Why Owning The Home You Live in is a Terrible Investment
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Why Owning The Home You Live in is a Terrible Investment


100 thoughts on “Why Owning The Home You Live in is a Terrible Investment

  1. We sold our primary home back in May and cashed out of the market! We are now renting, even though we own 2 rentals in other markets. Huge bubble up here in the Toronto area, that's why we are seriously considering investing in the US and other markets now
    .

  2. Morris, you said you live in New Jersey. What state(s) do you typically buy rental properties in where you manage to use the 1% or even 2% rule as an investment limit?

  3. Of course You're talking about USA where lifespan of typical house is like 50-70 yrs before it renders into ruins just in time when you will finish paying Your mortgage. In some countries You build house that will stand for hundred of yrs. Another thing typical for USA is property tax based on property value, which naturally promote renting. In some developed countries there is no such tax, You pay small property tax according to space no to value of the house, which makes owning house much more sense – you can rise its value without need of paying more tax because of that, You can build great house worth million of dollars and you will pay the same tax if it would be shack. So Yes – owning home in USA doesn't make much sense until You are millionaire.

  4. If you rent an equivalent home, wouldn't the rent be more $$ than the mortgage/taxes/insurance, etc.? From a cash flow perspective, does it make sense?

  5. worst investment than owning a home is paying rent to someone else on a permanent basis, that for me is the same than throwing your money to a trash monthly…….. after the rent period ends what is the ROE???

  6. One suggestion. Lower your background music while youre talking. You can have it at then beginning then lower it as you get into topic, then raise it when youre abouy to finish. The music is not as importany as what you have to say. It takes the focus away.

  7. Morriss invest
    You were right on the alot of trouble part. I have spent an hour going thru comments and replies and i understand your thesis owning a home is a bad investment for your dollars vs having rental properties that are cash flowing for those same dollars. Very true. But taken in context is important. Many replies have focused on parts of your statement or compare apples and oranges. Ask me about rental property that has negative instead of positive cash flow. Ask me about bad vs good tenants. Aske me about family or quality of life questions on owning vs. Renting. Ive got all those experiences to reflect on. However staying in context with your point it is a bad investment for your money now to own vs using same money to acquire a poistive cash flow thru rentals. I am currently blessed with more experience than money and have owned first a duplex then a single family. I now rent. I am looking to improve my situation and came across your videos.
    Kudos for the contrarian statement which now i can agree wholeheartedly.

  8. Guy owns home, answers to nobody, no endless repairs to multiple properties and always the Tennant hassles, legal issues and on and on. Been there done that. Consider yourself extremely wealthy in many ways when you OWN.

  9. The house im gonma buy in the future is 1.5m 🤣 ya. I need to own my home. I plan on having a lot. So. Is gonna happen xD. Its an aquestrian mansion. But i plan on having a lot going for me. Hotels being one of them.

  10. I appreciate the food for thought, but there needs to be more discussion from the other side here. You have a down payment saved, and you need a place to live! Why not start cash flowing equity on that house instead of renting? Owning your own home gives you the freedom to decide what needs to be done. With the money you save from paying a mortgage rather than rent, you could hire a handyman for any little thing that goes wrong. Also, good luck bringing your landlord to heel if you need something fixed in the rental you live in. Interesting points, but I'm not renting out my house only to move out and sign a lease.

  11. Very interesting comments and good video. There's a difference in opinions I assume mainly due to the life experience/age gap. Older or more well researched individuals who know more about previous boom and bust cycles, interest rates skyrocketing, low dividend yields, shares losing 90% of their value, housing areas that never did get regeneration, tenant issues…..

  12. This is about OPPORTUNITY COST- what you could have done with that huge down payment money. It is not a logical argument for owning vs renting. It is never cheaper to rent than own the same house, all else being equal and assuming you plan to live there long term. Otherwise landlords wouldn’t be able to profit over and above the costs of home ownership.

  13. This is only practical if you have saved a down payment large enough to purchase rental property.
    Bottom line, If you paying $700 for rent, then your only winning if the cost of maintaining the property is over $400 a month had you bought it; the interest difference incurred. It is generally much wiser to own your own home, only someone with a bunch of rental properties sitting empty would tell you that renting is better in the long run.

