Should you Rent or Buy right now? 🤔

Should you rent or buy your own home right now? It's a huge question. I get asked it daily, and quite frankly, I think there's some really bad advice out there. And by the way, I think that bad advice just got worse. So a lot of these American influencers say you should rent your own home and never buy it because it's a liability, it's not an asset. But the first thing I'm going to say is most people don't know the difference between an investment and an asset. And I'm going to share with you the difference between an investment and an asset, because an asset, yes, it produces income, but sometimes you can invest in something for the long term that doesn't necessarily produce an income in the short term, but it's a big investment in the long term. I'll give you a clue, it's a house. So I'll come to investment versus asset in a moment. But the rules have actually changed, and more and more of my English followers, uh, are listening to American influencers. And many, or most, American influencers say that you should rent, not buy. And I just quite frankly can't understand it. So the first thing I'm going to ask you, and I'd love your thoughts on this, why would someone who's apparently a multi, multi, multi, multi, multi, multi, multi-millionaire with multi-six and seven and eight-figure income businesses, why would they not buy their own home? It's utterly ridiculous. It's like a billionaire going to shop at Aldi. They wouldn't do it. If you are wealthy, surely you would buy your own home. What is the argument of renting if you are wealthy? So all these so-called influencers who are talking about rent not buy, I cannot get my head into what they're actually thinking. I have 1,100 tenants. I've got hundreds of properties. I do own my own home, so it's not like I'm talking not from experience. I'm talking from experience. So I believe strongly that you should buy your own home as soon as you can, and I believe that it's got even more important that you should buy your own home with the changes in the world that I'm going to mention. But first off, I'm going to try and disprove my own argument just to show you that I am balanced. Just so you know, to all you critics out there. So I do not believe you should rent. I do believe you should buy. The world has changed, and I believe you even more should buy over rent. But let's try and disprove my own argument. Why might you rent? You might like freedom to travel. You might not know where you want to live. You might not want what you perceive to be the noose of a mortgage over your head. You might feel that you can't afford it. So you may feel that your own home is actually a liability because it doesn't produce your cash flow. 1, 2, 3, 4, 5 potentially reasonable arguments as to why you should rent, not buy. Okay, cool, there you go, I'm balanced. Now let's get into the meat and bones of this. Why on earth, if you could afford it, Would you rent and not buy? Because when you rent, all the money is dead. You get none of it back. And yeah, you need somewhere to live, but you get no rent back. So these people that say you should rent and not buy because your own home is a liability— but rent is a liability. Rent is an overhead. There is no return on rent. There is a return on your mortgage because, one, you're paying down a mortgage, and two, you own an asset. So let me say that again: no return on rent, but there is a return on a mortgage and/or your own home. So all rent is dead money. Imagine an influencer or a millionaire, billionaire, or whatever saying, um, the food is an asset. No, it's not. You need it. But there is no return on food. All right, maybe there's energy, who knows? But there's no return on rent. It is dead money. It is consumed and it is gone, and you never get it back, and you get zip. You have to live, yes, but you can live in a home that you buy, and there is a return on paying a mortgage down, a return on the value of the asset going up. That's big reason number 1. Big reason number 2: rents are going up hard right now. So look, 20 years ago there probably was an argument that maybe you would rent over buy because rents were quite a lot lower than mortgages. And I understand that if you're getting onto the housing ladder or trying to and you don't have a huge amount of money and rents are two-thirds of the price of mortgages, you could argue it makes sense to rent until you can buy. But right now rents are going up so hard. I know that some rents are going up 30, 35, 40%. Now, they didn't go up a huge amount the last few years, but of course, because of this energy cap and this cost of living crisis, rents are now going up hard. So now rents have equalized to mortgages, and with things like the Help to Buy scheme in the UK, actually rents are now more than mortgages in some instances. So what I understand, if rents are a lot lower like they used to be, but now rents are equal or higher, so why would you throw all that dead money into rent? When it costs you as much, if not less, per month to pay your mortgage, and you're paying your mortgage down over time, and you're owning your own property over time, and that property is going up over time. So here's the thing: a lot of this information you're being given is out of date, which is why it's good to follow me and listen to me, because I update my content very regularly. In addition to all rental money being dead, all refurbs on your rental property is dead, all painting and maintenance, maintaining, etc., is dead on your rental. In fact, you're just making your landlord money, and a lot of people don't like landlords at the moment. However, all money you invest into your home at least holds its value. I can't say that a refurb's going to increase its value. It could if you buy it undervalued. It could if you buy it the where it needs a renovation or refurb. But if you maintain or upgrade your property when you own it, you're investing that money into yourself. You are not giving that away to someone else. Okay, next thing then. Actually, let me go back and try and counter my argument just to show you that I am balanced. Um, interest rates. A lot of people, yeah, but interest rates are going up, they're really high. They are going up, but they're not really high. They're only really high because you think you've got used to 0.1%. Oh, peel me grapes! Oh, give me pedicures! Fan me, feed me! No, in the long term, interest rates are 5 to 6%. That's the long-term average. So they are still relatively low. So