I do not think the American dream should be buying a home anymore.
Your house is not an asset.
You - Don't buy a house.
The home that is behind me right here is not my home.
I'm renting this house.
Your home is not your asset.
Your home is actually your bank's asset. If you could read a financial statement.
Houses were built for banks, they weren't built for people.
Buying a home can just be a flat-out bad idea.
And let me be very clear.
When I'm talking about buying a home, I am not referring to an investor
who's going into buying a rental property.
I am referring to a home owner
who's buying a home for themselves to live in as a primary residence.
It's a bad use of upfront capital and it ties you up and it's just not smart.
House is one of the dumbest worst investments a human being could possibly make.
For one reason, you have to pay the house, the house doesn't pay you.
And if it doesn't pay you, it's not a good investment.
If you've spent any amount of time around the real estate investing world,
you've probably run into the idea that buying a house is a dumb investment, and I totally get it.
When you buy a single-family house as your primary residence,
you normally have to put up thousands of dollars as a down payment.
And you're responsible for the annual property taxes, insurance and ongoing repairs and upkeep.
If anything breaks, you're responsible for it.
If the county decides to increase the cost of property taxes, you're going to have to pay them
or you risk losing the property.
All things being equal.
If you took what you spend as a down payment and you invested it in something else,
you probably have a higher chance of a better return
than what you would get out of a single-family house.
Sure.
Historically, the value of real estate does increase over time.
So in theory, the market value of your property will most likely go up.
However, when you factor in repair costs, utilities, insurance, and taxes
at the end of the day, your house will probably cost you more than it makes you.
But can I ask the question is renting really a better solution to owning?
A lot of the financial thought leaders and influencers say so,
but I disagree.
at the end of 2019, the medium rent for one bedroom in the United States was $1,078.
$1,078 is $12,936 per year.
This is a lot of money and what's worse is that with renting, there's literally no upside potential.
At least with the house, most likely the market value will increase overtime.
So, you have a chance of at least recouping something from your investment.
With renting though, it's essentially throwing money down the drain.
You're spending thousands of dollars a year and that's that.
Now I want to be clear.
I'm not disagreeing with the experts about a single-family house as a primary residence,
being a liability and not an asset.
I believe that this is totally true.
I just also believe renting is a liability and just as dumb of an idea as owning, if not more.
So, this leads us to a pretty big problem.
If owning a primary residence is a dumb idea and renting is a dumb idea.
What's the solution here?
Let me introduce you to house hacking.
If you can make your primary residence, a two to four-unit,
live in one unit and then rent out the others,
you are now turning your house from a liability into an asset.
You see when you have tenants that cover the majority or even all of the mortgage taxes
and insurance for a property, all of a sudden your house makes you money instead of taking it.
if you buy right, it's very feasible to get a beautiful home with plenty of room
in a desirable area and pay very little money per month.
If anything, at all.
In house hacking, there are even opportunities where rents can be so high
that you actually get paid to live at the property.
It's a huge deal.
Sure, as with anything, there are some risks and drawbacks.
In house hacking, at the end of the day, you're still responsible for repairs and maintenance.
And if you have a vacancy, you're still ultimately responsible for the taxes,
mortgage, insurance, utilities and so on.
But if you compare what you would spend in a house hacking situation
compared to what you would spend in rent or in owning a single-family home,
house hacking truly is the best option.
When tenants pay rent, they're paying down the mortgage, which means your equity
or the difference between the market value of your property and what you still owe the bank
on the mortgage is going up on somebody else's dime.
Equity is the value you have in the property.
So, if you were to sell it, this is the amount of money that you would be making
after closing costs, agent commissions, and so on.
So, without even factoring appreciation just by having tenants,
you're making a return on investment.
From a financial perspective, house hacking is truly the best option when it comes to housing.
My goal with this video is to end this age-old argument about owning versus renting once and for all.
House hacking is the best of both worlds and it allows you to have the house
you've always wanted while still being extremely smart financially.
You kind of get to have your cake and eat it too.
I hope that I've at least convinced you now that house hacking is the route
that you want to go when it comes to housing.
I really appreciate you watching this video.
Thanks.