Do you rent or own?

[biophase]

Yeah, but I still think it's better then throwing $800 into someones else's net worth. Just depends on everyone's situation, i'm personally taking the REI route. My career is also Real Estate oriented so I have ran numbers quite a bit. Just want to see some examples of some other peoples numbers.

Buying an investment property vs. a primary residence is two completely different things. So the argument on this thread needs to more specific.

I own a condo free and clear in the Chicagoland area. Even owning this condo with no mortgage, I pay $850 a month in HOA and taxes. There is no mortgage to pay down so you could say that I am throwing away $850 a month for nothing owning this condo if I lived there. However I have it rented out for $1900/mo. So now the numbers look completely different.

I personally would never buy a $1 million dollar home for myself. But, I am looking at Airbnb stats and in this area, this home can fetch $1000/night on Airbnb. So now the numbers on this home look completely different to me.

Now if we are talking about primary residence. I have not owned a primary residence for over 8 years, just been renting. If you really do the numbers and view it as an investment vs. personal feelings on owning, owning your primary is not a good deal. To the people who talk about throwing away their rent money, I challenge you to post the numbers with an amortization table, taxing savings, etc... to backup your claims. You can use 1% return on your down payment money.

BTW, here is a strategy that some of you may want to look at:
Let's say you wanted to live in a $1m home and you had $200k cash. If you bought that home, you would have an $800k mortgage at 3%. Your payment would be $3300. Let's say with taxes if comes out to $4000/mo.

Instead of buying the $1m home, you decide to purchase 10, $100k condos with $20k down each. These condos all cashflow $350/mo. Now you have cashflow of $3500/mo. Now you go driving that same neighborhood of $1m homes and you rent one for $3500/mo.

Usually as the homes get more expensive, the rent vs price of the home decreases. So you can usually get more house for your money by renting. A $100k condo may rent for $1000/mo, but a $1m home does not rent for 10x, or $10,000/mo (This is a $10k/mo rent home worth about $3m - http://www.zillow.com/homedetails/6215-E-Exeter-Blvd-Scottsdale-AZ-85251/2104391067_zpid/). So you can easily get into $1-$5m homes for much less than buying them, by buying lower priced properties to cashflow into renting the bigger homes.

 

[Vigilante]

Reminder… People that have a mortgage don't "own"

 

[GlobalWealth]

Reminder… People that have a mortgage don't "own"

Technically even without a mortgage you dont own. Disagree? Stop paying property tax and you'll find out who really owns.

 

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[jlwilliams]

I'm 43 and have owned homes since I was about 28. Looking back, I wouldn't do it like I did it if I was doing it again. I made a lot of decisions based on what my wife wanted and what I wanted for her. Fool play. We bought a house in the country, fixed it up and did another...and another. Anyway, had I bought houses based on what most people want, instead of where I like to live and where my wife likes to raise animals, I would have done much better. (rural renting is it's own insane universe) When we were looking for our first house I wanted to buy a duplex, live in one side for two years then buy another house and have both sides to rent out. She needed to have a place to raise goddamn chickens.

If you can buy property that makes you money, do that. Buying a place to live makes less sense than buying a place to rent out when you can live in other places cheaper. This is particularly true of a single young person who is building a business. Get a small apartment in a neighborhood you can live in and get it as cheap as you can. If you buy a nice house in the suburbs, by all means rent it out.

I take it you are single. If you buy a place that makes sense for one person living alone, you will need another place later and the place you bought now is not the most desirable rental. One bedroom rentals typically have turn over rates that keep you working at the job of finding tenants. (that job sucks) If you buy a nice house, you can get more renting it than it will cost you to live in a studio which is all the room one man needs.

Think of it this way. Do you want debt that makes money or debt that crumbles around you?

If you are in a position where you can qualify for a mortgage on an owner occupied house it is worth looking at it but only if you are clear on a plan of action to make money. If you buy a house, spend a year in it (establishing residency for the sake of the mortgage) and spend that year fixing everything that isn't perfect in the house and generally laying the ground work for turning it into a profitable rental that you can get great tenants into and then you will have an asset. Rent it out and move into a one man pad. If that isn't what you want to do with your next year, and you MUST be honest with yourself and know what you will and won't do; then skip it. Rent a pad and focus completely on some other profitable endeavor.

