How To Buy A Rental Property

Dave is right if the market goes down, but Dave is wrong if the market goes up. That said, no one knows which direction it is going in the next 10 years. It all depends on how much risk you want to take on. That depends on your personality.

T

If I wanted to buy a rental property in my town 400k I would need to save 40k every year to pay cash or just put a 20% down payment and let a renter pay it off

Oh yeah Dave I have like a 100k laying around I'm going to spend it all on my first house and hope for the best. It makes no sense to me at all. Why in the world would I want to put all of my eggs in one basket? Why?

For an investment property, should we avoid apartments or condos with HSO fee and stick to a single family home?

This guy^ great ideas of getting out of debt. But I've found that beyond that, he doesn't know much, look elsewhere for growing and leveraging debt/investments to continue your personal financial path. I'm always about moving forward and not stopping and hitting a plateau, put every $ to use somewhere where it'll make more $$, never let a $ sit, look at big tech business that have never turned a profit, they have billions in and out but because they have so much moving around the banks can't afford to stop lending money to them cause its making everyone a $ down the line. The way I see it on my lower scale, come to housing is, as soon as I have enough equity in one house, I pull that, put into another house and etc, yes while still working and having another income to help cash flow, but in about 10 years I'll have 12 or so houses, 2 or 3 of them paid off, and give another x amount of years, all of them paid off. Not this "pay with cash one at a time bullsh*t"

Htirp

This from a man who had loans on all his property before the bank called the loans.not everybody is YOU today.....WOW!

I don’t understand how anyone could follow this bs and get rich lol

Dave Ramsey has no modern experience in real estate sorry not sorry

How do you even get started in owning rental property?

" DoNt LeVeRaGe dEbT " .. ok boomer should people wait to pay college tuitions all in cash too?

How is this man allowed to advice people. Save till you can buy a house?
Do the math, You need hundreds and thousands of $ to buy a house good luck getting there with one job and living on it.

Also, interest rates are so low currently.

That doesn't even make any sense. You buy a house with cash you already had just to turn around and rent it out so the renters can pay you back the money you already had? The whole point in mortgaging rentals is so you can make a profit off the property and not have to put up that much cash.

If you are not 45-50+ years old and you listen to this advice I am sorry....

Does this man realize houses go for 200-300k ++++ nowadays?

I live in a place where homes cost $700,000. No average person can buy multi family property’s at that price. If I have $100,000 and I can put that down, and let my tennants pay my mortgage and I make $2,000 profit what’s the problem with that?

What a stupid advice!

Not the best advice on this video

It would take years to save up cash for one houses, now imagine trying to build a portfolio of only 5 houses yikes

THX

Thx youuu sooo much!

Sara, you know better than to ask Dave Ramsey if it is ok to borrow money, lol.

I feel like having a mortgage would be better. If you save a bunch of money and put 20% down on multiple houses you'll be able to acquire a higher net worth faster and leverage the money over waiting years to buy something in cash just a for a basic return. Most houses will only bring a couple grand a month into your pocket. 2k is not worth 3 to 5 years of savings. If I'm missing I'd like someone to reply with why I might be wrong. Thanks.

I love DR but this is such bad advice. Yikes.

At 3% interest rates, you'd be high to not take out a 20, 30, 50k loan and use them as down payments on a rental... The cash on cash roi can EASILY be 10% ... And no stock, 401k, or index fund will beat that.

I have a rental property, on a mortgage that is $727 less per month than the rent. I gross $8,724 per year and net about $6,000 per year after repairs and capital expenditures. I pay zero dollars in taxes on that $6,000 because of straight line (27.5 year) tax depreciation. I also have $68,000 in equity just 18 months after i purchased with $21,000 down. At 3.5 years of ownership i will make my down payment back. Everything after 3.5 years will be untaxed profit. Over the course of those 24 years i will have profited $144,000 of untaxed net proceeds. Over the course of the next 24 years, assuming real estate appreciates at only 5% per year, i will have accrued $890,000 in equity. If i cash that out and the government takes 40% then i will pocket $534,000. To review, if the rent on my home NEVER goes up, and real estate ONLY appreciates at 5% per year, and I NEVER reinvest a penny into the stock market, after 24 years i will have $678,000 (minus agent fees) for my retirement.

I agree with this, but the most I've paid for a rental was $50k and I bought them all right after 2008.

Disagree. Thats why he suggest people to invest in mutual fund instead of passive income real estate.

i am 16 and i don´t know how much i need to save and also i thought opining up a mortgage was a good idea if you´ĺl rent the house out

How do I save 500k? Los angeles is full of $h!t

Is the Boston area a good area to invest in Rental properties?

I wonder, if Graham Stephan has more equity in rental properties than Dave. thoughts or stats?

This advice is not current at all. Agree on snow ball effect but this is not considering that this person could lose a job etc. Best is to mortgage and try to pay that off by putting the cash flow from it back to pay the mortgage ASAP. This way amount you risk is only your down payment. You can still keep your retirement contributions too.

On the otherhand there are multi millionaires and billionaires who have everything thanks to lending their money from the rich until it’s their Money... of course you shouldn’t put everything you have on Real estate because if it doesent work you are likely to be in debt for many decades

Dave told someone not to borrow money? I was genuinely surprised...

Great video Dave

Dave is the no debt guy that's his niche...fair enough but for real estate if the tenants are paying the debt and you still get some sweet profit I don't see why you should wait 10 yrs to get a rental just to pay cash for it

Can't wait to be able to rent out a property 🙌

Lol rates are record low this guy has no clue

Thank you.

This is horrendous advice. Don't listen to him.

Dave I respect you, you’re very intelligent, other rich people teach you the exact opposite when it comes to rental properties!

Thanks very much for the advice! The real estate is very expensive in my area, around 500k for a condo as an investment property. If I can save $50k a year, it will take me 10 years to save enough money to buy it. But after 10 years, the same condo will appreciate a lot, and I will not be able to afford it at that time. What should I do?

I’m taking out a mortgage for an investment property. I’m sorry but we JUST don’t have the discipline to save but are excellent at making payments. All of the years we spend saving, we could be accruing capital.

I would never pay cash for a rental property. I have had rentals for years, and the typical pre-tax return is 5% capital appreciation and 2.5% income. Very similar returns to dividend stocks, which are a lot less expensive to buy, sell & maintain. It's only the leverage of a 20% down mortgage that makes the rental property anywhere near worth the time and expense involved.

Till the government take 40%

So I’m 20 are u saying I should save 150 to 200,000 cash to buy my first home bc that can’t be right that seems like the slowest possible way definitely safest but definitely slowest

This is just dumb --- I'd recommend just paying off your house and just forget the rental property --- I see no reason to buy the house cash unless its dirt cheap and you already have the cash

THE TRUTH: Real estate is not for everyone. I purchased my first house at 20 years old, my 2nd at 22 while living with my parents. I sold them to get married. A carpenter by trade, I built my house, refinanced it and purchased 2 4-plexes. 50 years later, I have 30 units, purchased with 30 year loans and 25% down. I would not recommend property management because they will eat up your profits at 12% in Oregon. They charge $65 per hr. for basic repairs. I also do plumbing, electrical,drywall and painting. Starting out, you will need to do all the repairs yourself. With my 6 4-plexes the rent has gone up enough that with 2 units empty in one building they still make the payment. It has not always been easy, but it still has been worth it. I quit working for the man at age 50. Yes I still have 9 mortgages with 13 properties and a net worth of 4.6 mil. My friends are broke but refuse to do what I do. You have to put in the time. Good luck. That's the truth.