Why I Rent - Renting vs Buying a House

When you near the official retirement age will the pension asset test have any impact on if you decide to buy or continue renting? With / without an imaginary extra million.

You technically never own anything here in the states, even if your home is mortgage free, property taxes and HOA FEES have made sure of that, and with both of these entities comes with man corruption and greed, let's just leave it there, see Mitch Vexler about that, People who are mortgage free are renting just like you are

Your arguments are very sound. Renting is not throwing away money as long as you invest the difference.

Do not take this advice folks. Please. If i hadn't brought my little house id be jacked up bag lady right now. Buy the smallest house, pay it off before you buy any presents or extras, spend nothing but on your payments. Boom. Freedom. I have no rent. I couldn't live out here now otherwise. Buy a dump lol

Hi Tracey, I found this video very insightful and I think what a lot of people don't understand is by renting and investing in the stock market rather than buying a property you can actually achieve a better lifestyle faster and perhaps passively. Rental yields for expensive properties are typically lower than average/middle-class properties. If you compare the worst houses in the worst suburbs to good houses in the best suburbs you can see they cost 6-8x more to buy but only about 3x more to rent so it takes a lot of time & effort to move up the ladder buying rather than renting. Then by the time you're in retirement age you will have several millions of dollars in stocks so who cares if you're still renting in old age lol.

The owner of the house has calculated the morgage, rates, insurance and you are paying it all. It's all being paid from your rent. Yes you paying interest but at least if you paying for 30 years you will have a house that's yours at the end of it. Renting just means you paying interest for someone else. You will always need shelter. A place to live. Unless you choose to be homeless. If you decide to only keep the house for 7 years you make so much more profit due to capital growth . When you renting its like a surrogate pregnancy. You carry the baby for years but at the end it's not yours. Renting just means you paying someone else's bank loan interest for them

I think, as in all real estate, a major consideration is location. If you can be flexible about your location, renting is a lot more attractive. If rents go up, you can move to a cheaper apartment or area. (Albeit that would have been realized as appreciation had you owned. So complicated!)

My home value has doubled in about 20 years. That’s 5% earning against an average mortgage rate of 4ish. Up there. That doesn’t however include all I’ve spent on maintenance, repairs, improvements, fees, increasing property taxes, etc. I’m dead tired of having to take time and fit maintenance into my schedule. Equity means nothing until you cash out. And I can’t wait to.

But what if your done working and living off a pension? Pretty sure i’d rather be living in a paid off mortgage being stress free then still having to pay rent with no job

Hi Tracey, can we please get an updated 2024 version of this video? Thanks

Owning a house or apartments is like nightmare with all the defect costs for apartments or maintenance costs for house, high costs with low return. Investment in properties are negative if you brought it within 8 years ago.

Dumb video. Why do renters assume it's only one or the other. I own a primary residence and a sizeable stock portfolio. My monthly mortgage is less than rent so it's a no brainer.

did you parents leave you quite alot of money? how did you get such a large portfolio at a relatively young age?

Good video 👍🏽

Could you do an updated video on this in todays circumstances?

An important part you eluded to. Liquidity. You can't just pull your cash out of a property if you need it when it's already paid to the bank and well and truly gone! Yikes! Some people see owning houses as an asset. No that's what they've been told to think. It's a liability, with having to put so much money into something that is constantly deteriorating and then there's your own time too. With stocks, it's the opposite, your money is working for you, people are working for you, nothing is physically deteriorating, and you don't have to spend your time relatively to manage it (except for your due diligence and homework!).

For me is not buying, it's loaning the house.

In terms of freedom, i find there is greater freedom in owning my house because i simply lock my goods and chattels in the shed and can travel and live off the rent. I lived in Brasil, Philippines, Indonesia, New Zealand. You can get friends to house sit or an agent . As i write this ,its 2023, migration policy is crazy ,growing at a size bigger than Hobart each year. Hundreds of people line up just to rent and cost of living pressure is a nightmare.

