Nathan Gesner, Broker / Property Manager (American West Realty and Management)

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Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
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I had to laugh at your 'except your own' (link reference), Nathan! LOL

As for the article - that is not true as a whole in our area. Our rental rates are so incredibly high, it's crazy to think of spending that much income paying off someone else's mortgage! However, there are pockets where that is a statement that I would agree with. 

For me, I love owning investment property and having someone else paying off my mortgage, little by little, month by month!!

Nov 16, 2017 08:07 PM
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Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
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Nathan,

Personally, I find this is a generalization, and each market differs and each portfolio of investment differs.  Real estate can build wealth, but it is not the only way to do it....A

Nov 16, 2017 09:10 PM
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Kasey & John Boles
Jon Gosche Real Estate, LLC - BoiseMeridianRealEstate.com - Boise, ID
Boise & Meridian, ID Ada/Canyon/Gem/Boise Counties

Well, as with any investment there are many variables. But, we bought a home (lived in it for 8 years), bought another home, (lived in it for 3 years), kept that other one as a rental, bought another rental, bought another home (3rd one we purchased to live in), sold the whole lot of them (3) except for our current home and paid off our mortgage on our new home. So now we are 38 years old, debt free and able to invest our money in all kinds of different things because of homeownership. Wouldn't have been where we are now if we had rented. So, I'd say I disagree. But, there will be exceptions depending upon circumstances. -Kasey

Nov 16, 2017 10:02 PM
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Pete Xavier
Investments to Luxury - Pacific Palisades, CA
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My thinking is different on this, I look at any investment real estate outside of personal homes as investments. Also there is a "time value" of money consideration, at least for me, it's the reason why I'm fine with paying an outrageous rental amount for a home in a great neighborhood that would have a higher carry cost (with the understanding of alternative investments & taxation) if I had owned outright. Personal residence to me is a "lifestyle expense", yes I know I'm in the minority in this way of thinking, and yes, I do very much believe in investing as I have for most of my life, traded equities before I was 18.

The ones with the proper MINDSET & KNOWLEDGE...build the real wealth.

Nov 16, 2017 08:59 PM
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Candice A. Donofrio
Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker - Fort Mohave, AZ
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Invest it where?
Certain investments may prove that statement true.
And yes, I read it.

Nov 16, 2017 06:26 PM
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Fred Griffin Tallahassee Real Estate
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I saw that headline, but did not bother to read it.

Nov 16, 2017 06:26 PM
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Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg Real Estate

I saw this & was going to post it also. Very strange. I have to read it again to see if it financially makes sense. 

It might make sense if people have the integrity to put the money in the bank/account to reinvest.  You only have to beat 4-5% in my area.

Nov 17, 2017 05:43 AM
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Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

Arguments can be made both ways, depending on the local market.  The BIG truth is, very few people have the discipline to actually invest the money they (theoretically) save by renting.  

For me, it's more of a lifestyle choice.  I hated apartment life and bought my first home when I turned 21.  I love owning my home free and clear (for the last 22 years).  Yes, I pay taxes and insurance but those expenses would barely pay for a hovel in just about any city or town in the U.S.  

Nov 17, 2017 02:36 AM
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Sam Shueh
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I had a call from an East Indian guru and he is not alone. It is often cheaper to rent than owning esp in high tax or high priced homes. I was in Union City, CA- a not the best neighborhood town. KB starts its new home at $1.65M there. I asked what happened to the 1 story 1900 sf?  Well, we sold few about 2 yr ago. They did not make much profit and now we work on larger plateform 1.65M to $1.89M and in 2018 we anticipate to raise the asking price. What? You are in a 5 rating school neighborhood for KB homes?  OMG. Outside the development, existing homes were $375K just a few years ago.

Nov 16, 2017 07:57 PM
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Mike Rock
Complete Design - Granite Bay, CA
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it depends on a lot of things...

Nov 16, 2017 07:50 PM
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Debbie Reynolds
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The problem is in my area it is less expensive to buy than rent so a renter wouldn't have anything extra to invest. With that said, buying is a good investment especially in our market the last 3-5 years with good appreciation.

Nov 16, 2017 07:32 PM
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Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
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It has for us both in our personal homes and in our investments.

Nov 16, 2017 06:55 PM
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Michael Jacobs
Pasadena, CA
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It depends.

Yes, it really does.   The person.   The area.  Timing.

