Name: Here is Why Renting isn't A Waste Of Money!
Uploaded: 2019-06-04T08:23:13.000Z
Duration: 4 min 41 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

Past simple

Recently I had an argument with a friend about
whether you should rent or buy.

The superlative

He did his best to convince me that renting
is absolutely waste of money, it's like burning

Modal verbs - A2

money because why would you rent when you
can take a mortgage, you might overpay a little

bit but you will end up owning the house at
the end.

first of all, I really don't understand why
do people think that renting is a waste of

money, I mean you are actually getting something
in return for your money, a place to live

in, its like a service, when you are getting
a cab, for example, you don't think of it

as a waste of money because you are getting
a ride.

So renting a place to stay is a service as
well, But the point that most people make

is, you have an option of buying that house
so why on earth would rent.

What I have realized is that most people do
not consider all the factors when they are

Of course, it's going to be different for
everyone because we all live in different

Interest rates and house prices are different
everywhere and it's impossible to generalize.

However, there are certain factors that would
affect everyone, regardless of where you are.

There is an opportunity cost that most people
simply ignore although that its one of the

most important factors to consider when buying
a house.

And its probably the reason why buying a house
seems like a much better option.

Let's say you are buying a house for a half
a million dollars that you could rent for

First of all, you will have to make a downpayment
of let's say 20 percent which is going to

Let's say it's going to be a 30-year mortgage
with a monthly payment of 2430 dollars.

At first look, it seems like there isn't much
of a difference between buying and renting,

buying obviously seems like a better deal,
but when you consider other expenses, such

as taxes, insurance, maintenance and so on,
it will easily cross 3000 dollars.

and now let us take a look at the opportunity
cost.

First of all the 100k downpayment that you
made could be invested.

To make matters simple, we will assume that
you will invest in an index fund with an average

On top of that, since you will be paying only
2000 if you are renting, you will invest the

Here is a little calculator that will help
us do the math.

Let's enter the numbers and submit the results.

With the help of compounding, you will end
up with almost 2 and a half million dollars

and all the benefits that renting comes with.

Such as mobility, In my case, for example,
I don't wanna be tied to a certain place,

As long as I am liking it here, I am staying,
the moment I realize that there is a better

opportunity elsewhere, I am moving there.

That will work out only if you invest every
penny that you would otherwise pay for your

But what usually happens is that, when you
decide to rent, you probably will skip your

saving payment because every time you will
have an emergency or a reason to spend that

Let's be honest, it's much easier to skip
your monthly contribution into your savings

That's exactly why buying is much better than
renting for most people.

Most people aren't much into investing so
what happens at the end of the day is that,

your friend who took a mortgage will end up
with at least something while you will have

Of course, these numbers aren't 100 percent
accurate, your rent, for example, isn't going

It will increase by at least 3 percent, so
does your other expenses.

There are a lot of interesting video on this
matter on youtube where they show you the

exact math, but to be honest, when it comes
to your case, you should look at the numbers

in your city and do the math and most importantly,
if you chose to rent, are you confident that

you have the discipline to keep investing
the remaining amount.?

Why don't you let me know in the comments
below?

Thanks, guys for watching and I will catch
you in the next one.