Should you buy or rent your home? 🤔 Why The American Guru's Are Wrong
Rob Moore argues that buying a home beats renting, especially in the UK, where house prices grow 12% annually and double every 12-15 years. He explains how mortgages build credit, capture capital gains tax-free, and become cheap debt at low rates. Renting, he says, is dead money with no control over your space.
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I get asked all the time whether you should rent your own home so that you can invest into assets with the money, or whether you should buy and own your own home. Many of the American influencer content creator real estate investors say that you should rent your own home and then use the money that you would have bought a house to invest into assets. They say that your own home is actually a liability. They say that because it doesn't put money in your pocket, because you don't get rental income, it's a liability, not an asset. You shouldn't own your own home. You should rent your own home. That is what they say. That is not what I say. I do not agree with that strategy, and I'm going to explain why right now. Now, I have 1,550 tenants. I have hundreds of properties. My portfolio is worth tens of millions, and I own my own home. And sometimes when I see people who make out that they're successful, but they rent a house. It sort of makes you think, can't you afford a mortgage, or can't you afford even to buy your own home? And I'm like, what? Come on, really? So I have to dismiss half of them because they can't even afford to buy their own home, yet they're a guru. Now, one thing I will say before I give you my thoughts is that it does vary country to country. So if you, for example, are in America, generally the growth in America in properties isn't quite the same as the UK. The tax breaks are different. Certainly, um, owning homes in Europe, there's often years or decades of virtually no capital growth. So that might be different. So check your area. But I live in the UK, and I believe it is far and away better to buy your own home than to rent. And here is why. One, you have a mortgage and you can increase your credit score. You need a good credit score to get mortgages and good credit. That's reason number one. Reason number two is You can never make a rental a home. So you get a rental, you can't spend any money on it. Any money you spend on a rental, you're basically giving it to the landlord. I'm quite happy when my 1,550 tenants want to spend money on my house because it's my house. Now they think it's their house, but it's not. It's my house because I own it. So you end up spending thousands on a rental. You have to. To make it, um, you know, how you want. So that money is all dead and wasted, um, or you don't spend any money on it and you just don't even enjoy it. The next thing is that in the UK, properties consistently go up. The property market went up 12% last year, 1% a month. On a £200,000 house, that's £24,000 in passive capital growth. Now, in the UK, property market— the property market pretty much doubles every 10 to 15 years. Let's say 12 to 15 years, you know, on the low side. So if you rent, then— ah, to add to this, all rent is dead money. Not all mortgage or house payment is dead money. So if your rent is £1,000 a month, that's all going to the landlord. If your mortgage is $1,000 a month, then a few hundred of that is paying down your mortgage. Of course, the rest is on interest. So you also own an asset that goes up in value, whereas if you rent, then the landlord gets the appreciation in value. Now, the next thing— I interrupted myself. I'll come back to— I'll cover all the points. And by the way, some of you are disagreeing with me. Everyone is entitled to my opinion. Now look, if you disagree Put it in the comments, let me know your thoughts. I like you all to discuss and debate here. I believe in free speech, um, but I also believe I'm, I'm right about this. In the UK, any capital gains tax you make on the sale of your residential home is capital gains tax-free. Now, in the UK, capital gains tax is nasty, it's a lot of money, but if you buy a home make money on it, sell it, and move into a nicer home, then you don't pay the capital gain. So you essentially trade up, trade up, trade up, go from a $200 grand house to a $500 grand house to a mill house to a 5 mil house, and you don't pay any tax. No tax. That is massive. The money you put into extending or or making your house really nice, you're going to get some of that back. The money that you pay in your mortgage, you're paying your mortgage down. The next thing, and people don't understand this, interest rates are still very low. Sure, they went up, but they only went up by 0.25%. So Mark and I have loads of mortgages that are 0.5%, 1%, 2%, or 2.5%. That is virtually free money. It's not free-free, but it's virtually free. Long-term rates of 5-6%, the banks had their margin on. Long-term, you might be 6-8% for a mortgage, and now some, some of my mortgages are less than 1%. Now, why would you not borrow money at such a low rate if you could? Because normally a mortgage would be 6-8%, and then you've got to think, okay, I've got 6-8% interest on that, that's quite a lot. But getting money at 2% is really cheap, so why wouldn't you borrow the money? Hmm, now I get the point that the gurus say, oh well, your house is a liability. Not necessarily. If you buy somewhere below market value, you do it up and you add value, and you get capital appreciation your capital growth and the equity will exceed the interest payments that you pay, and you pay your interest down. Sean Paul has said interest rates are going up. They probably are. No one's guaranteed. They probably are. But of course, you can fix your mortgages for 5 years if you're worried about that. So actually, you can pretty much own your house for free. I should have put the title 'How to Own a House for Free.' But if rates are really low, capital growth is solid, and in the UK is consistent 12 to 15 years, it doubles and you buy a good price with the ability to extend and add value, and you don't pay any capital gains tax on the sale when you trade up, your houses are free. So why wouldn't you do it? Duh. You know, all the American gurus don't tell you this. The next thing they don't tell you is this: to choose between owning or renting is to assume you only have one pot of money. 