Mathew Knowles on Making First Million, Benefits of Renting vs Owning Home
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Good point. I hate these rent or own conversations because they always end up in one of two places. The real answer for mofos that actually know how to read and manage money is,"it depends". It depends on your situation. Do you need to be very mobile? Interest rates? Taxes in your area? Are you single or do you have 5 kids? What's the average return on your portfolio? Do you have an investment portfolio? I mean all this shit matters big time. But folks catering to the masses like to give people microwave solutions that don't necessarily make sense for each individual.
Depends on how you want to live
The only wrong way is having nothing to show for it after you do whatever it is you decide
The only wrong way is having nothing to show for it after you do whatever it is you decide
No wealth in home ownership, wealth is in buying property. The ROI on a house is small compared to the S&p 500. Rich people buy after making wealth and to move away from black people. A house purchased may fluctuate based on crime schools city growth. May buy a house for $200k and after taxes and interest you pay $480k in the end. A piece of property undeveloped has very few fees and well placed can grow 10 times the value in 10 years.
My example. Paid 225, 000 for a house in the Atlanta area that now appraises for 90,000. I can wait for another 5 to 10 years for the house to regain it's value, but my situation has changed, and I don't need a house anymore. Let's not even discuss all the maintenance expenses I have incurred. Could have been renting, writing that shit off thru my business and investing that bread in crypto, and would probably be up 500,000. That ownership shit can go either way especially if you are just buying a home and are not super educated. Never again. My plan is not to be in the US anyways.
If you buy a house with cash, it does bring you wealth. The money you save on mortgage or rent has no comparison. Thing is. We are always pushed toward the mortgage route, but there are numerous ways to get a house that you don't have to pay a arm and a leg for. (i.e. get the cheap shit and live in it about five years and save your money like you are paying rent every month. Sell the cheap house which will be more than what you paid for it, and use the money you saved and the house sale money to buy an good house. Shit, build one from the ground up. You will come out better.)You buy enough of these properties, then you will get rich. You buy it the regular way, yeah, you will pay three times what the house is worth. Still, it you take certain routes. Pay a few payments a year extra a year toward the principle, then you will cut the loan people out of their money. You just got to know the game. Land, they can't make any of that. So, it will always be valuable and make you income. You just got to know how to do it.
How could you write off the renting expense of a house that you are living in? I would really like to know this.
If you are upside down, then you can just short sale the house and go rent a house somewhere else.
That's $480k in tax deductions. You don't get rent expense deduction for your primary home.
U coulds also invested in bitcoin at 18k and lost half ur money
but jagu, you're a lawyer tho...that help immensely i would think. like when you gotta write up leases for your tenants and stuff, protocol on how to evict bum tenants etc...i mean, if u take a layman like me who doesn't know much about real estate law, i mean i can only focus on the maintenance part...but the other legal stuff, it's just easier for me to hire a property manager, ya dig?
Yes, you are correct. If you are a novice at it, you should get a property manager.
No its not and I've read this before. You can live in a nice apartment and keep your name free to purchase rental properties. All the tax benefits, gaining equity, and also owning stuff. A lot of people do that. For what I could spent to buy me a nice house I can purchase 2 rental properties. The income would pay for my apartment where I live free while gaining equity etc.
A lot of people got fucked like that. A lot of folks got fucked when Bitcoin was around 11k and they thought it would rise back again to 18k.
Nobody with the means and sense to buy a multi unit rental property desires to live in them unless you are financially stressed. There is nothing fun about living in an apartment when you can buy a single family home. There is also no financial advantage to it since you're occupying a unit that could be generating income. I can understand if you have to do it , yes that's fine.
Second, this is exactly what he said "I no longer wanted to live in a house that I owned. Especially with so many great apartments available".
I have real estate that allows me to take advantage of the tax breaks, but I don’t have to deal with maintenance or any of the stress of homeownership like leaky roof or plumbing.
This suggests that he does not want to live in a house with a deed in his name. He would rather go rent from somebody else but he would still own one rental property in his name.
He doesn't want to deal with his residence maintenance but he thinks rental maintenance is easier? LOL
True but I invested at 1,300 and pulled out at 16,000.
Thanks for the advise.