There are other strategies that work.  

 

Nov 17, 2017 05:36 AM
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Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

Totally disagree on THREE Fronts

1. Real Estate ownership is a FORCED Savings program . You have no choice but to build Net Worth

2. Appreciation is calculated on the entire value not just your equity position . Additionally it is usually 2%+ better than savings interest offered by banks

3. Finally without the TAX SAVINGS/SHELTER provided by real estate you will pay more taxes, striping away the money you claim renters might save ! And therefore have VERY limited funds to invest !

Nov 17, 2017 04:17 AM
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Nina Hollander
Coldwell Banker Realty - Charlotte, NC
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I disagree. Look at the cost of renting these days, it's like a mortgage payment (if not more). that includes taxes and insurance. And let's not forget that many renters rent because they can't qualify for a mortgage... where would they get the extra funds to to save? Has anyone looked at what savings accounts pay in any event... I could go on and on.

Nov 17, 2017 03:31 AM
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Inna Ivchenko
Barcode Properties - Encino, CA
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How about pride of ownership? I lived in many rentals myself, but I absolutely disliked all of them.

Nov 16, 2017 10:37 PM
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Tammy Lankford,
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not true in my market.  Rentals are expensive. And interest is crap.

Nov 16, 2017 09:17 PM
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Anthony Acosta - ALLATLANTACONDOS.COM
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Nov 17, 2017 09:47 AM
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Annette Lawrence , Palm Harbor, FL 727-420-4041
ReMax Realtec Group - Palm Harbor, FL
Making FLORIDA Real Estate EZ

I love links. Bring 'em on.

NEVER let curmudgeons control what you do!

Be aware, unlike the curmudgeons, I am fully in control of whether I do or do not click and find no offense at their presence.

NAR's very own trends report reveals owning residential real estate is statistically not a wealth builder at this time. Look at purchase price/sold price alongside duration of ownership and clearly the'wealth building' concept is hard to defend..

Nov 17, 2017 04:57 AM
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Tony and Suzanne Marriott, Associate Brokers
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Haven Express @ Keller Williams Arizona Realty

I'm not typically disagree-able but in this case I must disagree. 

Nov 17, 2017 02:57 AM
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Kathleen Luiten
Resort and Second-Home Specialist - Princeville, HI
Kauai Luxury Ocean Home Sales

On Kauai our rental market is extremely tight and buyers often save substantially over what they would pay in rent even with very low down payments. 

Nov 17, 2017 12:31 AM
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Ryan Huggins - Thousand Oaks, CA
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I strongly disagree, especially in our area.  They do not take into account appreciation or down payments.

 

Unless you've invested only in stocks that have gone through the roof, I don't see HOW you could out pace real property.  With my principal house as an example, I have over 700k in equity in it.  I bought it for 400k and it's worth $1m or slightly over now.  Show me any stock out there where I can put down $40k (I did 10% down) and still have 100% of the appreciation and equity.

 

Same with rentals.  The ones I own have more than doubled in value since I bought them.  Yes I have to sell them to realize that money, but that's no different than stocks.  Bonus for me is, I'm only putting up a fraction of the money, where as stocks you have to put up the full amount.

Nov 17, 2017 09:03 AM
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Christine Kankowski North SD and Temecula
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After owning several investment homes and seeing eachof them rise over $100K over time, while also getting positive cash flow each month, I struggle to accept this- over the long term.

Granted, there are other ways to invest and make money too, so this is not the only nor the best possible way.  Property investment does take time, energy, stress etc that maybe stocks do not.  However, My property value does not go down due to a war in another country, either. and its insured... my stocks are not.

Nov 17, 2017 07:58 AM
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Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
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Any plan is subject to acts of God and man. Real Estate performs consistently

Nov 17, 2017 07:09 AM
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Peter Testa
Nationwide Homes - Danbury, CT
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I think if you can afford to buy it's better to buy but then everyone's situation is subjective. 

Nov 17, 2017 06:23 AM
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Olga Simoncelli
Veritas Prime, LLC dba Veritas Prime Real Estate - New Fairfield, CT
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In many ways it's true. The wealth building in real estate only works if you buy low and the market enters a bubble, then you sell. Otherwise, if you do the numbers correctly, rentals frequently make more sense, but there are many assumptions involved (e.g. you won't lose your principal when you invest).