'Oh, I've got 100 grand. Do I put it into my own home or do I put it into investments?' Here's what I'd do: put it into my own home and learn how to do no money down, joint ventures, raising financing, getting resourceful. Most of the professional investors I know do joint ventures, no money down, they do lease options, installment contracts, and they find ways to get resourceful to not have to put their money into property. So if you're relying on the money, you're not relying on your resourcefulness, and therefore it just becomes a zero-sum binary game. Oh well, okay, I've got some money for either a house or an investment. I'll choose the investment. Oh, I've invested it once. I'll run out of money, and yeah, I'm getting net £100 a month. Wow, wow. So let me know what you think in the comments. Hit the share button because I know opinion is divided on this. Now let me try and be devil's advocate and look at the other side. Why would you rent and not buy? Because if you could, um, buy with the money an asset that produces income, maybe you could use the income from the asset to pay your rent, and then your rent becomes free. So if you get creative and clever like that, I do think that's a viable strategy. But you miss out on the capital growth, you miss out on living in a home. Here's the other thing they don't tell you: do you want to live in a rental? Red carpet, shitty fireplace, can't do it up, can't extend it, doesn't feel like a home, someone else's place. Or do you want to make it not just a house but a home? Because I can tell you, I've, um, someone delivered some gym equipment and he was like, wow, this is some house you've got here. And I've extended a long garage where I can roll out all my cars, and I've got a full glass wall, and I've got a big outdoor gym. We've got a 4-story house. We've put my, my wife and I's bedroom, and we've got a bathroom each and a big open sort of dressing room area on the top floor. And then the kids and the spare rooms are in the middle floor. I've got a gym in the basement. I couldn't do any of that to a rental. So something to think about. So let me know what you think. Now, by the way, if you found this content useful, do you know that I do 12 to 15 pieces of premium content every single month for start and scale-up entrepreneurs if you want to make money, create multiple streams of recurring income, if you want to build digital assets and physical assets, if you want to monetize social media, build a personal brand— I do content like this 12 to 15 times a month, plus masterclasses, plus meetups, plus challenges, etc., in my Rob.team program. Now, my Rob.team program is only a fiver a month. It's not even the cost of a large cup of coffee, and I have 62 of them a month. So if you just go and visit right now, rob.team— that's rob.team— just open a browser now and type it in, rob, as in Rob, dot team. A quick, um, reg page will set up there. You can cancel any time. You could— in fact, you can join now at rob.team. You can get the hundreds of hours of masterclasses and premium content and all the challenges I've run that are all recorded. And then if you don't like it or you just want to game my system, you can cancel in a month. Can't ask for fairer than that. Yeah, that's it. Thanks, Adam. The link is rob.team. Rob.team. Let me just tell you what you get on there, and then I'm going to do a summary because there's quite a lot to this. Also, can you hit the share button? Because I think there's a lot of people are quite misinformed about this. Loads of people in the UK listening to American influencers going, yeah, don't buy a house, rent, don't buy, and they don't even know why they're saying it, and they don't even know the differences between the English and the American markets. So please hit the share button. All right, so on rob.team, you get 15 pieces of premium content every month from me. Sometimes it's, um, lives like this, sometimes it's written articles. So I did 17 ways to increase your profits I've done 18 Ways to Create Recurring Income. I've done the 19 Habits of Millionaires and Billionaires. So you get a feel for the kind of content. We've got a 1-day 21 Ways to Monetize Social Media Masterclass coming up, but only for Rob.team members. We've also got— what we've got— the 2-day Recurring Income Summit with the founder of Netflix and someone who sold half a billion books, keynote speaking, as well as myself. So if you get all of that for just a fiver a month at rob.team, it's my premium platform. It's my bad, I don't mention it enough. You're missing out on so much content. I'm sorry about that. Um, and now I've mentioned it. Okay, so what do you think then about whether you should rent or own your own home? I believe you should own your own home, and I'll just list out the reasons why. I'll do a quick summary. Number 1, it gets your credit score up. Number 2, if you rent, any money you spend on it goes to the landlord and not you. Number 3, if you rent, you can never really make it a nice home. Number 4, if you rent, the money is dead. If you own a house, you can buy it slightly cheap and you can add value and get equity and growth. And if the interest rates are low, which they are right now, and the loans are low, essentially you pay down your mortgage, you get the equity and the growth, and your house is free. When you sell that house and you trade up to a nicer house, you don't pay capital