Yes it is easier because you can pay someone who does all that for you. When I went to sell my first home years ago my Realtor told me I could use her a person like that and she charged 10%. I know a few people who have multiple properties and 1 pay to manage like that. They never get a call for maintenance or for eviction the property manager does all the work. They just sit back and collect the rent income. I just relocated and I like the apartment living. I don't cut any grass and the issues I had the maintenance folks came and handled it asap. I'm in the process myself picking up a rental to get the same tax benefits he talked about. If I picked up a second I could be living rent free in a high end community. You really can't beat that.
Upgrade? Nah, more like a lateral move.
There was a lot of interest in the idea of owning rental properties to build wealth. Good (albeit simplistic) article from WAPO
https://www.washingtonpost.com/news...-wealth/?noredirect=on&utm_term=.76340f8ee371
Buy one rental property a year to help build your wealthhttps://www.washingtonpost.com/news...-wealth/?noredirect=on&utm_term=.76340f8ee371
To make a rental property purchase successful, owners must find a bargain — paying no more than 80 percent of the home’s value when factoring in purchase price, closing costs and renovations. But what happens when an owner wants to own multiple rental properties? How does someone go about acquiring them?
In most of the Washington area, you probably won’t find properties that fit those calculations; the purchase prices for homes are just too high. You’re probably going to have to find your rental properties in other markets to make this plan work. Or you have to leave a lot of your money in the property.
Say you had $40,000 cash and bought one property all cash, but the property was worth $50,000 and rented for $500 per month. Then you went to the bank and refinanced that property for 80 percent of its market value. That means the bank would give you back your $40,000. I estimate that you’ll make about $50 per month in positive cash flow on the rent after you refinance. Then next year you do it again, and you repeat the process for 10 years.
Assumptions:
- Purchase one property per year all cash.
- Property value is $50,000, but you pay $40,000, giving you $10,000 equity on Day One.
- Property value increases 3 percent each year.
- Gross rents stay steady for 20 years (rents historically go up significantly).
- Rent deposited into a noninterest-bearing bank account.
- Refinance the property with a local bank pulling all or most of your money out to repeat the process each year.
- Tenants pay down your debt. Debt pay-down and property appreciation increase your equity.
You can easily pick these calculations apart. I admit they’re very simplified. For instance, I’m assuming that the purchase price of the next property stays the same year after year. In five years, you probably can’t buy the next property for the same $40,000 you bought your first property. Your price will fluctuate, but the forces of wealth creation will continue to work the same. The process will work no matter what the price, as long as you buy at the correct percentages. (MORE)...
depends....and we dont know how the mom was to live with
looks-wise it may seem lateral
but we all know that in the end....looks dont mean shyt if the woman is hard to live with
Interest vs what the home is actually worth. For example if a home was purchased for $150,000 and had a 30 year note, by the time the last payment is mailed in the owner would have paid about $350,000 for that home.
Now if the home increases is value from $150,000 to $300,000 the person would have still lost $50,000.
If you are passing on your wealth to each generation than it will definitely become very lucrative. Just not may be during your life time
Short selling goes on your credit and could possibly owe the deficiencies balance which could be well over $100,000. So that could be a gamble
They put a lot of time and money into her.
got it
So pretty much those who purchased a house just because they wanted one, to feel accomplished or sold the dream of generating wealth from it without understanding real estate and learning (studying) will most likely lose. Which is most people that buy a house. Raises my hand...because that was me.
People who study and learn the game will more than likely come out on top.
like the video i posted basically if you want to make moeny you have to buy 2 or 3 houses and rent them out. live in 1
Usual BGOL basic thinking. So we are just going to ignore the fact that the home buyer got loads of tax and interest deductions, ignore the fact that he’s not paying rent to a landlord, ignore the fact that he can payoff the house at anytime unlike paying off a landlord , etc.
How is that a loss. You need somewhere to live
If you rent for 30 yrs then what?
If he’s upside down and doesn’t want it anymore, do you suggest that he just walks away?
If you have the right attorney they can negotiate the deficiency waiver as I always do. There’s no gamble.
Again, for those who understand like yourself they will do fine in most cases.
Others who don’t know or study will more than likely lose