Is Grant Cardone Right or Wrong? Buy V. Rent

– Three bed, two bath ranch, a little over 1200 square
feet, 1500 a month. Three bed, one and a half bath, 1700 square feet, 1850 a month. Three bed, one and a half bath ranch with over 1300 square feet, 1715 a month. These are the comparables
of the rental properties around a house my client bought
a little over a year ago. (upbeat music) Fellow Michiganders, my
name’s Orlando Herrera with OHMI Real Estate
brokered by eXp Realty. And the other day on my story
I shared a couple clips of Grant Cardone stating that
it is the dumbest decision you can make to buy a house. – Yes, a house is one of the
dumbest, worst investments a human being can possibly make. – Well, I wanna show you guys some numbers in a real scenario in Oakland County and let you guys decide if it’s smarter to buy or rent a house in 2020. – Now, I’ll try to go through
this quick for you guys. My client’s numbers were
actually lower than this. His closing costs were a little bit lower and his monthly payment
was a little bit higher, but just to be able to give
you guys a basic understanding, this is a 5% down conventional loan. Coming to the closing table with $12,000, a monthly payment of a little under 1,000. In five years the balance of
your loan will be at $136,000. Balance of your loan in 10
years will be at $118,000. You do have to pay a lot
of interest up front. Don’t get worried about that though. If we go off of the low side
of appreciation, 3 to 5%, we’re gonna go 3% just to be safe, five years your house
will be worth 179,000, in 10 years your house
will be worth 202,000. If you subtract that 10 year number by the 10 year balance of your loan, you’re gonna be walking
away from the closing table with roughly $84,000, roughly $84,000, $84,000 before closing costs. Let’s go over to what it would look like if you were to rent this house. I just showed you guys
my rental comparables. Monthly payment of 1715. What you’re gonna pay in one year, $20,000 you’re gonna pay. In five years you’ll pay $102,000. In 10 years you’ll pay $200,000
if you live at that house and that’s without the
landlord raising the rent. So, what you’ll walk away
from the closing table with? Zero dollars. Some people might say, aw,
what if the market crashed and all of this just goes down to zero? Well, you’ll be able to be the landlord charging someone 1715 a month and you’ll be making
in 10 years, $200,000. Home ownership requires
a lot of responsibility, but for Grant Cardone to say that it is the dumbest thing you can do, I’m looking at numbers and I can’t see where he’s
coming from with that. Maybe he’s the landlord and
it would really hurt him if you guys went and
started buying houses. That’s the only thing I can come up with and some of the followers on my Instagram page
thought the same thing. I hope that this video
helped give you guys some more perspective. It is very interesting to
me how millennials think about their finances
and what they’re doing to plan for their future. Even if you have a great career, retirement is not guaranteed. How are millennials gonna take care of themselves in the long run? Please, share your
opinion in the comments. What do you guys think, is Grant Cardone wrong or is he right? For more real estate
action, education and news follow me on social media, where I bring nothing
but value to your page.

Leave a Comment

Your email address will not be published. Required fields are marked *