To wrap it up. Buy if and only if buying is a business move and if you want to spend some time doing that. If you do, spend that time focused on the house as a business. If you have a Fastlane vehicle you are trying to grow, don't get distracted, just rent a place. If you are looking for your Fastlane vehicle and haven't come up with The Idea that you are going to develop, then maybe spending the time working on creating the real estate asset will give you the breathing room to keep looking and keep thinking.

 

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[GlobalWealth]

I don't see a point in renting.. its like burning money

Not necessarily.

Imagine you are 27 years old earning $65,000 per year at your job. You "own" your own $200,000 home with $30,000 equity. You pay a mortgage of about $800/m, of which about $570 is direct profit to your bank in the form of interest. Of course you are getting to deduct the interest from your taxes so at a 30% tax bracket, it saves you about $170. But you still pay $400 net out of pocket.

Now a business opportunity appears offering you an income of $85,000 per year. But you have to start next week or you lose it. A $20,000 raise after tax is $15,000 at best.

You have a couple of options. Fire sale the house for $170,000 or less losing your equity (which means you were really just renting the house from the bank anyway but it inflated your ego to be called a homeowner), or keep it and pay the mortgage and hope you can find a tentant who won't destroy your house since you live 2000 miles away.

Of course if you were renting a house for $800/m, you don't have to be concerned with all of these details and your worst case scenario is that you lose an $800 security deposit for leaving before your contract was up.

This is just one example, but the point illustrates that owning minimizes your mobility and the ability to participate in other opportunities.

That is called opportunity cost. And in many cases, this is the biggest cost of all.

I had this argument with my brother a few years ago about a rental house my sister has. Its about 3000ft2 and she rents it for $1500/m. The tenants have lived there for 15 years.

My brother argued that the tenants were stupid to keep renting but my sister was getting huge benefit.

I laughed at him out loud.

Maybe 15 years ago the rent was reasonable for the house, but today it is WAY cheap.

He would be an absolute moron to buy that house. At a minimum it would cost $300,000. If he put 20% down his mortgage would be around $1200. But lets not forget property tax, insurance, maintence and repairs.

Like the ice storm that took a tree down and destroyed the deck. The tenant called my sister and she paid $5000 to rebuild the deck and repair damages.

The tenant, he sat in the living room drinking beer watching the workers through the glass deck doors.

Or when she put on a new roof while he has lived there and spent about $12,000. Or repainting.

Based on my figures, she could raise the rent another $1000/m before he should even consider the option to buy.

By renting for the past 15 years he saved at least $1000/m - which he could invest in something that caused him much less hassle and returned a decent yield.

 

[socaldude]

I rent and I will continue to rent until I can buy a home cash in another country.

I know that sometimes owning is a better option but that comes at costs that most people don't take into account such as no liquidity, losing your income, dealing with banks, property taxes, being stuck in one location etc.

My dream is to rent until I can buy a home cash and be an expat. Thinking about Cancun, Belize or Guadalajara.

We say on this forum that the fastlane is a lifestyle. Buying a home with a white picket fence, having a family, getting a 9-5 job, having credit card debt, a mortgage and a car loan is not that lifestyle. Get an entrepreneurial income FIRST then get all of those things for cash. Thats my 2 cents.

 

[Bila]

I own properties ( that i rent) ....But...i live in a rented appartment ( everything is included, no bills, no condo fees, no snow removal, 5 mn from my office ...etc) ....It's a lot of work to own and to have tenants ( trust me ) if i had to do it again, i would rent again, and focus on business

 

[theag]

I rent (a small 400€/month studio). Wouldn't want to own my own home at this stage of my life. Too much uncertainty and I hate being chained to one place. And I'm barely at home anyways, because I'm always in the office. Maybe in 10-15 years..

As an investment its another thing of course, but I'm not at the wealth preservation stage yet, so I'll think about that when my bank account is bursting.

 

[TrowelHead]

I'll add something here.

I currently own a rental property, and buying another soon

But i rent my main residence.

The reason? In my area of the UK, I can buy small apartments that rent out and give ROI of 11-13%. For example, a 50k unit that rents for 500 pcm or a 40k unit that rents for 450 pcm.

If i used that cash to purchase the apartment i live in (nice area) i would only be getting a ROI 5% (saved rent) as the cost of the housing here is way more expensive. For example 170k/180k apartment rents for approx 750pcm

I'd rather purchase a few small units "in the ghettos", and then rent my main resi - or (no mortgage, no worries if things break, no maintenance etc)

In fact, when i have a few of these units generating cash flow, i could use the monthly cashflow to rent a huge house if i wanted - but i'm more likely to use the cashflow to reinvest or use for fun / hobbies etc. And one HUGE upside is that i can relocate anywhere in the world with 30 days notice and use the cashflow from my rental units to rent a nice place there instead.

