Drawing Conclusions: Is renting really a waste of money?

  • Published on Feb 8, 2015
  • If you've ever wondered why some people think renting is better than owning, here's the explanation behind how that can be true.
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Comments • 7 981

  • Yiyan Li
    Yiyan Li 2 hours ago

    Not true. All theory here depends on one thing - monthly mortgage is higher than rental fees.

  • matthew shaw
    matthew shaw 12 hours ago

    your maths has a fetal floor, roger the renter will be paying a fixed 2,120 for 25 years, however owen the owner will not. The amount he pays each month will reduce as he is paying interest and the principle. the interest he pays is calculated based on the remaining principle left, so in the final 5 to 10 years of the mortgage the payments will be very low, maybe a third, so he could also use the extra cash to invest each month.

  • David Last
    David Last 14 hours ago

    Chances are Roger the Renter will spend the $1100 on cars, clothes and eating out. Then on that day when Roger the Renter becomes Roger the Retiree, he may just wish he wasn't spending half his pension on rent.

  • BUY SELL RENT sg Properties

    I only wish"ed" that my great grand father, grand father and father would have bought more houses before me.

  • Honest John
    Honest John Day ago

    Interesting from across the pond - but here in UK , as an example - in 1969 a small terrace house =£4500. In 2000 =£95000 in 2019 c.£250000.

  • makaveli8979
    makaveli8979 2 days ago

    I like the part where owen and Roger met up and talked about moving to Cuba and living for a 10th of all those figures lol

  • Himself Lee
    Himself Lee 2 days ago

    It is basic mathematics. If you can afford to rent, you can afford to buy something modest that you can make payments on and pay the taxes, insurance, and upkeep. If you are smart, you will forego the lavish vacations and luxuries and get that modest roof over your head paid off in half the time. You will still be young enough to enjoy the fruits of your labor without worrying that the landlord is going to turn your apartment into a condo.

  • Mr.DeadLifts
    Mr.DeadLifts 3 days ago

    How in the world the renter increased his self worth close to the house owner magically? What is this voodoo?

  • Ebola Chan
    Ebola Chan 4 days ago

    My unit in Sydney has gone from 325k to 630k in 10years, so i'm happy i bought it:)

  • Marc Gratton
    Marc Gratton 4 days ago

    Get the rope

  • Scott Hullinger
    Scott Hullinger 5 days ago +1

    By and large, it's a big waste to be a long time renter.But then again, it also depends on your particular circumstances, desires, and real estate market.

  • Duncan Owen
    Duncan Owen 6 days ago

    This video misses so many factors. I assume you are at no point determining that the renter can borrow to magnify his returns?
    The only reason the property owner wins is because they have the capacity to borrow 80% of the assets worth. As soon as the renter can get the ability to borrow, the figures change dramatically.

  • Barigye Innocent
    Barigye Innocent 7 days ago

    Your are missing out some point that some people don't even have a coin despite having a business mind. So teach us how to start from zero to being a millionaire

  • Ed Morales
    Ed Morales 9 days ago

    After some internetting, I read that repairs such as repairing holes, fixing leaky faucets, and even carpet shampooing are tax deductible expenses if you're a homeowner. Plus you get to deduct capital depreciation. Two more positives for owning a house in Canada.

  • Lawrence Chew
    Lawrence Chew 9 days ago

    Owen's children get to inherit a house. Roger's won't.

  • Ed Morales
    Ed Morales 10 days ago +1

    No capital gains tax on a million dollar home sale in Canada? Nice.

  • ronald bowes
    ronald bowes 10 days ago

    As far as I am concerned , the rental thing is bulls. Everyone should own a house, but the system is so set that most of us will never own a house and therefore will be filling the coffers of those who own. I am certain that the 1% who own 99% of the worlds wealth do not rent anything, while the rest of us who fight over the scraps will always have to rent. Here we are speaking basically about the WEST.

    What about Africa and the eastern section of the planet who live in squalid conditions while nearly trillions are spent on war and every other form of murder.

    Seriously, questions like these reek of dishonesty in a world where no one has to pay rent

  • goma3
    goma3 10 days ago

    "we assume rent increases with inflation"
    LOL, it most certainly does not in the US. Renting has outpaced inflation for the last 15 years by a hefty margin. Also nobody rents a $500,000 home for $2100. Most rent values will be at about 0.6% of the house value if you're getting a good deal so more like $3,000 for this to be comparable.

