I have a question about renting an apartment.

[MyNameIsHammurabi]

I was watching some videos online and I’ve been being seeing a lot of people taking about how a home is a horrible investment and you should rent. At first I thought it was horribly dumb because mortgage on a home you live in is cheaper in many places than choosing to rent.

Now we get into the good part. This is what blew away my mind. It’s third grade level math simple. You buy a home to rent out and you use the money made from the property to find cheaper rent.

An example would go something like this

Home A 200k mortgage (investment)
you get a rental income 2k a month or 12% yearly return

Home B worth 400k (where you live)
you rent this place for 1500

Profit = 500

if you do this home ownership makes no sense. you can get a nicer place for less money, make a profit and have the added bonus of moving if you want.

do you people see any flaw in this logic?

 

[Original]

too many words

 

[MyNameIsHammurabi]

too many words

 

[Kaz]

My friend bought a house. Immigrants moved to his neighborhood. House is now worthless. 10 years in debt.

 

[Renko]

Home B worth 400k (where you live)
you rent this place for 1500

Profit = 500

im a fincancelet but i dont think that 400k means much if you dont own it and cant sell it. its not a part of your net worth

also the the landlord has cringe rules.

 

[MyNameIsHammurabi]

im a fincancelet but i dont think that 400k means much if you dont own it and cant sell it. its not a part of your net worth

also the the landlord has cringe rules.

you get the perk of not being tied down. Landlord rules are cucked. If you do it right you can get a much nicer home.

 

[Fontaine]

I was watching some videos online and I’ve been being seeing a lot of people taking about how a home is a horrible investment and you should rent. At first I thought it was horribly dumb because mortgage on a home you live in is cheaper in many places than choosing to rent.

Now we get into the good part. This is what blew away my mind. It’s third grade level math simple. You buy a home to rent out and you use the money made from the property to find cheaper rent.

An example would go something like this

Home A 200k mortgage (investment)
you get a rental income 2k a month or 12% yearly return

Home B worth 400k (where you live)
you rent this place for 1500

Profit = 500

if you do this home ownership makes no sense. you can get a nicer place for less money, make a profit and have the added bonus of moving if you want.

do you people see any flaw in this logic?

How would you rent out a 200k home for 2k a month and then rent a 400k home for 1500? Feels like I'm in 3020 rn

 

[jaded jabble]

I see

 

[FeminismIsCancer]

Rent usually doesn’t cover a mortgage payment or nobody would rent and you could theoretically buy unlimited properties that repay themselves. Well some property tycoons actually did this but you need connections and insider knowledge, and a decent amount of luck.

 

[Sorcerer]

I was watching some videos online and I’ve been being seeing a lot of people taking about how a home is a horrible investment and you should rent. At first I thought it was horribly dumb because mortgage on a home you live in is cheaper in many places than choosing to rent.

Now we get into the good part. This is what blew away my mind. It’s third grade level math simple. You buy a home to rent out and you use the money made from the property to find cheaper rent.

An example would go something like this

Home A 200k mortgage (investment)
you get a rental income 2k a month or 12% yearly return

Home B worth 400k (where you live)
you rent this place for 1500

Profit = 500

if you do this home ownership makes no sense. you can get a nicer place for less money, make a profit and have the added bonus of moving if you want.

do you people see any flaw in this logic?

Or you could get a LogCabin in a forest. (If pigs don't arrest you for "breaking the law" trying to be free)
Tbh THE ONLY DOWNSIDE to being a "Mountain Man" is the Internet. If I could have good internet and burritos I'd live at fucking high altitude as long as it didn't turn into Everest.

 

[MyNameIsHammurabi]

How would you rent out a 200k home for 2k a month and then rent a 400k home for 1500? Feels like I'm in 3020 rn

I’m not an expert. Apparently rent has no correlation with the actual home value. You charge what the market can bear. If you bought a property in a really hot area and everyone around is charging 2k you can do the same. Vice versa if you bought an expensive home in an area that people are moving out of you can only charge what the market can bear which may be 1500

 

[MyNameIsHammurabi]

Rent usually doesn’t cover a mortgage payment or nobody would rent and you could theoretically buy unlimited properties that repay themselves. Well some property tycoons actually did this but you need connections and insider knowledge, and a decent amount of luck.

I know folks who have been buying 150k homes and charging 1500 rent. If you had a million dollar loan. You would be better off buying 6 units at 150k. Using the rental income from those units to rent a million dollar home that charges 5k.

 

[Eren]

with buying the house you get to own it at the end which is a massive difference.

 

[FeminismIsCancer]

I know folks who have been buying 150k homes and charging 1500 rent. If you had a million dollar loan. You would be better off buying 6 units at 150k. Using the rental income from those units to rent a million dollar home that charges 5k.

In theory it sounds cool but in practice many countries have cucked laws that protect tenants who can’t pay from eviction. It’s even worse if it’s single hoes with kids.

 

[MyNameIsHammurabi]

In theory it sounds cool but in practice many countries have cucked laws that protect tenants who can’t pay from eviction. It’s even worse if it’s single hoes with kids.

yeah definitely a cool life hack but you would hack to check if it applies to the market you are looking at. Not every single place has cucked rules.

with buying the house you get to own it at the end which is a massive difference.

yeah with my theory at the end you eventually will get to own your investment property. You are building equity either way you choose. The only difference is that you are getting paid from the home.