It is hard to break out of the mindset of wanting to "put down roots" and the emotional triggers we are all brought up with - the emotional reasons to purchase a home, the perceived security etc etc

I may choose purchase my resi home in the near future. Main reason for this is that it would improve my availability to finance further rental properties. But the more i think about it - the more i'm happy with my current choices.

 

[Vigilante]

I own my house in Minnesota. By own, I mean:

• it's worth $150k now less than I paid for it and
• I pay a bank every month for it (because technically, they own it)
• and I probably owe more on it than it is worth.

However, I don't care as I am not selling it (today.)

I rented a house in Florida.

• I will put nails where ever I want. In fact, in celebration of this thread I am going to just go throw a random nail up somewhere
• I change what ever I want. For the most part, I am talking small cosmetic changes. However, I won't spend much money. I might get a new door knob, change a faucet, etc... (and as Biophase said, it is all reversible). I call the landlord to fix major issues, and don't ask permission for anything else. I just do it. F*ck it. F*ck 'em. They want my money.
• I just got here Friday. Today I had a landscape guy come cut down some branches I didn't like. In a few days, he will be taking some palm bushes back 3 feet. A couple hundred bucks to make me enjoy the place WAY more. The landlord likely would THANK ME for improving his place. Most people treat a rental like you are holding someone else's fragile egg. If I am going to live somewhere, I want to LIVE there.
• We've done a lot to this place in the last 72 hours. However, you can do a ton cosmetically that can all come with you when you leave. We won't be here longer than a year or so... maybe less, maybe more. While we are here I will enjoy it.
• Renting sucks. Do does having a mortgage. The only REAL freedom, in my opinion, is free and clear title, so your only boss then is the State.
• Associations also suck.
• To the person who posted about random inspections? Absolutely not. Unless that is in your lease, tell them to get screwed.

 

[GlobalWealth]

James Altutcher says its stupit to own.

James is a smart guy and I love his unique thought processes. But remember everyone's situation is different. There is not a one-size-fits-all model.

 

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[Esquire]

Own ... for wealth protection.
Rent ... for wealth acquisition.

Mobility is important.

Plus ... the consequence of defaulting on a mortgage ... versus defaulting on your rent ... is not even close. Don't pay your rent ... lose your security deposit. No big deal. Allow your home to go into foreclosure ... and you could be facing a $50k to $100k deficiency judgment. Hell ... I even have one client right now facing a $1 million dollar deficiency judgment.

Serious stuff.

My advice: Unless you are balling in the Fastlane ... rent.

 

[GlobalWealth]

Side note. One of the most successful real estate investors I know in the US owns over 400 units (some apartments, some homes).

He rents his residence.

I would not call him stupid for wasting rent money. He knows a hell of a lot more than me about the subject.

 

[jon.a]

We rent one of our SFH rentals. It's complicated.

 

[GlobalWealth]

I wouldn't buy a single family home ever. Unless I was beyond wealthy and ready to have a family and take on that liability.

Again, this is closed-minded thinking. If you can make money from single family homes, why limit yourself?

I personally own a few single-family properties. You can see my thread here about the topic:

https://www.thefastlaneforum.com/community/threads/live-rent-free-in-multiple-countries.59964/

I will raise my rent EVERY single time the lease comes to pass. Your sister is a bad landlord and is most likely too attached to the tenants to raise their rent.

No you won't. You will raise rent every single time the market allows you to raise rent.

Do you think you would have raised rent in 2008 when the contract was due for renewal? hell no. You wouldn't have had any tenants. You would have lowered it. Probably by a signficant amount too.

I would agree my sister is a bad landlord (dumb actually, she's really good to her tenants). She should have raised the rent several times.
What I am trying to get across to you is that there is not a one-size-fits-all situation.

You are young and have limited experience. You will get it. And as a property owner at age 20 you are WAY ahead of most.

But not being open to other ideas and solutions will cost you A LOT

 

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[biophase]

I don't see a point in renting.. its like burning money

Im 20 and I bought a duplex, everyone else pays my rent and I live for free. This is fastlane because the $400.00 I was paying in rent is now going towards my fastlane pursuits and future multi family units.

