Is Renting Always A Waste Of Money?

Is Renting Always A Waste Of Money?


– To buy or not to buy. If you rent you’re making
somebody else rich. You’re paying someone else’s mortgage. You’ve heard that growing up. Now, coming from an Asian background we always were taught at a young age you want to own your home. You want to have a roof over
your head no matter what. Now, I was born in Hong Kong. In Hong Kong, a lot of peoples dreams, their entire dream in
life is to own a home. So, should you buy or should you rent? Now, I believe it is a stupid debate. Here’s why. Because it depends on
where you are at in life. It depends on your income
and also your goal. It’s like asking well should I buy a condo
or should I buy a house? Well, it depends. Do you like garden? Do you want to have facility? Do you want to have a gym? Do you want to work out in the morning? Do you want that condo lifestyle
so it’s less maintenance? Or you want to have a place,
a garden, or something, or you want your kids
run in the background? What is it you want? So, it’s a stupid argument. I understand that buying a
home is such a major decision. It is probably the most
important investment that you will ever make in your life. So, what I want to do today in this video, today I am going to
give you some principles that will help you to make
these decisions wisely and to think about this intelligently. I’m going to share some insights with you that you won’t get anywhere else. Question number one, can
you really afford it? If you look at a lot of theses charts, you see the cost of rent
versus the cost of housing, and you can see that. If you live in any major cities you know prices of
houses are so expensive. Real estate is expensive. So, with your current income you may not be able to buy
at all and that’s okay, because it might take
you years and decades to save up enough money
just for the down-payment. And then even then it is always a stretch to make that monthly mortgage payment. Then don’t buy, rent. Question number two, is it
cheaper to rent than to buy? Take Vancouver for example. The prices of housing is so expensive. It actually costs a lot
of money to buy a home. The mortgage payment is so high. If that is the case, maybe it is better to
rent and then buy later. Now, in real estate investing let’s say as a landlord I
have a piece of property and I’m renting it out. So, if my rent that is coming in is not even enough to
cover my mortgage payment, that’s called a negative cash
flow in real estate investing. So, you look at Vancouver. A lot of houses are
actually negative cash flow. If that is the case, you calculate. If I took a mortgage, let’s say my monthly
payment would be $3500. But if I actually just
rent the same place, it may be only $2800 or even $3000. So the landlord is actually
losing money every month for you to live there. The landlord is counting
on that appreciation, but you, as a tenant, that’s
okay, you save a few dollars. Then maybe you use that
money toward something else. Maybe starting your business
or developing a side hustle. Number three, rent if you are
still earning and learning. What do I mean by that? Maybe you just graduated. Maybe you are just starting your business. You are trying to figure things out. You are trying to figure
what is your career, what is your strength, what is the ideal location
for you to prosper. You never know because
there may be an opportunity in some other cities that
you may have to move. You might have to travel. For that I recommend you to rent. Why? Because you want to be mobile,
you want to be flexible especially if you are a millennial. Save that money. Instead of using it towards a down-payment use that money to invest in yourself or if you’re an entrepreneur
and you’re starting a business, invest that in your business
so you can grow that business. As that business makes you more money, as you make more money, then you can look into buying. But for now rent if you are still earning and you are still leaning. Number four, buy if you
are stable and established. Let’s say you are close to 30 years old or you are over 30 years old and you have a good career and you have good income coming in, then you can afford to buy
a home in a good location, in a good neighborhood and
still have money leftover. You buy. Or as a couple and
you’re working together. Maybe you and your husband
or wife both have jobs or you guys are working a
business together, then you buy. You buy because you are starting a family. You want to have a place where you can see your kids grow up. Number five, buy if
you are an entrepreneur and not yet an investor. Why? Because I know you as an entrepreneur. As an entrepreneur we like to take risks. Sometimes the opportunity
is right, you bet the farm. I know you, comment below. So, what happens is a home
is not and investment. It is a saving plan for you. Think of your primary residence
as your saving account. If you look at it that way, it is a force saving plan for you. So in case your business
goes through ups and downs, you are putting money aside. You are not betting everything
you have in your business. You notice that if you
stop paying your mortgage you’ll be out on the
street very, very quickly. Somehow as an entrepreneur
you’ll be creative enough that you will find the money. Good. So that every month you are
putting money in your mortgage that is just your savings account. In case something
happens to your business, in case you experience that ups and downs, at least you put a little
bit of money aside. You build up a little bit
of equity in your business. Yes, that is a little bit of buffer. Believe me, I learned this the hard way. Entrepreneurs are sometimes
overly optimistic. We think everything is
going to be so good. Everything is going so well,
but sometimes you never know. If you are an entrepreneur, buy. Number six, buy if you are
financially successful. If you are stable and you
are financially successful yes, buy. Why? Because I believe from my own experience when you have your own home there is a psychological benefit to that. That knowing that you’ve got a place. And you can design your home
exactly the way you want just like I designed my
home exactly the way I want to maximize my productivity. At the same time it is my sanctuary. But knowing that it is not an investment. I know that it is not an investment. I don’t look at it as an investment. It is simply just my home. It is my primary residence. Now, it depends on where you are at. If you are financially successful I would recommend that
you spend no more than 20% of your net worth on
that primary residence. Now, some people may say 30%, I say 20%, ideally less than that. So, let’s say your net worth
is two million dollars. You wouldn’t spend more than
400 K on your primary residence because your home is not an investment. You use your extra money
to buy more investments, maybe invest in more properties, more real estate investments. Your primary residence
is not an investment. So, no more than 20%. If you do that, just like me
I spend a very tiny percentage of my overall net worth
for my primary residence. That is my home. I have my sauna, I have my massage chair. I have my home theater, I have my library. I have my man cave, I have my gym. I have everything in one place and I designed the ideal home for me. That is where I feel relaxed, that is where I recharge my battery so I can be more and do more. That is what I do. So, comment below. Those are the six principles when it comes to should
you buy or should you rent. So, let me know. Are you going to buy or
are you going to rent?