Nov 17, 2017 05:22 AM
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Marco Giancola
Beachfront Realty - Miami Beach, FL
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I do not believe it. It was the foundation from which I built mine.

Nov 17, 2017 05:01 AM
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Jeff Pearl
RE/MAX Distinctive / LIC in VA - Lovettsville, VA
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Agree that home ownership does not build wealth in in many cases, but it does build wealth in other cases. Disagree that renters save and invest to put themselves in a better financial position. Some do, but from what I've seen, most don't or just can't.

Nov 17, 2017 02:55 AM
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Valeria Mola
SIB Realty - Miami, Sunny Isles Beach - Sunny Isles Beach, FL
305-607-0709 SIB Realty Condos for Sale and Rent

Agree

Nov 22, 2018 08:23 PM
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Evelina Tsigelnitskaya
SIB Realty - Sunny Isles Beach, FL
www.SIBRealty.org 305-931-6931

Interesting question and great answers.

Thank you.

Nov 22, 2018 08:15 PM
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Sean Casey
Patterson-Schwartz Real Estate - Newark, DE
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I think it can be a way to build wealth much like a lot of other things.  Historically, it is the greatest builder of wealth.  

Nov 19, 2017 02:09 PM
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William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

I do not.

Nov 17, 2017 08:06 PM
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Barbara Todaro
RE/MAX Executive Realty - Retired - Franklin, MA
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it builds alot of wealth in my area.....

Nov 17, 2017 08:40 AM
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Joe D'Agostino
NMLS# 729950 - Manahawkin, NJ
Mortgage Officer 46 years!

In the mortgage business we say "What is your home worth"? Answer...nothing until you sell it! With the possibility of losing the tax deductions for mortgage taxes and interest, many financial shows are saying it may be better to rent. I hope the NAR has a good lobby, for this could really impact our industries......

Nov 17, 2017 08:26 AM
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Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Disagree.

Nov 17, 2017 07:57 AM
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Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate

Every situation and investment portfolio is unique as are the tax advantages to individuals and corporations. In general I agree that "home ownership" does not build wealth. Too many homeowners use the home as an ATM. Too many spend the equity built. When the market turns ... they are screwed ... we've seen that cycle many times. 

Strategic investing in property can add to ones investment portfolio. I draw a line between "home ownership" and "investment property".  

Nov 17, 2017 07:45 AM
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Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Nathan Gesner I don't think so, but how many renters will save the money?

Nov 17, 2017 06:31 AM
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Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

It depends on where the comparisons are.  Some places yes, others no.

Nov 17, 2017 06:07 AM
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Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

The typical person can do better in real estate because they lack the time or knowledge to invest in the other markets!

Nov 17, 2017 05:33 AM
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Richard Weeks
Dallas, TX
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Fake news

Nov 17, 2017 05:05 AM
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Praful Thakkar
LAER Realty Partners - Andover, MA
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No!

Sep 13, 2018 08:44 PM
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Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Rents are high in the Denver market, why waste money on rent.

Nov 20, 2017 10:01 AM
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Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Investing in a home in Denver will give you a great return right now.  We are seeing 10% or more in many areas.   

Nov 20, 2017 06:47 AM
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Debbie Gartner
The Flooring Girl - White Plains, NY
The Flooring Girl & Blog Stylist -Dynamo Marketers

As a general rule and over the long run, no this doesn't make sense to me, especially because rent usually factors in taxes, insurance, maintenance costs.  Over the long run, home prices should go up, so it would increase the equity...and rent would also increase while mortgage payments remain flat. Over the short term, it doesn't always work out that way.

Nov 17, 2017 04:55 PM
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John Meussner
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Think it's market dependent, and also very local.  Overall, home prices go up over time, but so do stocks or any other worthwhile long term investment.

I've always thought of homes as more of a tax shelter than an investment in a traditional sense.  If the recent tax proposals pass, that viewpoint will become moot.

 

Homes are a way to build wealth, and so are other investments.  Just a different way of doing things.  

 

What that article likely doesn't say (didn't click) is how convenient it is to own VS rent.

 

 

Nov 17, 2017 12:40 PM
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Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
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Depends

Nov 17, 2017 07:24 AM
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Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

Here is the think, many renters can barely afford the rent every month never mnd have extra money to invest. Those who buy a home, take care of it and do not use it as a ATM sucking off its equity in frequent refinaces, build wealth. Period

Nov 17, 2017 05:49 AM