actually, you could argue right now is a good time to buy and lock in a relatively low fixed rate mortgage. Now the swap, i.e., the future predicted interest rates are more than they are right now, but you can still get reasonably good lower than long-term fixed rate mortgages. Now by the way, when you get a fixed rate mortgage and you've got the security of the mortgage interest payments, repayments not going up, that's good. And you also own your own home and you can do it up. And you can buy it under value and add value to it, and you're not going to kick yourself out. Now, this energy cap crisis is awful. A lot of landlords have been forced to force rents up, and by the way, a lot of them haven't put up rents for many years. And some tenants are going to have to leave, or some tenants could get evicted, or the 6-month tenancy comes out and your landlord's like, 'I can get more rent now, bye.' So every 6 months you could get kicked out of a rental. Do you know it costs thousands to move? There's all these people out there— this is a bit hippie— a lot of people out there, 'Well, I want to rent because I want to be free and I want to travel whenever I want, wherever I want. I want to vagabond, you know, I want to live a minimal life.' Well, every time you move, removals, the cost, you've got to redo all the insurances, the direct debits, you've got to reconnect all the internet and all of that. It's a massive faff and a massive cost every time you buy. I mean, my business partner's probably worked it out on a spreadsheet. But I reckon it's thousands of pounds. It might even be more than £10,000 every time you move. Yeah, move every 6 months, then see how that does for you. Okay, the next thing— are you now coming around to my way of thinking? I challenge any American influencer, I challenge anyone who says it's better to rent and not buy, to a stitch, to a jewel, to a duet, or whatever the collab, um, names are for it on the internet. Look, I've already tried to disprove my argument, and now you're going to get a chance to think about, hmm, what's best for you. The next thing is, in the UK, properties double every 10 to 15 years. And some people say, oh well, that's not going to happen in the next 10 to 15 years, it's going to go down. It might go down, but if you go back to 1088, all the land and property values— I think it was Presented around about the time of the Doomsday Book, or it may be even in the Doomsday Book, can't remember, but it was 1088. All London property in the UK was £1 million. Now I live in a house that's more than that, and probably so do you, or someone you know does. And in London you can get a 3-bed house for £1 million. And if you track that all the way back, that is the property market doubling 10, 12, every 15 years. In fact, if you go back to 1952 and you look at that nationwide house price data, you can see that the— I think you could— well, between £1,500 and £3,000 you could buy a house for in the 1950s, depending on the area, because the north is cheaper than the south. But between £1,500 and £3,000— you can't even buy like a cheap watch for that now, really— that's what a home was worth back in '52. So if you look at that, the interesting thing, by the way, if you want to do your research on this, go and look at the nationwide um, house price data. Because here's what you see, and, and this is interesting, and I see this in our profit and losses and our, um, accounts. I see this in lots of KPIs, key performance indicators. I see this in a lot of data. You assume that the curve goes gradually upwards, but it doesn't. What tends to happen is it's relatively static for many months or years and then it gets a hard, fast increase, and then it gets a hard, fast decrease. So what Nationwide house price data does is it gives you every quarter from '52 to 2022 and beyond. And what's really interesting is you've got really steady, slow growth, and then 1 or 2 months they go up wildly, 1 or 2 months they go down wildly. So you get a big percentage of the growth and the crash in a very relatively short period of time. And you know, in my company, August and December, they often don't make any money. Sometimes they make a loss. But, um, October, November, they make most of our money. My friend Gerald Ratner, he said he made all of his profit in retail in December, so none of it in the 11 months before. So that's what data's like. So the averages, though, speak for themselves. So you can lock a lower interest rate right now, relatively low. I'm not saying it's low because you've been used to really low, but you can lock a relatively lower interest rate. You can probably get a mortgage for the lower monthly payments than rent right now. Your mortgage repayments, yes, it's a lot of interest, but at least it's paying down your mortgage, and at least you're owning a property that goes up. Next thing then, so if you rent, all dead money, all dead money, all dead money, all dead money, this £300,000 house, all dead money for 10 years. I've paid tens of thousands in rent. Oh, it's gone up to £600,000. Oh, my landlord's made £300,000 while I've been paying him. Or you own your property, you pay down the mortgage slowly, slowly, slowly, slowly, slowly, you do it up, you add value, it goes from £300,000 to £600,000 in 10 to 15 years. Which one would you rather have? Now what some people do is say, yeah, but I'm going to wait, Rob, for the perfect time to buy, so I'm going to rent right now and see what the market does. Well, you'll be waiting for 10 years because nothing will happen and you'll keep waiting, and then something will happen sharp and you'll get scared and you'll end up waiting forever. Now, there probably is a crash coming. Ray Dalio, I think, predicts in the next 2 to 3 years. So you might rent very short term, you might, but remember, the amount of time you're waiting for the property market to come down, you've got to offset against all the rent that you have to pay. Hmm, some things to think about. Next thing is, when you rent, you can never make it a home. So a rental is a house, but the home you own, the house you own, is a home. Do you want to live in a house or a home? So a house is: don't like the carpet, don't like the fireplace, don't like the garden. And by the way, all the money you spend on it, that is paying the landlord. A home is: I've got this zen tranquility, I've got my own home office. I've got peace and quiet. I've got somewhere I can raise a family, build an empire. Is that not worth— People don't understand this, the