100 thoughts on “Is Renting Always A Waste Of Money?

  1. What was your biggest takeaway from
    my video? Comment below.

    Also, you can comment any questions
    you have for me.

    I might feature your question
    in one of my next videos.

    Don’t forget. Like. Comment. And subscribe.

  2. This is suppose to be a 'buy or rent' video. A comparison video. Instead, it's a '7 reasons to buy a home' video. There is no comparison… wtf?

    And I want to know if it's a waste of money compare to buying. Yes or no? Ur 'principles' are common knowledge.

  3. Thank you. Taking most of the points from this video. So not going to rush to buy a house now. Thank you again… 🙏

  4. I’m still earning and learning, in the moment I’ve got my HTC certificate I would think about buying, not yet…. not before having the guide of dan lok

  5. Each time a property developer says "buy a home its good investment", i was like thinking "i buy a home for staying not for reselling". I always teach my sons "if u have excess monies and you have the source – buy. If u just have just enough say u have $1M and ur property costs u $1M – better rent. There are far too many supplies of property vs real user buyers, so much properties are bought as investment. Rental is cheaper since overstock and sometimes the owner would let u live free just enough to cover their monthly property expenses excluding the mortgage.

  6. Well.in albania theyre no property tax so u dont lose. Nothing
    In usa u pay taxes for me not worth paying taxes to irs no thanks i leaze and i write down on business taxes

  7. Does Dan actually reply? I have a question about buying a house. I am 50 years old and still renting. Never bought a house…..

  8. I've been binge-watching Dan Lok's videos and I must say that I'm motivated to invest on my strengths in order to create a high-earning skill. Thank you Dan Lok for opening my eyes and for dragging my ass back to the ground instead of working on my "passion".

  9. I have always hold the believe that rental is a waste of money.

    After watching this, I trigger many advantages of renting over buying.

    Thank you to those Dan : )

  10. Renting is better than owning a home if you know what you are doing since you want liquid assets and being able to move anywhere at anytime that gives better opportunities whether for jobs or investments.

    If you can completely live without a sense of nostalgia, nationalism, or cultural preference, I'd say that renting is better most of the time.

  11. Currently, I think Hong Kong people will all need rent rather buying.

    The most expensive price in the world. Unluckily, I live there.

  12. I chose to make a house rather done buying one or renting one because the house becomes more important because it shows the hardwork that you put in it

  13. Agreed on all points specially the one where you mentioned that if you are not financially stable don't buy rent and i expereinced that .

  14. I'm 27 Ugandan in agro-business but I don't have enough land for expansion. Is renting land a batter option for me .coz the money that can buy me one acre or two is enough for me to rent 7 acre . So advise me because agriculture is what I want to do for life as business and I'm into fruit,food and animals .my target is to reach 100 acres of land in use.

  15. Great video as always, but I don’t think renting is a great idea, depending on they income of course, for people with minimum salaries, if the rent cost me 1/3 of my salary, then is a definitely a buy if u have the cash, and that’s what I did personally,
    sold a house on the beach in Albania, that I could rent it only in sommer, but I was renting an appartament here in France where I leave, so I was losing money, so I sold it almost double, so that I can now be rent free here in France, so now I can focus on investing in the future.