  14. As a renter, your paying the cost of the taxes and repairs as part of your rent. In the end, you own nothing. As a home owner, you end with an asset. Morris invest clearly needs more renters, and this is their approach to convince people that renting is wise… dumb.

  15. The companies like Morris Invest, that rent property… they are owners of those properties. So if owning was a bad choice, why would they own??? Exactly.

  16. Good food for thought! Although in the UK the be able to get a mortgage on a buy to let you must first own a property i.e a residential one. Is it the same in your country?

  17. Hey there Clayton, what are your thoughts on renting the home you live in FROM your LLC?
    Follow up question totally unrelated… How Can I leverage the VA home loan program?

  18. Robert Kiyosaki book He said a house you live in is a liability because it does not produce any income where are rental properties produce rental income. He also said in a book an asset put money in your pocket, a liability takes it away.

  19. Why not buy the property under your LLC and rent it to yourself? But you will need to charge the minimum just to meet the ROI. And also because of the income going to the LLC you will increase income to the LLC. But you can write all repairs , insurance and deprecated value of the property. But in the state of Florida the buyer get $25,000 homestead exemption. Can write off property taxes, insurance, points, and if you have a second mortgage on the property, you can write off the interest paid on both mortgages. This reduce your federal taxes on that property alone. All the write offs should cover your repairs. If not, you made a BAD Investment on the property for purchasing it.

  20. 🤔
    This is a sounds argument, but one that works on a few elements.
    -you have over $50,000 saved up.
    -your rental properties don’t need repairs.

    I’m not a huge fan of the Kiyosaki message as I feel that much is left unsaid.

    Sure, if you have $100,000 saved up, you could buy rentals and just rent them out. The money from the rentals could cover your rent and maybe even rebuild your savings. I’m also working on the idea that the cash flow from these properties would cover emergency repairs.

    But . . .

    People generally get a loan from a bank and the down payment isn’t that big. In this same scenario, you’ve bought two properties that are paying for themselves (against the principal of the bank loan) and you are still having to pay rent somehow.

    Home repairs are generally not that expensive that one cannot do themselves, but when they are, they are very expensive across the board, even on rental properties, right?

    I like the idea, but it sounds like it is a great idea when you have capital saved up.

  21. Wow; Yes; your home is a non performing asset. If you want to sell in New Jersey and move to Southwest Florida, look me up at Keller Williams Real Estate, Naples. Mark S. You can get value here and taxes are reasonable not to mention the constant sunshine. You and your wife Rock!!

  22. These are TRULY the best real estate videos on YouTube. Thank you for giving us DETAILS not fluff like everyone else.

  23. Hello , i own a rental property in abington pa , its a mixed use property with and 15 car parking lot a hair salon approx 1500 sq ft , then above the salon a 2000 sq ft 3 bedroom apt , and below a smaller 2 bedroom apt 650 sq ft , and i also rent out a 2 car garage , to a contractor , Im conflicted on if i should sell the property , or keep it for rental income , i now occupy the smaller 2 bedroom apt , but thinking maybe i should rerent it again since it can get decent rent , ? confused ? thanks

  24. We dont own our home. We rent a nice comfortable house for cheap. We were saving up for downpayment for buying a home. However after finding your channel we want to buy a rental property instead. Would we be able to refinance a rental property with a bank if we have never owned a home?

  25. I'd still rather own my house and nobody should look at their house as a business. Sure its nice to build equity or make a profit when you sell but your home is for family enjoyment and not generating income. This is the family place and we built the kitchen, baths and other rooms they way We want and enjoy it without tenant restrictions. I don't want a duplex or two family home where i live upstairs and the tenant lives downstairs. I owned a two family house with a tenant when the family was starting out to make finances easier but now we don't need that and I want nobody above or below me, i don't want to hear arguments or toilets flushing. At least when i leave , i leave with something. If i was renting, I leave with nothing.

  26. My opinion:
    1. background music could be lower…
    2. To choose from 2 options (option1: pay rent + buy rental property, option2: buy home for yourself) it depends if You want to be an investor or not. In my opinion: From financial point of view it is better to want to be. If so, then it is clear that better is option1 (pay rent and buy rental house). The reason is: if You want to be investor You have to do it in the right order. First rental properties and after home for yourself. But if You do not want to be an investor (requires a lot of work) then buy home for yourself, but then You might be financially in trouble later on.

