More Wise To Rent Or Have A Mortgage?

I love it when I get this question. But I’ve never made a video about it. So, today I’m going to be talking about when
to rent and when to buy a house. And some of you might be like, “What do you
mean, Kris? You would always want someone to buy a house.” The reality is in many circumstances, that
is not necessarily true. So, today I want to break down more of the
math and science of what goes in my brain when I’m giving someone a million dollar game
plan to answer even just a simple question. When to buy and when to rent. When does it make sense to rent and when does
it make sense to have a mortgage. I’m going to do my best in today’s video to
share with you some examples of when you’d actually want to do one or the other. Because I’d love to say that the answer is
get a mortgage. Don’t waste your money on rent. But the reality is there are times that it
actually make sense. So, I’m going to actually share with you a
couple of examples. First of all, I want you to think what’s more
important to you? Becoming financially free or having a nice
pad? I mean, like for just a moment, pan around
here a little bit. Like I have a really, really, nice house. Blown out over here. But we got the hills and the sun is out, it’s
green and it’s beautiful. And I love this house. And the reality is it’s a multi million dollar
house and this house is not paid off. We have a lot of it paid off. But the reason why it’s not paid off for some
of my investing reasons that become pretty obvious if you are a subscriber to this channel
and you learn about how to build wealth. Because what I’m doing is I’m controlling
assets. And so, the answer to this question of when
does it make sense to rent, when does it make sense to have a mortgage, really comes down
to some simple math. Do you value getting ahead financially or
do you value spending your money and living in the moment. I’ve bought my very first house. It was a tiny little bungalow and I got a
mortgage. My basement was rented out and that basement
rent actually covered my entire mortgage. So we were living for free. That felt better to me than losing $400 a
month because it meant that I had more money now every month to put towards my investing. In most situations, it makes sense to have
a mortgage. When it stops making sense is much comes down
to really this math. Number 1, what percentage of your earnings
are you saving? Because if for example, today, I’ve got the
money out because I’ve done some videos with it. If this here represents like my most recent
paycheck for the like a month of the quarter, if I’m only saving a little bit of it… And it’s because I have a really monstrous
mortgage. So, I can have a nicer lifestyle today then
I would say, I’m funding myself a good life style today that it looks like I can afford. But my future can’t afford it. If you can have a mortgage and have a significant
amount of your money go towards investing and have a mortgage, then you’re probably
cleared. In other words, properties, when they tend
to be underneath the median, like when you’re in the 1, 2, 3 hundred thousand-dollar range,
you can always move out that house and be cashflow positive especially with the least
option. But the moment you start getting into a 500,000-dollar
mortgage or 700,000 or a million dollars, if you couldn’t sell the house and you also
couldn’t afford to stay there, you’re going to lose money. Thousands of dollars renting it out to somebody
else. And so, that also doesn’t make sense. When you want to have a mortgage is when it
fits in your investment plan. And so, ask yourself. First of all, if getting a mortgage decreases
the amount of money that you can have to invest, then you may want to consider just renting. I’ll give you an example. I won’t name any names but one of my partners
has bought about 10 homes with me. Very succesfully. They have a lot of money in the bank, they’ve
been excellent savers and they partnered up with me. And I took them into the very best markets. We only started less in the year ago. 10 properties, they’re crushing it. But they also interested in having a nice
lifestyle. And they’re renting a cheap nice home. But they’re so tempted to buy that million-dollar
home and to just like live it up right now. And I’m saying, “Guys, you have a choice. You can put your money to work and turn these
10 homes into 20, in 40 and 100 homes and freaking crush if financially. Or you can have the lifestyle that you want.” And you have to ask yourself, what’s more
important to you and where’s the balance. Here’s really what you want to do. You want to have a period of time in your
life when you have what’s called delayed gratification. And it doesn’t matter whether you’re making
a lot of money or a little bit of money. But delayed gratification means I’m pushing
off the things that I want so that I have more money saved that I can invest with. And what’s the goal here? Oh, it’s really simple. You want to be saving no less than 10% of
everything that you make, that you withhold for you to invest with. Ideally, you want that minimum to actually
be 20%. And if you start doing a great job with your
money, you want to turn that into 30% and 40% and 50%. Just contrast this. When I bought my first investment property,
took me 14 months to save up to buy it. And when I bought and moved out of it, that
was a 500-dollar a month cashflow by keeping that home. Fast forward 4 years, out of 12 thousand-dollar
amount cashflow. That was more money than I made at my job. Which meant that now, I can leave my job and
have real freedom. Most people will never taste financial freedom
because too little money goes into the investing pile and too much of it is mortgage, a nicer
car, good food and there’s not enough to invest it. That’s the plague. That’s the problem is. “I want it now. I want it now, I want it now.” But if you delay gratification for 5 years
and put that money into your investments, even just 5 years from now, you can step into
much more luxurious life. I didn’t buy any luxurious item for myself
for the first 5 years of investing. And then I moved in to a beautiful 10,000
square-foot home on a golf course right outside the cannon. Started travelling around everywhere because
my real estate was paying for it. My interest, my dividends were paying for
it. Is it smarter to buy a house? Depends. Is it smarter to rent? it depends. If you’re talking about real estate under
$300,000. Then having a mortgage will always makes sense
if you can also keep in mind that you should be treating this like an investment property. Meaning, I’m not going to live here forever. If I need it to turn it to investment, could
I do that and could I make that work? And if your answer if yes, I think that you’re
absolutely on the right track. Because for most people, their own home will
be one of the best investments. You stay in that home for 20 years, you might
accumulate 1 hundred, 2 hundred. 3 hundred thousand dollars worth of equity. Friends, there you have it. I hope that’s helpful for you in determining
and understanding the principles on when to rent, when to own. At the end of the day, I don’t care about
owing anything. All I really care about is using control. When I buy all these homes, I’m not really
buying them. I’m not buying any of them cash. I buy a home almost every single day. And I buy it with leverage and that home produces
fantastic ROI. And I’m going to hold that home for 5 years. Why don’t I want to pay it off? Because in 5 years, I’m going to sell it. I’m going to double my money. I’m going to buy 2 more. So, I want to control the asset. Ownership is not really ever the goal. The more of us that can really disassociate
from ownership will actually create a lot more financial flexibility in your life instead
of trying to keep up with some concept when there’s a cheaper way to have control what
you want and have the money. And most importantly to be able to invest. Thank you for watching today. If you do not have a free copy of this Straight
Path book, I’ve got copies of it, currently available. It’s yours just cover the shipping on it. Click the link below. This will show you way more details on exactly
how to make your first million dollars with your own custom game plan. And I’m super excited. Everyone needs to have a multi-million dollar
game plan. And now you get to have yours now. It’s in the link below. Subscribe and we’ll see you on tomorrow’s

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