  16. i really like your video, i just chose u to be my mentor of all that are in this world. little by little you are changing my life thank you.

  17. No. In short. You are payong for a service and so there for it is not a waste. If anything, define ownership of a home? You only live in it while you are alife, there for when you are dead you never really owned it. Why? Simple. You can't take ir with you where you are going. Lol But for security reasons is a better reason to have your own. But only if you can still have a life as well.

  18. You are rich because your father is rich. I have already visited your 20mio house btw. I find it is really easy what you do, you have never ever took a risk and you ask people to do.

  19. I'm in my first home I brought back in 2012 and lucky for me the 200ish a week I pay a week in mortgage is way less than what someone would rent me the house for now.

  20. I’ve only started watching about 10 of your videos, and I like your direct and honest approach to your topics. I like how clearly you categorized who should buy or rent. I’ve been reading and following Robert Kiyosaki for a long time, but he never gives as much concise and free information as you do without selling his books… it’s almost frustrating to watch him going round and round and round:) I’m very interested in taking your course! I’m reading FU Money now.

  21. Thank you mr dan…i started to begin my renting business..and its good because no business rivals and im still learning…i bought a house.. and im planning to renting another 2 houses to generate income..hello from malaysia..and started from zero here.. thanks..insya Allah..

  22. My advice: rent till you are comfortable enough to make 20 percent down payment of the mortgage. Excellent video from Dan 👌

  23. Sifu, you are the best! Your advice is always coming from a place of caring and genuineness.
    Real estate is nice, but sometimes people fail to realize if their house is an asset or liability.
    "Your primary residence is not an investment" is my biggest take-away.

  24. I am from HK as well, I cannot afford on flat here and i agree with the pressure of the culture here that you need to buy a flat. but this video give me a new perspective of buying my own property here. Thanks

  25. Ur vdos are very knowledgable i love your vdos right now i m 33 and i came to knows the facts that what mistakes i have made in my life but still not that bigger mistakes i m still happy and thankful to God but i have wasted alot of time in my life working hard nobody was able to give me true suggestion and i was confused about my career and i realized that i must had to work in the same field in which i have studied but i worked in different field whatever i learn from ur vdos i share with my husband thank you Dan

  26. From uk no one seems to mention u retire at 67 die at 87 if u rent at £1k a month u need to have saved £240k if u buy & pay off before u retire u live ‘free’ it’s not even a question 👍😁

  27. According to what you described I am going to rent not to buy, because am not yet financially successful.

  28. I am watching just because you actually you are here to solve problems, doubts and ignorance..I am from Greece. Right now with the current economy everyone who bought has regretted because they were evicted from banks and now rent and have created a debt to the bank. It's really sad when the original plan and thought was to create a family and offer them "a home".

  29. I'm renting right now because it's so cheap it doesn't make financial sense to buy right now. I see a market correction in the future and I'll be there to catch it.

  30. This is so eye opening. If I want to buy a 2 floor house, divide it and rent the upper floor, would it be considered an investment rather than just my home? I'm financially stable but nowhere near where I'd want to be, so buying a house would be more of a real estate business than just buying my own home. Would you recommend that I wait, or go for it taking into consideration that it's a business?

  31. earning a little amount of money and it just goes to paying check and basic expenses. so really confused. is better buy a house or keep on renting a place👀

  32. Thanks a lot Dan – I like the part about taking risks and using your home as a savings account lol . How true .

  33. Thank you so much Dan for making these videos.
    I'm a real estate agent. When I'm lost and don't know who to go to or learn from. I'll look for your videos and I always got tbe answer.

  34. Thank you so much. Great points. Definitely helps me see how renting can be very practical depending upon where you're at in life. You are my favorite channel on YT!

  35. It is great to own your home but you need to sacrifice, sometimes can not be where do you want or as big as you want but after the first one you will find the solution to be able to buy one more. What he says is truth never buy something that you will be struggling to pay because at the end will be the bank the owner.

  36. If you are rich buy. If you need to be rich then rent and invest the money in some thing else that makes more money because house is a liability not an asset

  37. I like the calm demeanor you have in this video. Not riding in a Lamborghini or super sports car. I could care less about an amazing sports car or mega mention but I like the basic information and advice. Thank you

  38. I like the simple and direct guidelines…they make total sense to me. Thank you for your directness……I am currently looking to buy and now I need to rethink my plan.

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