  • Mico Patigdas
    Mico Patigdas 11 days ago

    Thanks. I learn nothing. Hahahaha

  • Dylan Garcia
    Dylan Garcia 12 days ago +1

    fuck it im living in a tree house

  • didrolve rolanli
    didrolve rolanli 12 days ago

    In some European country, you can borrow 125% of total purchasing value, government encourages young people to purchase, will even give some money every month to support paying back the bank...case by case... Buying a property is not bad idea

  • Alfaomegabravo
    Alfaomegabravo 12 days ago

    i donno about way back but last few decades housing have grown by way more than 3% per year.

  • Michael Blue
    Michael Blue 13 days ago

    dude.....u left out so much information...nice try. People don't get rich of mortgaging a house n paying it off. Nothing beats stocks. Transaction cost for selling stocks is way cheaper with discounted brokers. The renter wins, with all things being equal. Not even close. Also, stocks can compound with interest and a house cant. 7 to 12% is a more accurate measure of the overall stock market

  • Harcourts Seven Stones Lombok

    Go to somewhere you can buy outright, get the capital appreciation, and perhaps a rental yield

  • TheAxb2010
    TheAxb2010 15 days ago

    Roger doesn't have a mouth, nose and eyes. Roger has bigger problems than finances.

  • nixymagoo
    nixymagoo 15 days ago

    Housing markets collapse every 15 odd years. Then your in negative equity, then interest rates rise and force you to foreclose, then your running the risks over a 40 year loan. Not to mention as a renter I don't pay for repairs, or white goods replacement or council fees or water fees or land tax or capital gains tax which for a 300k increase in asset value you'll pay 60k. Fuck owning a house.

  • Kelvin
    Kelvin 17 days ago

    Putting a 5% down on a house?

  • Marc Zhu
    Marc Zhu 17 days ago

    The best is live At your parents home no need for rent or buy if everyone pay for a big enough house...

  • Honestly Me
    Honestly Me 17 days ago

    Wow, the fees and taxes in Canada will kill you.

  • drummerfella 55
    drummerfella 55 18 days ago

    Let me just say this: Just fucking ridiculous...what everyone is now expected to pay...to live in anything decent. such a world. take your $500,000 home...and Loan, and million pages of documents and paperwork and 'agreements'...and liabilites.....and stick 'em all in your Ass. Nothin' doin. enjoy the madness, and trying to 'feel'...like your playing the game of life...with your big, gorgeous, expensive, 'look at me i'm doing so well!'Bullshit Lie...that's both...'draining your bank account'...and that could get taken away from you at any second... and take a flying leap. good god.... so glad i'm not one of the millions of dummies...who feel a need to 'play this stupid game'. Just rent. it's so much simpler. screw your 'big money'...or, 'capital gains...at the end. some get it; but...some get a divorce. minimalize. live simple. and don't end up a slave to the banks. what a laugh... not in this day and age, anyway....

  • red racer
    red racer 19 days ago +2

    Did I miss the part where rent goes up every year?

  • Ray Adams
    Ray Adams 20 days ago

    It’s true Torontonians make 35k and buy $500,000 place. Because tiny condos in Toronto cost around $500k. You either take that deal or you live in the outskirt, and the commuting will take 6 hours of your time daily. Also renting is crazy, some places at $500k houses rent $3500/m. The only other option is living in your vehicle, however, in the winter that is not an option too. So this analysis is almost to the point even after 4 years.

  • kevinhesspschamp
    kevinhesspschamp 21 day ago

    Where does one get 5 percent anymore

  • Allen
    Allen 24 days ago


  • T A
    T A 24 days ago

    This was all great until 2008

  • Dat Andthis
    Dat Andthis 24 days ago

    You're missing the interest paid on the mortgage , 100's of thousands

  • oldslowjim
    oldslowjim 24 days ago

    ASS out of U and ME = ASSUME a lot, % of return, Rent going up, over time. interesting but not practical. too many variables which are unknown, just like this will never be read

  • TT T
    TT T 24 days ago

    This is so dumb to factor in the $1,100 invested every month and it turns into $1 million. That percentage is so low that it will happen it was a pointless variable. They should've been honest and just look at what the renter lost by renting vs what the owner gained by owning.

  • aric theodorson
    aric theodorson 24 days ago

    Rent on that house would be closer to $4,166.67 a month

  • Jimmy Somethin
    Jimmy Somethin 24 days ago

    Also Owen probably has put many thousands of dollars into renovations over those years, not just necessary repairs! Jimmy.

    WDEMMEL 25 days ago

    discipline is the most important component. Make a plan and stick to it gets you furthest the safest.