This is good, but let's say you decide to move to another state. You rent out your portion of the duplex. When you get to the next state, are you going to buy right away or rent? You would not be in a good position to buy at this point. This is where you would rent for maybe a year. This one year that you take to evaluate your situation, location, rei market will save you money in the long run. You may pay $1000/mo for 12 months, costing you $12,000. But this will give you time to look for a deal, maybe decide you don't like your neighborhood, or move somewhere else. This is not wasting money, don't think like that. It is saving you money in the long run!

 

[biophase]

I own my house in Minnesota. By own, I mean:

• it's worth $150k now less than I paid for it and
• I pay a bank every month for it (because technically, they own it)
• and I probably owe more on it than it is worth.

However, I don't care as I am not selling it (today.)

I rented a house in Florida.

• I will put nails where ever I want. In fact, in celebration of this thread I am going to just go throw a random nail up somewhere
• I change what ever I want. For the most part, I am talking small cosmetic changes. However, I won't spend much money. I might get a new door knob, change a faucet, etc... (and as Biophase said, it is all reversible). I call the landlord to fix major issues, and don't ask permission for anything else. I just do it. F*ck it. F*ck 'em. They want my money.
• I just got here Friday. Today I had a landscape guy come cut down some branches I didn't like. In a few days, he will be taking some palm bushes back 3 feet. A couple hundred bucks to make me enjoy the place WAY more. The landlord likely would THANK ME for improving his place. Most people treat a rental like you are holding someone else's fragile egg. If I am going to live somewhere, I want to LIVE there.
• We've done a lot to this place in the last 72 hours. However, you can do a ton cosmetically that can all come with you when you leave. We won't be here longer than a year or so... maybe less, maybe more. While we are here I will enjoy it.
• Renting sucks. Do does having a mortgage. The only REAL freedom, in my opinion, is free and clear title, so your only boss then is the State.
• Associations also suck.
• To the person who posted about random inspections? Absolutely not. Unless that is in your lease, tell them to get screwed.

Seriously, is the landlord going to even know if the light fixture, faucet or door knob is different. When one of my tenants moved out I thought they took my fridge and washer and dryer. Then I realized that my unit didn't have one when I rented it.

I also did not realize that my units had no garage door openers. The tenants were actually getting out and manually lifting the garage doors each time. Guess how I found out? One tenant said they would renew if I put in a garage door opener and pay $25/mo more for rent! I've had the place for 10 years!! I would have put one in for free as I can't imagine not having one, especially in Utah during the winter!

So don't think that your landlord will be super picky and notice every little detail. They will notice anything that is damaged or broken, but they will not notice anything wrong with anything that is working.

 

[biophase]

I probably come at this from a much different perspective. I'm 50 years old and have lived a slowlane life and retired from it. My wife an I both owned houses in California and were lucky enough to sell prior to the crash, she had owned hers for about 19 years and I had mine for around 12 - 13 years. We both made a pretty good a profit. If we had rented all those years, we would have made no money when we were done there, but someone else s mortgage would be paid down.

It's great that you sold for a nice profit, and yes you get a nice lump sum when you sell, but did you really make money? It really depends on the rent prices vs the mortgage. Then you factor in all the upkeep that you did. Maybe if you had sold after or during the crash you may not have the same opinion. I own 4 properties, but rent the place I live in. You have to do the math to see if buying is really more profitable than renting. I have shown many friends that renting is a better financial decision than buying unless their home appreciated by $30k in 5 years.

Regarding the walls and such, there's no reason you cannot hang paintings and poke holes in the walls. How often does your landlord even come into your home? I haven't seen some of my rentals in 8 years! I have no idea and don't care if they are poking holes in the walls. A little bit of spackle and a new coat of paint and nobody can tell.

If you are renting a place for many years, go ahead and paint the walls, hang paintings and put in new lights. That can all be put back to how it was. You can price that into your rental decision.

 

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[NVaz]

Food for thought...
Why I Am Never Going To Own a House Again

 

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[Gsuz]

Can't imaging owning at this point of my life, so I'm paying about 600€ monthly in rent. Don't even know if I want to stay in Germany, not the kind of guy to backpack travel in Thailand either, but the area I'm living in now doesn't really feel like home, though I was born here. Switzerland is amazing if you want to settle down IMO, but having mixed feelings about the Swiss people. Looked at Malta in the past, but don't really like islands and the living standards are lower. Will definitely invest in properties in the future, but I'd rather focus on making more money first and then look into that later on.