  27. I would agree to this except when you are raising a family. It is difficult to rent a nice home in a good school district in Chicago. Obviously I agree you are making a bad investment if you are just considering making money but we are also making an investment in the community and raising the children. The problem with many of these ideas is a balance between money and community. The reason that the US grew to be one of the greatest countries in the world is because of the idea of community, charity, God,…etc. Focusing purely on wealth is a mistake which other countries have fallen into. You will end up with a country where there are two classes – rich and poor.

  28. How about just buy a cheap house outright such as a mobile home on your own land. That's the best of both worlds; low maintenance, low taxes, and low utility costs and then take the extra money (instead of paying it in rent, mortgage, thousands of dollars in taxes) and invest it in rental properties.

  29. Many have said this but I will say it again. The main argument to why to rent is that you are responsible for paying the rent and maintaining the lawn and fixing the house. Well as an investor it should be known that there is still cash flow after all of this is accounted for and therefore that cashflow is coming out of your pocket. Atleast when you own, the equity comes back to you.

  30. Depending how u invested all investment had risk alway do your homework before investment . Back old day down town jersey city sold for $ 1 dollar per house plus fee or unit now is 1.5 million up 4 million . 2 story house in NJ can earn easy 5k a month but tax in nj very high still profit . But all investor have up n down no one perfect .. I live in one unit I rent out one . Doing ok

  31. Having 272- 570 doors I would think would be like having a passport ( a lot of money) to travel the world. For me that would mean being around maybe 2 or 3 months out of the year, at this personal /private home. Paying rent for a home to live in with portfolios that large would be no big deal ( one drop of water 💧 in a bucket).
    I guess it would come down to personal preference, because if one wanted to buy a home to live in, one could include the cost, i. e. mortgage, tax insurance, maintenance etc. of buying their home in their freedom number.
    Me personally I would like to own a modest green home; secluded on a nice amount of acres. A green home that I could easily pay off in no time. The design would include minimal upkeep and modernization that would allow me to monitor the home even out of the country.
    This home would be stocked with non perishable foods, tools, equipments, transportation ( off road and on) and anything else I can think of to protect my family. After all that’s the reason I am getting into real estate to “SHIELD” my family from any financial woes and or anything else that this world may throw at us. All while enjoying the life we dreamed of.

  32. Speculation on the place families live in is outright immoral. Get a real job, learn to do something useful for others and society at large. Vet, dentist, hygienist, teacher, bus driver, street cleaner, entertainer, farmer, plumber, statistician, cook, even priest or personal trainer for God's sake. Anything that is worth being called a useful job. Buying houses to sell them for a profit to people who cannot afford it or speculate on let properties to keep others from ever being able to set aside enough to buy a roof over their heads and those of their children is a disservice to us all and morally wrong. Where would all be if most people thought and acted like this, can you imagine it?

  33. I rent the home I'm in, as I'm in a great New York neighborhood in a rent-controled apartment. I have an investment portfolio of several hundred thousands of dollars that's managed by an excellent financial advisor. My impulse is just to stay where I am, not buy property at all, but rather let my portfolio grow. I also enjoy (and, frankly, need) the extra liquidity that I have. I know you're a real estate investor, but, thinking objectively, am I OK not tying up my money in brick and mortar, especially given that I'm an in a region where the cost of property is astronomical?

  34. Yes but all these rentals need repairs too and you are the owner ,guess who is doing the repair.
    You are not fixing the one you live in but you are for all your rentals.

  35. This is a tough subject for me. I hate paying taxes at the end of the year on something that is paid off so have thought about renting plus property tax and flood insurance. I hate it.

  36. Hi Clayton. Yes I agree it make more sense to invest in multiple properties. Or do a duplex and live in one part for a start. I am presently still renting and is in the process of looking around to purchase my first rental single family property. It's a little late in the game but I'm doing it anyway. You will be hearing from me.

  37. so is it a good Idea to sell your home to your LLC and then rent it back from the LLC? so this way you can get the depreciation at least or is that a quid pro quo setup?