difference between a house and a home. And surely this is a huge thing, is it not? I can tell you, because I played the game. By the way, I have rented. I actually bought, then rented, then bought. And the reason I rented was because I was waiting for the right house. So is there an argument to wait for the right house and rent until? Yeah, there is. And I actually ended up renting for 2.5 to 3 years, and I actually ended up timing it really well, and I'd say that was more fortune than skill because the market did correct in that time. But I rented on the house on the street that I wanted to live, and I just waited for one of the 3 or 4 houses that I'd earmarked to, to come available. But I hated living in that house. And by the way, that was a really nice 5-bed detached house, really nice, one of the best on the street, one of the best in the city. But the carpets were red, the fireplace was old, it felt awkward, there was a bad energy. And energy is really freaking important, is it not? Okay, next then. You have tax breaks on owning your own home. So when you own your own home and then you sell it, you have— in England, by the way, on things like mortgages and tax, you've got to get your own local advice depending on where you're listening from. But in the UK, you have primary residence relief. You have a relief of tax And when you sell your own home and you buy into the next one. So a great way to make a lot of money for your retirement and to live in lovely homes— and by the way, mark my words on this— what you do is you buy a relatively rundown house, and generally you want worst house, best street. Make a note of that: worst house, best street. So you buy worst house, best street, you do it up, you make it your own, you put your love into it, you make it a zen place to build your empire and raise your family. In 5-10 years, it's gone up 30-50% or more. The money you've put in as an investment, you've paid your mortgage down, then you find another house, the worst house on the next biggest street, and you sell your house and you buy that one and you pay no capital gains tax because you get the relief moving into the next property. And essentially you trade up, trade up, trade up, trade up, trade up, trade up, trade up, and you can end up owning really fucking expensive houses way more than you could afford to rent with that really cool buy low, worst house, best street, do up, sell, no capital gains tax, roll all the profit into the next property, buy nicer, bigger, better, but buy low, do up, add value, and you could trade up from a quarter of a million pound house to a £5 million house in 10 to 20 years. Just doing that. Put that in your pipe and smoke it, all you rental lovers. Yeah, so summary: all rent is dead money. Rents are more expensive than mortgages right now. You could get kicked out at any time. Moving costs you a shitload of money. When you own a property, it doubles every 10 to 15 years. It's been proven for 1,000 years. And in the Western world, it's not likely that they're going to be able to reclaim those assets in the next 100 years. When you own a house, you can make it your home. You can buy low, do up, make money, and trade up. You get tax relief. You pay your mortgage down. Someone please tell me why you would freaking rent. And right now, with rents going wild, it's even more important to not get stuck into the rent trap. And if you want to get on the housing ladder, buy somewhere small. Start with a small flat and do it that way. So here's the thing, right now the world is changing. You've got increasing cost of living, increasing energy caps. You've got relatively low interest rates, but it's going up. You've got very high inflation. You've got disruption in governments, lack of trust. You've got the banking system which essentially takes your money, gives you no money on it, doesn't insure it, and lends and invests it out 10 times return, 10 times multiplier. Yeah, damn Grant Cardone. Grant's my friend, I'll debate this with him. Apparently he's just bought a house. Grant, come on, Grant. All right, so right now it's more important than ever that you, that you gain financial independence and knowledge. You make, manage, and master money. You learn to become your own financial advisor. You understand the difference between the economy and your economy. You get better financial knowledge, you focus on this financial knowledge, you build assets, you protect depreciating cash into inflation-beating assets. So if you'd love to learn how to do all of this, by the way, and if you've got some good tips so far from this content, join Rob.team. Rob.team is my financial educational platform. It's decentralized, so no one can cancel it. 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Thanks for tuning in, and remember, if you don't risk anything, you risk everything. Okay, I also recorded that for an episode, so if you wouldn't mind hitting the share button. I want to get this message out to as many people as possible. I think a lot of people, um, are struggling, drowning in increased rent and increased bills and increased expenses, and they don't know that there's another way. And they don't realize, for example, with the Help to Buy scheme, they don't realize actually financially they could be a heck of a lot better off buying. So I wonder if you might share this, help as many other people as possible, because I think there's a lot of bad advice out there. And, you know, the main reason that a lot of people say rent, don't buy is because they say, well, your house is a liability. Ah, these poor guys have missed it. Remember I said I was going to talk about investment versus asset? Well, technically your home is not an asset. Yeah, I do agree with that. They are right, because an asset is something that produces income. So if you own an investment property and you rent it out and that produces income, that's an asset. If you own your own home and you have to pay in, that's not an asset. I agree with that, but it is an investment. It's an investment in your pension, it's an investment in your future, it's an investment in doubling in capital growth every 10 to 15 years, it's an investment in living in a home, it's an investment in a family, it's an investment in building your empire. So it might not be an asset but it is a hardcore investment. I think that's a good one to finish on. Hit the share button, please. Let's help as many people as possible. Thanks for tuning in, and remember, if you don't risk anything, you risk everything.