I'm looking back in your archive and found this video. Very informative - Thank you, Tracey. BTW, the video was posted 5 years ago and you look very rejunenated. wow

I have watched this video a few times already. I am definitely agreed with you where for example you have one million dollars and you buy all in stock and on average on a 5% return per year and you would get $50000 income then this $50000 will equal to $961 per week and you could rent a very nice apartment already! Think about it the returns on stock is definitely more than buying a house for rental income

This is horrible advice. Please listen to other professional before blindly following this advice. This lady is giving advice based off of her personal experience and she is putting her fears into everyone else. I have owned my house for 9 years and if I sold it now, I would have $500K net profit in the bank. If I was renting, I would make someone else that money. I'll deal with the interest and make extra payments towards principal to pay it off early. Please do your own research before blindly following anyone in regard to anything.

Warren Buffett recently said he'd be a lot richer if he rented instead of owning his house and invested the saved money in stocks over 50 years, which makes sense and supports what's being said in the video.

Do you regret the decision to rent now??? seeing the state of the Aussie housing market now??? Do you think the housing market bubble will ever correct? and would you buy a home again ? I'm a renter and am getting smashed with rent $550 now up to $800 in 2 years !!!!

The one issue with renting is that you can get kicked out at any time and you then have the hassle of finding another place and also moving costs. So ownership gives security. But let's say you have 1.5 million in stocks, you can still keep most of that to generate income you buy a house and get a mortgage . But instead of paying rent, you are paying the mortgage and getting potential future capital gains on the house. But it does depend on the interest rates compared to the rent you are paying, and recently rents have gone up alot with high inflation. As have interest rates. Whereas stocks have flatlined.

This video validates those who are struggling to buy their own property right now.
But rent comes with their own stresses too. Since you don't own it it can be taken away from you at any time. Not to mention the stresses of finding a new (and decent) place to live without competing with many others. Rent is a physical burden rather than a financial one.

I see what you mean. I came to this video to play devil's advocate for the choice I have to make very soon - which is sell one of my properties.
Property 1 - In a sought after suburb, with a larger mortgage.
Property 2 - In a rural suburb, with a smaller mortgage.
I would want to live in P1 for the longer term, but can't afford to just yet. Once I sell P2, it would be more manageable for me.
OR I could sell P1 and pay off P2, I'd have a steady stream of income then I could go rent or live anywhere I wish.

Yes, while I have my steady flow of income from P2 (investment property), I STILL NEED A PLACE TO LIVE. Imagine - always hunting for a rental and competing with many others. So stressful! What if the landlord decides to sell your place and you have to vacate immediately? Yes you are paying more for P1 but nothing beats having YOUR OWN HOME. You're also investing in your community, moving around a lot isn't always a healthy sign. Refinance to Interest Only if need be, the property goes up in value anyway. Go live with your folks and rent the place out to save money. Change jobs if you don't like the one you have now. It's your basics and foundation, for your peace of mind.

Would love to hear you views now 5 years after you did this video....my mortgage fixed rate for next 4 years is cheaper than most of my friends rent, 4 minutes in to this video "i like to chose where i live" fast forward to 2023 and no a renter does not as housing supply is low yet demand is high, theres even a chance you will be kicked out and someone else moved in as the landlord raises rent to cover % increase on mortgage, then where does this idea of renting get you ? Livining in a car and for some thats happened, this video was done when rates were at super low figures and people thought it would never end, well that party ended. I have a mortgage, have done for years and should i have to downsize when i hit retirement i have considerable equity built into it after all those years of renting to assist a failing pension system, what will you have after paying all that "dead" money as rent ? Nothing....average joe wont be able to save or invest anymore at present as both rent and mortgage repayments have sky rocketed so the theory of cheaper to rent than buy (due to additional costs with owning) and invest that part falls apart......no im sorry Tracey, my opinion is the rental avenue is pure BS based on outdated ideas of freedom to move as and when etc and this video needs updating to reflect current financial situation.
I do love your channel though :)

Can you please do an updated video for this 5 years on to see if your views are still the same, would be very interesting and beneficial to your subscribers.