gains tax. If you put your money into your home, you've got some security and a safety net. That's something they don't mention. And then if you put the capital you've got into your home, then you have to learn to do no money down joint ventures and creative finance for your investment properties. I've done hundreds of deals, no money down, joint ventures, other people's money, etc. Um, so yeah, you can still probably get your credit score up if you rent, but not as good as if you have a mortgage. Um, and you're on the electoral roll— all those things are really good for your credit score. Um, yeah, so there you go. They're my thoughts on whether you should rent or buy. So please hit the share button. Rosemary said security is so important. Exactly, it's good to have a fallback, isn't it? It's good to pay your mortgage down over time and have that net of 100 or 200 or 500 grand such that if everything went wrong, you've got that net, whereas with a rental you've never got that net. Also, in a rental, your landlord can kick you out. Do you know it costs thousands, tens of thousands to move? People don't factor that in. So you move every 6 months or a year, you're paying 10 grand each time to move. Very, uh, disruptive. I don't know if they have the capital gains tax relief in America, but this is a big thing. You can buy a house for £200, maybe that's worth £250, add value, make it worth £300. You bought it for £200, um, and then it could go up to £500, and all that gain you can roll up into the next property and put all that equity in and buy a million-pound house and not pay any tax. And that's a massive benefit. I can tell you, I, I searched for this house for 5 years, this house I live in, and I love it here, and I feel like I've got somewhere that I can call a home, that I am continually investing in to improve it. And I wouldn't do that with a rental. And, you know, I do a lot of work from home, so to have a zen space, I think this is really important as well. Now, if rates were 8%, it's different because you're going to get a mortgage that's going to be 9 or 10%. But with rates being so low that they have for so long, money is not free, but it's virtually free. So why wouldn't you get it? In fact, you know, a few years ago I was paying my mortgage down. I have a very small mortgage But I was paying it down. I thought I'd just get it to zero. Why not? The mortgage lender wouldn't let me pay it all off, but they let me pay bits of it off. And my business partner Mark was like, why are you doing that, Rob? Why are you doing that? Well, Mark, so my house isn't a liability. Yeah, but you pay your mortgage down, you save yourself a 2% loan, but that money could be earning 5% or 10%. So there's extra leverage there. Let me know what you think. I'd love your thoughts. Um, tag anyone else in who you think's got a strong opinion on this. Um, and, um, Sean Baller said if you buy, you could be working years in negative equity. Every 12 to 15 years or less, the property market doubles in the UK. It has since 1952. That ain't going to change. Now, if you buy at the wrong time and sell at the wrong time, of course you can catch that wrong, but I don't really ever plan to sell. So this house I live in I mean, I'd live here for the rest of my life. I freaking love this place. But I think my wife would quite like a 22-bedroom house, a manor in the country. And if we move, I'll just keep this place, just keep it forever. So, um, you know, you always make the right decision to buy if you know you're going to hold the thing forever, because over time— the great thing about property investment is over time your mistakes are corrected. Oh, by the way, um, on the asset side, not, not now on your own home side, But on the asset side, if you buy an asset and it's in negative equity, as long as it cash flows, it doesn't even matter. It could be worth zero, as long as it cash flows, it doesn't matter on the asset side. So let me know what your thoughts are. I love this discussion, by the way. I believe you're far better to buy your own home than to rent. And I believe a lot of people who are saying that can't even afford to buy a nice home, so they've got to rent to keep up the appearances of being a guru. And there's just so many more benefits they don't tell you about owning your own home, as well as security as well. There's a lot to be said for feeling secure. Feeling insecure will give you volatile emotions and you can make bad business and investment decisions. Also, make sure you go to rob.team. The link is rob.team. I'm going to put the link in the chat once I finish this video, and there you can join my members area. I've got thousands of members just like you. If you want to start your business, scale your business, get better financial education and knowledge, create multiple streams of recurring income, build digital assets, if you want to monetize your personal brand and social media, there's the link, Adam. Rob.team. R-O-B dot T-E-A-M. It's just a fiver a month. You can cancel anytime. It's the cost of a large coffee, and I have 62 of them a month, so it's an absolute bargain. Do you know, um, we do masterclasses twice a month as well as 15 pieces of premium content. 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So go and join rob.team, R-O-B dot T-E-A-M, and get some exclusive access to some premium content you can't get anywhere else for start and scale-up entrepreneurs. If you want to make secondary income, if you want to go part-time, full-time, or big time on building a business and building assets and creating that passive income, that digital income, and being an entrepreneur, I'll see you There, thanks for tuning in. Let me know your thoughts on whether you should buy or rent. Hit the share button, and I'll see you in the next video. Oh, did I say if you don't risk anything, you risk everything? If you don't risk anything, you risk everything.