  • Dizzy Trimmer
    Dizzy Trimmer 26 days ago +2

    Great vid but 1 thing ... I believe you forget first last and security for the renter... Ive been through this and never found a place that didnt want at least first and security up front

  • allgoo19
    allgoo19 26 days ago

    Rent keeps going up faster than inflation rate or economic growth, it has been the fact forever.
    It even accelerates if it's left uncontrolled.
    It has to be regulated artificially in one way or another because landlords has ALWAYS advantage over the tenants.
    There has been no shortage of horror stories between landlord and the peasant in the history.
    Rent control is one of such artificial control and the first one was tried by Julius Caesar in ancient Rome.
    Another is public housing.
    Both are very unpopular among the landlords for obvious reason, they want to keep the tenants in desperate situation.
    Another way of control the rising rent issue is progressive property tax which hasn't been tried in many countries or cities. This makes it first time buyers easier to buy and big landlords hard to keep up the business(eventually leads to selling the house).
    In the current situation, there's no question owning is better option, because there's there's no restriction including the samples above.
    Why there's no restriction?

  • Nathan Fisher
    Nathan Fisher 27 days ago

    The first money making strategy owen could have made is getting a fixed rate over an adjustable one. Owen also picked the wrong house if theres a comp renting for cheaper than his mortgage. Furthermore, owen could move but never sell and eventually rent to roger and continue that process. In either scenario presented both characters are ignorant on how money is acquired.

  • Nevin Kuser
    Nevin Kuser 27 days ago

    How did buying a house turn into borrowing money? Give an example for people who pay off the house with cash. There are land deals for under $10k all over the country. Wake up people! Own your land!

  • Billy Bones
    Billy Bones 28 days ago

    The average loan interest rate is higher than average increase in house prices

  • bigvannyvader
    bigvannyvader 29 days ago

    Amazing hand writing

  • Critical Thinker
    Critical Thinker 29 days ago

    Why the hell are we even bickering about such a superficial thing as Renting Vs Owning when we have enough resources to house everyone. Money is pitting us all against each other. Money is restricting technological progress and public well-being. Why do you think all our infrastructure is crumbling while billionaires break profit records every year? And the saddest thing is the vast majority of us around the world suffer so needlessly -- whether it's depression, illness, or starvation -- because we live in a monetary system.
    Start getting informed about CHANGING OUR ENTIRE SOCIAL SYSTEM.
    Resource-based economy: ru-clip.com/video/Yb5ivvcTvRQ/video.htmlm59s
    Housing of the Future: ru-clip.com/video/T0F_H4vq9qg/video.html
    "GDP VS Public Health": ru-clip.com/video/7yQ7K8ISjxc/video.htmlm41s

  • Gamyuiii
    Gamyuiii 29 days ago +1

    Yeh but what about the rise in rent?
    Home owner pays $2300 a month on mortgage but 20 years later its still $2300.
    Renter maybe paying $1600 a month now but 20 years later he will be paying $2800 a month and only going up

    • craziii3
      craziii3 21 day ago

      @Gamyuiii no way? Death and taxes.

    • Gamyuiii
      Gamyuiii 21 day ago

      No tax on selling your first home sir!

    • craziii3
      craziii3 27 days ago

      Yea. But what about the tax the home owner has to pay once he sells the home? Usable capital is infinitely more useful than useless asset like a house.

  • Lackadaisical
    Lackadaisical 29 days ago

    renting propaganda bs.
    Renters are the sir.land-lords cotton picking slaves. They can be evicted at the master's pleasing and always have the rent increased by greed and speculation only( inflation is just a pretext to squeeze more milk from the udder ). Good luck owning stuff when you rent and have them on the streets when u can't pay rent anymore. Getting old? sleep in homeless shelters or on the streets, have children? they'll have the same fate too. There's a reason why real-estate is so profitable for those who own.

  • Zaid Zaid
    Zaid Zaid 29 days ago

    Exaggerated example

  • Philip McVey
    Philip McVey Month ago

    Renting = transfer of risk
    When the housing markets crash again, renting will give the renter the flexibility to move for work if necessary without a short sale/abandoning the house. The owner is affected by the market that they can't control.

  • Syieda Busu
    Syieda Busu Month ago

    Weird. The others have commented what I thought. To add, at the end of it, the house belongs to you, late in your age. Where would you find money to rent for the rest of your life? You need to consider medication too (hey let's face it. You're old, your body will fail eventually). Any drawings for this?

  • Mike Rosehart
    Mike Rosehart Month ago +1

    To determine the cost of renting vs owning in under 10 seconds use the Sunk Cost Rule - ru-clip.com/video/cU2Sfr_4Dpc/video.html
    The video gives you a comprehensive shortcut to make the rent vs buy decision by giving you the total unrecoverable costs of renting vs buying.