To sum it up I would really make sure that the decision you make is flexible enough to be changed in the future if you aren't 100% sure.

 

[Tom.V]

Eh, I've been considering all of this recently (given I've got 4 months til my lease runs out). The main thing for me, is I do want to get into the REI game eventually, and I am very handy. Aside from that, house hacking and living for free, or getting paid to live somewhere is not that terrible. I for one like my city and housing is plentiful. What I do plan on doing is going the FHA 3.5% down path and getting a 2-4 unit property and owner-occupying it for a year (or until I can refi out of the FHA loan) and repeat. The way I see it, going this way at least, is I'll get to live rent free, and then start making money from the properties. Worst case scenario, I live for free. Beats the hell out of a rent payment, and after a little time you can get some equity built up (or you can pay it off if things go fastlane), and then you have even more borrowing ability with HELOC if need be (which, I don't know about you, but I like having more spending ability just in case it is needed).

So yeah, I'm gonna get some property.

 

[GlobalWealth]

For me, the airbnb thing is for when you're already balling.

that's the perception, but not reality. You can easily start with 1-2 apartments in different places for less than the cost of one larger house/apartment in a more expensive city like Toronto, live in them and collect rent income when not there.

 

[DeletedUser394]

Technically even without a mortgage you dont own. Disagree? Stop paying property tax and you'll find out who really owns.

arrrghh I wanted to say this!! A+

I was actually just looking up countries with no property tax a few days ago (just a one time fee). Shout out Croatia!!! (..among many Caribbean places, middle east, etc)

 

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[Quark]

Why can't you stand renting?

I probably come at this from a much different perspective. I'm 50 years old and have lived a slowlane life and retired from it. My wife an I both owned houses in California and were lucky enough to sell prior to the crash, she had owned hers for about 19 years and I had mine for around 12 - 13 years. We both made a pretty good a profit. If we had rented all those years, we would have made no money when we were done there, but someone else s mortgage would be paid down.

We rented a house for a couple of years before leaving our careers and moving to Texas, it was a nice house, but we never hung anything on the walls and did not fully enjoy our time there because it belonged to someone else and we did not want to put nail hole in the walls. The owner / landlord had a nice custom home but he was a jerk. You don't know until you are in the house, what their true colors are.

Now if I was 20 something and headed for the fastlane with no children, I'd rent too, then pay cash when ready. I was so far from the fastlane thought process back then.........it's a wonder I wound up here at all.

 

[LibertyForMe]

I dunno, I am in a different situation than a lot of you I think, but I'm excited to be buying.

I did the math, and I will be outlaying the same amount of money each month as if I were renting, but I have a better place. 3bd 2 ba instead of renting a 2 bd 1 ba. Better neighborhood. More space. Mobility isn't a concern for me, because I don't really want mobility right now. I live reasonably close to my family, in a good area, and I want to be here pretty long term.

I've got some room for home appreciation, but even if I didn't I don't care because I plan on living in this house till I can put 50% down on a big house or something like that. For me anyways, it makes sense. To rent a comparable home, I'd be looking at $1,200 per month at least, so I am saving $400 a month by buying.

 

[GlobalWealth]

No one is an appreciating rent market forever.

As for property type. The only thing that really matters is net cash yield (imo).

It sounds like a good idea that multifamily and storage would bring more cash, but not if re buyers have driven up prices.

Always look for the value. That's where you find high yield.

 

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[AgainstAllOdds]

 

[TrowelHead]

The main reason that homeownership is considered golden by most "slowlaners" is it is their only shot at gaining some wealth.

Let's say a "homeowner" who is paying $1000 per month mortgage payment. This might be perhaps 750 in interest and 250 in principle payment.

So that is like a forced savings account of 250 a month - which for most may be their only chance of putting anything aside.

If their home tracks inflation, they look back in 10 years and think "wow what a great investment"

When in reality, if they had the discipline to invest that 250 per month in a S&P 500 index tracker (for example), while renting a place for 750 a month and enjoying the hassle free, flexible lifestyle) their actual return may have been significantly higher.

And to those who say "i want to hang stuff on the walls" - just do it. Ask forgiveness not permission. If you pay the rent 99% of landlords will not care.