  38. Amazing concept I never thought of. Yes owning is great but it's expensive. 14 rental properties 3 could pay your rent the rest is income. I'm seriously going to look into this once my house is paid off and I plan to rent out.

  39. My take on the own your home & yes I also currently own my own home, well & the Bank owns it. So to say paying taxes is a downfall is kinda like saying paying rent is a downfall because your landlord has to pay taxes. That's kinda like saying a customer don't pay for material in my Drywall business… Of course he does, i charge him for the job, which pays for the material that i purchased to use on his job.

    Here is the #1 reason to buy a house or rent IMO… Do you know how long you plan on living in the house? If your only going to live there for a short term or you don't know how long, then you're better off renting, as you have to pay Closing Costs when you buy a house! Which is a big expense… in that case you Buy Your Own Home Only when you know you are going to stay Long Term, which makes Cent$ & Dollar$ to pay for closing costs.

    That's looking at it from a strictly financial perspective.

    Of course you could always buy a duplex or 4plex or 6plex and house hack,
    but if you want to live in a SFH, then in order to house hack you would have to
    rent out a room(s). Or a loft area above your garage, etc. etc.

     Thank you for the great vid!

  40. If you rent a house you have to pay rent every month which doesn't even go towards anyting, another words is just like interest. let's just say your rent is 800 bucks it will be the exact same as paying 800 bucks in interest. But if you live in your house you can turn it into a performing asset by taking out a home equity line of credit and then buying another property for rent. Not to mention your house can build up equity. Maybe once you've become extremely wealthy renting is probably the best thing to do. But if you own your home outright you can pay a lot less then you can renting because then all you would be paying this your taxes and insurance… That's my take on it

  41. AAA… I AGREE… VERY HAPPY YOU ARE ABOARD WITH THIS MESSAGE. UNCLE GC HAS BEEN SINGING THIS FOR A LONG TIME. APPRECIATE ALL YOU BOTH DO FOR YOUR LISTENERS.

  42. The music is mixed too loudly Over The Voice please keep that in mind for future videos particularly bad on headphones

  43. Here is when renting gets bad, 1) your landlord wants to sell the property that you live in. 2) Bad landlord- doesn't respond to repairs quicklly. 2) you are still paying home taxes inderectlly- though your rent ( home taxes go up= your rent go up) 3) You can't make any changes in the home you live in or you will be held responsable for it. 4) If you get evicted you have 30 days or less (wth nothing) to move oppose to 60 to 90 days with some money coming back to you in your equity. 4) You can upgrade your home- can't upgrade your rented home. 5) you can leverage your equity in your home…can't do that in a rented home. Therer is more you can do by owning a home than you can by renting. Also who saves up 200,000 $ for a down payment on a 5000,000 house? His numbers are not pratical. And the way this present job, housing, econmonic, etc markets are, you really shouldn't trust or go on with what him or any other millionair says. I bet anyone a dollar to a donut that this guy can really afford to quickly move out of his rental mansion….can you? And besides, what idiot buys a 500,000 house, who isn't a millionair? If I had that kind of money, I would buy a farm.

  44. Strictly financially speaking, renting is the better choice. But you cannot ignore the emotional/personal needs aspect of this. The freedom of not having a landlord–to be as creative as you wish with the property. The flexibility of living where you want to live, in the neighborhood you want to live in, in the school district you want to live in. What is all that worth to you? Having a place to put down roots. The "Old American Dream" as I have read it here, is still alive, and still has a lot of value (Other than financial) to a lot of people. So, I think it just comes down to making a personal choice. It's not always ALL about money. 🙂

  45. It may not make the most financial sense, but I enjoy owning my own home. I'm looking forward to paying off the mortgage some day just to see what it feels like.

  46. If your rental properties have issues..aren’t you as the landlord responsible for the damages as well? I have always known I did not want to be tied into a mortgage on a home, but doesn’t the same apply when you purchase rental properties? Just looking for some clarification cos this is a very interesting topic.

  47. Flawed logic, of course u want to own your home, no mortgage payment, escrow, mortgage company fees, interest etc. Own don't rent!

  48. So, what about the rental properties. Do you not have to pay taxes, plumbing and other fixes for the tenants in all those properties? I'm new to this so I'm just asking.

