world is your oyster when you own, but when you rent, you don't have the same freedoms. Sure, you can hang some stuff on the wall and maybe change out the shower if you're careful. Major renovations, though, not going to happen. And you can kiss that blue bidet and demi mural goodbye. Finally, lack of financial progress. When you own a home, every monthly payment adds to your equity until eventually you've paid off the mortgage and own the home outright. And at the same time, the value of your home grows, thanks to appreciation. So basically, it's a forced savings plan that increases your net worth over time. And that doesn't happen with renting. It may not be throwing money away because you do get a product and service in return, but you're not getting the money back or making progress toward a financial goal. All right, that rounds out the main downsides of renting. And at this point in the video. We've gone over a lot of information which begs the question, what exactly should you take away from all this? Well, the main point is you shouldn't be a forever renter and you also shouldn't be a never renter. Renting is not evil and it's not a waste of money. It comes with a lot of benefits and has a purpose, time and place. That said, owning a home should be the ultimate goal you shoot for you in the future because it catapults your wealth building and stabilizes the biggest line item in your budget. Now I can already hear the whiny trolls who are gonna poke their heads out from the ground and leave a comment along the lines of But George, owning a home is too expensive, he's out of touch, yada yada yada yada yada. Look, you're not wrong. Homeownership do be expensive and it might be out of reach for you as things stand right now. But just imagine for a second what if instead of shaking your fist in the air a la the old man yelling at the cloud on the Simpsons, you instead set a five year goal to save up big down payment and increase your income to the point where you can a small condo, townhome or single family home in an affordable neighborhood. Then after another few years or so you could upgrade if you so choose and before long you'll have a paid for house that you're super proud of. And that might be 10, 15, 20 years from now. Which by the way is exactly what I did. So bottom line, you should get a plan to become a homeowner, enjoy the benefits of renting in the meantime and stop stealing your own hope. And if you want some help figuring out exactly how to make that happen, go to ramseysolutions.com realestate over there you're going to find a bunch of free guides and a mortgage calculator that will help you make a solid plan. I'll also drop a link to that in the description below. And if I haven't convinced you yet that having a home is a great goal to have and getting it paid off is even better, be sure to watch this video coming up next on the true value of a paid off home. Click here to watch it or use the link in the description below. That's it for today. Be sure to hit like on the video. Subscribe to the channel and share this with a friend who always wears undershirts in public. Make them uncomfortable. Thanks for watching. We'll see you next time.