In my rental units - i don't care what they do. At worst, i would make a deduction from the deposit at the end of the lease to put it back to how it was. If they paint the place they are probably doing me a favour - unless it's satin black or hot pink

One final point. Not many consider the opportunity cost of the deposit. Let's say you put down 50k. You could easily get a 7% on that cash (in real estate / stocks) That would be almost $300 a month cashflow you are giving up that would offset your rent.

If you own a house free and clear, let's say it's worth $400k - your opportunity cost of having the cash tied up is $2300 a month! Sometimes, the numbers work out so that it is significantly cheaper to have the cash invested and rent (especially in areas where house prices are higher!)

Now most of us here can think of ways to turn 400k into a hell of alot more. I'm thinking real estate investing, fast food franchises, hedge funds, venture capital. For us, the opportunity cost is significantly higher than my 7% example above.

Imagine for example you own a dominos franchise. They offer you the opportunity to open a new location. Your investment of 400k will return you for example 200k per year profit for the next X years - this guy would be crazy to take that cash and buy a house.

 

[GlobalWealth]

I need something that is wholly my own.

You never own. You only rent from the govt. Stop paying property tax and you find out who really owns very quickly.

 

[GIlman]

Ok, here's the thing. Property ownership is not all created equal. When you hear someone say something like "My home is my greatest asset"...it just shows their ignorance, pure and simple. Some property can be an asset to you (more below), but you should not consider your home one (also more below).

The home most people live in is their greatest SPECULATION...you will only know IF it brings profits or losses after you sell it, and subtract ALL of your costs during the time of ownership (including taxes, insurance, repairs - sometimes extremely costly, improvements - also sometimes extremely costly, etc, etc...oh and don't forget the slap at the end of a realtors commission which is usually 6% of the sale price - paid by the sellor)...Therefore by any reasonable definition your home is wild SPECULATION...with lots of variables.

And...this does not include the opportunity cost of the capital you had locked in all these years.

You see, here is the thing. A home has no DEFINED value except at the moment you buy it and the moment you sell it. Even though you have something tangible to look at, liquidity is uncertain and the price that you can fetch for it when you sell is completely unknown.

Here's the honest to goodness truth, the only way to know the value of your home it to SELL it and see what some individual in the market will pay you for it at that moment in time. It doesn't matter what your appraisal said, or what your neighbor next door sold their identical house yesterday...

So, who care's what someone estimates your home is worth today...Markets go up, markets go down...and only the day you close will you know anything....namely what YOU got from it all. This is so similar to stocks its crazy...I mean how many people have you known that have told you how much money they had because they had $100,000 of some stock (Say AMD @ $40 a share)...but stock just like houses are not money. They are value proxies, and they are market driven. You can spend years holding them, and still lose or maybe even just break even (e.g. AMD @ $4 a share 3 years later at a significant loss - ask me how I know).

Ok, back to the first statement ... "Property ownership is not all created equal." ... the reason I say this is because it all depends on the CASH flow.

If you have a property that generates revenue, as long as that revenue exceeds ALL of your costs, then this property is an asset to you. If not then I hate to say it but this property is a liability to you plain and simple, because unless you pump IN money from some outside source this property will decay in value as an exponential pace until it is simply taken away from you.

Why, because you don't pay the bills, and people start to dump liens on your property, and each lien represents someone inline to take a piece of any profits before you do. Once your liens exceed your "equity" at sale, you my friend are under water. Oh, and like @GlobalWealth said the gov will be right inline with liens on your property if you don't pay your rent...err taxes..

So what property IS an asset, well anything that brings in positive, self sustaining reliable cash flow...i.e. excess in the bank after all expenses.

Am I opposed to owning a home, nope, I own my own (or at least rent it from the bank and government)...but I have no doubts about the nature of the transaction. Whether renting or owning, both are Expenses for personal maintenance. The real difference, then, is with renting there is no speculation component, it is a straight line expense. With owning you have chips on the table (down payments and principal payments), and when the roulette wheels stops you may win or lose some (or all) of your chips...but you won't know until the wheel is fully stopped.

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As an aside, this is insight from over 30+ years of personal experience and observation. My family has been heavily involved in RE investing ever since I can remember...I have seen countless transactions including personal residences, single family homes, multi family housing, commercial, and lots of raw land...and what I have seen over and over again is ... real estate is a market, not a hard asset...value is relative to time and the market, and you can make great money, break even, or even lose money on something you have held. And, one sudden big expense (e.g. a leaky roof or bum foundation) can turn the tables on you.

 

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