  49. But why can't you own a home, pay the mortgage, and rent out other properties to tenants for additional income?

  50. I agree. I’ve heard RK talk about this. But renting is also an outlay of money. The only thing u can do is own a house and rent part of ur house out to cover it all; or own a house outright with no mortgage.

  51. I think that is a poor miserable mentality to go to the extent to rent instead of owning a house of your own!
    People who think this way don't realize what LIFE IS ALL ABOUT!
    We get to live just once, so if you want to own your house and live in it do it!
    If you want to rent and have some one tell you what you can and cant do well then be below them!
    Me personally l like what the book "the riches man in Babylon says. Own your house! Now days landlords are pain in the neck some times nonetheless is all in the eyes of the beholder

  52. Think of this if you rent that money you NEVER SEE IT BACK IT ALL GOES AWAY FROM YOU… if you buy your own house all those payments become your along the way you make that money back if you sell it but if you rent fir so many years you wont see any of that money back ever!!!!!!!!
    Rent is nonesense!

  53. Great… So where will you be living whilst you rent out your two rental properties? Paying rent? or a tent? Fucking stupidity!

  54. I think a lot of it is risk tolerance. I'm paying off my places as I live in them and then renting them out. Slower process but much smaller risk.

  55. Banks outsmart the average buyer by a huge margin. With amortized loans people pay their interests first which means you need to wait 20 years (out of 30) to own 50% of your house. But the average person moves ~10 times during their life, new job opportunity, change of scenery, life happens… If you move after only 10 years, not only did you pay the closing and agent fees + taxes, the recurring taxes, repairs, and the down payment which is money you can't use anymore but on top of this, you own a whopping 23% of your house (instead of 33%). The bank already made 10% of the value of your house in interests, they made really good passive income thanks to you.

    Owning also means that you are stuck in the same place, you cannot move or upgrade/downgrade depending on your financial/family needs or adapt quickly to things that happen in your life. Are you sure that 30 years from now you will still be living in the same place? In the world we live in, it's very unlikely which makes the banks the massive winners of this story. Every year, they spend billions of $$$ in ads to get you to buy a house and already convinced many of your relatives to do so I'm sure…

  56. Renting his beach house and not have to worry about repairs or taxes. He still has to worry about repairs and taxes on his 200 rental properties. And he can't paint or modify his rented home the way he wants

  57. So basically your saying we should own other properties and rent them out and when it comes to our home we should rent from a landlord….so when we rent ate properties out we will be paying the mortgage and the property tax too right

  58. I rent in a million dollar plus neighbor hood. My rent is $3000 per month. To buy this home and pay the HOA, Prop Tax and insurance is still 1400. Tack on a mortgage and I would have to pay 7000 per month. So if I save $4000 per month for the next 30 years by renting an equivalent home I would have 1.4 MILLION DOLLARS extra!!!!! And then if I compounded that along the way by buying rental properties (which I do) then you can pretty much more than triple that amount. So do I want 5 million dollars in 30 years or my personal residence paid off. Im gonna go with 5 million 🙂 easy math…………..PLUS the freedom to move around if I want.

  59. Owner occupied loans have cheaper interest rates and lower downpayments. Why not house hop each year when your one year of owner occupancy is up and turn each one into a rental?

  60. Clayton, MOVE to OHIO. Your 2 million dollar house (hypothetical) you get in Ohio for $500K. Get wayyyy more house here. My $250K house has 3000+ sq ft is probably worth over 2 million in California

  61. but wouldnt you still be "running to home depot" and maintaining your investment properties? or would you hire a property manager or is the maintenance the responsibility of the tenant?

  62. My opinion is your house is a liability, but you should still buy one to live in because you'll be paying the same price as renting and still end up owning a home

  63. What if you own your home…but because you intend to keep it forever…live in it and rent it out later when you move?

  64. Who maintains, pays taxes, and fixes up the multiple rental properties. I agree with the positive cash flow etc. but you now own the headaches generated from the tenants in your performing assets as well. 🤷‍♂️

  65. The home you live in isn’t an investment, but you have to live somewhere. So, if you don’t want to share your home with tenets, your two choices are to either rent or buy a home. I’d rather buy because, once it’s paid off, you only have to worry about upkeep, HOAs, and property taxes. I plan on buying up townhomes and renting them out.

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