Fantastic and thought-provoking video. I have watched it a number of times. I moved from South Africa to Melbourne a number of years ago and am still renting and find most are property (home ownership) obsessed here. Lots of pressure to own. Thank you. If you don't mind me asking, are you still renting today?

Financially short sighted clowns.

Good luck I guess....

You're an absolute clown

You hit so many FACTS!!

Fully agree, I have had houses and I have rented. I sold my house and invested the profits into the stock market, in a diversified portfolio as well as other assets. Love the flexibility to move to more anywhere in the world.

Splendid indeed ❤

Very sharp woman

3 minutes in and you've convinced me, I have to rent for the rest of my life. Unless I can buy, cash.

Good video. You point out what most do not - the actual cost of the house after 25 years, once interest is factored - almost 2x based on a 500k home - as well as payments the first years are paying down mostly interest.

ive always been very unusual. when people see home ownership as a joy, i just see it as a burden, too much responsibility and i like just being free and calling maintenance when i got a problem; i don't like to be tied down to a property and dont want to go through the hassle of renting it out, i just like my nomadic energy--homeownership is a chore but like i said i know most people love it

I recently decided I would much rather own shares for passive income then either a house to rent out or to simply buy one. Passive income is king. Essentially, I'll be moving all my money into shares for dividends which will give me a passive income in the range of about 45k-90k/year - the range is quite wide since its ALL in mining stocks and they can be quite variable lol

I've owned 4 real estate properties in Canada... including a 4-plex (lived in one suite, rented out the other 3), and an acreage.

I know I am capable of owning, but I'm choosing to rent as a single physician with no kids. :)

I agree, you have more freedom by renting as long as you have a good stock portfolio and some dividend stocks. Renting gives you more freedom.

It’s a personal preference.

“If I need money, I can sell some shares at anytime, which, someone who owns a house can’t quickly get cash if they need to.”

Have you heard of a home equity line of credit, Tracey?

Another reason why renting may be better from a financial standpoint. For example, lets say you are renting a property for $1500 and you bought a property to live in that has a rental value of $2000 if you move into the property you would be losing money($500) even if you bought cash because what you were paying for rent is lower than what you could be renting your property for.

I prefer to rent because I don't like owning personal items that can't move/difficult to move. I like moving every 3-4 months so I rent short term furnished rentals that I have the option to extend my my stay(hotels, airbnbs etc).

Whether you chose to buy or rent I would like to advise you to have an exit strategy in place incase there is a black swan event and you need to move out immediately.

Love the video Tracey!

Being forced to pay a mortgage, property taxes, maintenance, and insurance/association costs EVERY month for 30 years with no easy way out is absolutely miserable. And knowing that you are paying thousands upon thousands of dollars extra in interest is complete misery. You can't just stop, move back in with relatives, or get roommates. You are STUCK with all of the monthly burden for 30 YEARS!.....I will rent and be flexible and free as a bird always.

You slow I’m sorry 😭

I am a landlord good to hear your doing well I’ll be putting the rents up knowing you have no stress and able to pay thanks

Great video.... along with great comments from the viewers. Thank you. Also I would like to ask a question that one person asked below. Maybe you didn't see the question because there is no answer. What do you think about buying a smaller property and renting it out for the cash flow. In other words, the renters would pay off for the house in a way...or most of it. Of course we need to find good renter who won't turn the house to trash. Is this a good idea? I look forward to your answer. Note: I am clueless about stock market, mutual funds and all and every kind of stuff to increase money for cash flow. I don't want to get in to those things because I am very ignorant of those things and I would be cheated very easily in those areas.

Nice voice

Still happy with your decision?