  • Subzero
    Subzero Month ago


  • Jeff Gibson
    Jeff Gibson Month ago

    What is a GST tax on sale of property? What is a land transfer tax? What is a 5-year mortgage? You guys are really getting ripped on taxes.

  • Cpvs gvmnt
    Cpvs gvmnt Month ago +4

    Your income is 35K.. you should not be looking at a 500k house. Fire your loan officer! Front end DTI should not be over 33%

  • Saeed
    Saeed Month ago

    Renting sucks no matter how the numbers are. When you commit your self to a house loan and able to pay it on monthly basis, go for it and NEVER RENT. You know why? As time passes, you brain grows stronger to find other ways of making money and you can easily cut those 25 years with top ups.
    In my country, if I die. The insurance pays for the house and my kids will take the house even without completing the loan payments. Buying a house is great security for everything. If you are planning to rent for the rest of your life then know that you are a coward. Afraid of commitments. That’s what you are. I would respect some one who would go and buy his own cardboard house than doing renting.

  • Reynaldo Johnson
    Reynaldo Johnson Month ago

    The person making this video either has never rented or is being disingenuous. You know about title transfer fees and mortgage insurance, but not about a security deposit? And that rent is hella low. And likely underestimating how much rent goes up at renewal. But ok

  • Josh Schilmeister
    Josh Schilmeister Month ago

    Greetings from the states.
    1. Can y'all get a 3% fixed with only 5% down on a house you definitely can't afford?
    2. If you have literally 0 liquid assets after buying a home, you're in for a world of hurt.
    3. Who the hell buys a $500000 house when they only have 35k in the bank?
    4. Owen can expect to spend another $10000 a year on maintenance. Which, even if that difference wasn't invested, radically skews things towards rodger.
    5. It's unclear if you accounted for rodger investing his 35k for an illiquid apples to apples.

  • glad mono
    glad mono Month ago +1

    u forgot their salary double in 25 years

  • ozzyozzyozzy oioioi

    Never put 5% down...this video is idiotic

  • nemo227
    nemo227 Month ago

    All bullsh.. All based on assumptions, all variable. We bought our new home in 1970 and added 400 sq. ft. in 1973. We can repaint and make modifications without having to ask permission. The home mortgage is paid off. Our property tax (monthly rate) is only $20 more than our month mortgage used to be. We live in our valuable asset but we can't live in a stock/bond portfolio. Our neighborhood is still a very good neighborhood after 49 years. We explored the option of moving a few times but any more would not have been an improvement, it would have been only an expensive change . . .

  • Michiel1972
    Michiel1972 Month ago +1

    Where is the part leaving something behind for your (grand)childern?

      NHMO OYTIS Month ago

      Michiel1972 not necessary if you aborted your kids.

    HAYDEN OH Month ago

    What a stupid calculation!!!
    Too many subjective assumptions lead no reasonable result. Still want to drive a nail into the wall for my kids art without constraint.

  • Laurry Carter
    Laurry Carter Month ago

    Now are you ready for this? All of the house prices are flawed. Literally inflated, like an invisible baloon. Having to rent means you are a slave and having a mortgage means you are a slave who also pays for an invisible inflated baloon coming out of your own arsehole. Someone worked hard to design our world

  • timothy chung
    timothy chung Month ago

    Those are general costs. Renting, there is no maintenance cost; hone owning, there is maintenance...

  • Pretty Young Thing.

    Very unrealistic!! Most people who rent have no investment, no capital gains and all those big words you are tossing around to confuse us local folks. Bottom line, you always come out better if you buy in the long run, cause renting is just putting that money in the landlord's pocket. Thanks, I needed this bit of inspiration!!!

  • reten Geten
    reten Geten Month ago

    No debate here ladies and gentlemen. The advantages of owning your own home far exceed those of renting, especially in the long run. Just imagine how much money one throws down the drain, when they have rented from the age of 21 to 65 years? Not to mention that you will pass away with nothing for your children to inherit. The problem is that housing prices are so ridiculously high, that many people simply can't afford to buy their own homes. In such a huge country like Canada, surely everyone should have their own home of some sort, but hey... that is perfect world thinking.

  • john johnny
    john johnny Month ago

    That is, if Owen buy the house, live in and then sell after 25 years. In reality, I would prefer not to live in the house. Instead, rent it out and buy more houses for rental purposes using other people's money or a bank, depending on the deal. That way, Owen can accumulate wealth in no time. 25 years is a lifetime. LOL