While I really enjoy Grant Cardone and what he has to say, this is why I don’t “rent where you live and own what you can rent.” Instead, I prefer owning where I live AND owning what I rent, the best of both worlds. Enjoy! Feel free to add me on Snapchat/Instagram: GPStephan
To preface this, Grant Cardone has a video explaining why you you should “rent where you live, but own what you can rent.” His reasoning behind it is fairly logical: the majority of people see the home they buy as an investment and don’t look at the opportunity cost of this money, so they don’t fully understand the expenses that come with owning a home. Grant explains that instead of tying up money in a home you live in, you should use that to invest in multi-family real estate - and then, rent where you live, because that’s less expensive. His reasoning is that he can rent a home for much cheaper than it would cost to own that home, he has more flexibility in moving around, and can leverage his money more by investing it.
But lets break this down a little further…and then I’ll give you my own thoughts on this, because I own where I live and own where I rent, and have purposely designed it this way for a reason, which I’ll discuss shortly.
The biggest point with Grant’s argument is that it’s less expensive to rent a home than it is to own it, and you get a higher return elsewhere. And the answer to this is both a yes and a no at the same time, meaning it’s largely dependent on your market. Here in Los Angeles, MANY areas are more expensive to own than rent…in the higher end markets, home owners make more money in appreciation than they do in monthly cashflow, which often balance out the costs of buying vs renting.
Other markets are the total opposite. Some markets are way cheaper to own. Outside of really high and really low cost of living areas, most markets tend to fall somewhere in the middle. It doesn’t make a huge difference either way, BUT with owning, you generally have a little more control with what you do with the property, and you’re not worried about a landlord kicking you out on a whim out of nowhere. So Grant’s argument can be true depending on the situation, but it’s also false in other markets.
The problem here is that for most people never do any research about which is better for their situation, and automatically assume they should buy because “it’s a good investment long term,” which won’t always be the case.
I like to own where I live and own where I rent. This gives me ultimate control of both words and most people don’t realize the HUGE opportunities of buying where you live. First off, buying where you live gives you this immediate advantage over an investment property…it allows you to put less money down at a lower interest rate. The difference between paying a 4.5% and 4% rate can add up to an enormous amount of money over 30 years. The other advantage here is that you can buy a property that needs a significant amount of work and renovate it. This is what I’ve always done, for every single property I’ve bought.
By renovating a property, you can walk away with a significant amount of equity…So right off the bat, I’m coming out ahead by buying and renovating, than just flat out renting something. Even if I pay more for buying, I’ve just made way more money in equity.
Now, granted, you could also do this for an investment property and rent it out for a higher price, but my approach has been to buy a home as a primary residence, get the lower interest rate, renovate it, and then move in and live in it for awhile. Enjoy owning without having a landlord. When the time comes, buy something else and rent out the house you were living in. Now you have a renovated investment property, financed at a lower interest rate with less money down, that you can one day rent out. Ideally the property SHOULD cash flow though, which is why you need to anticipate the rents ahead of time and what your total cost will be. But when done correctly, you’ll end up with a great cash flowing property.
For business inquiries or one-on-one real estate investing/real estate agent consulting or coaching, you can reach me at GrahamStephanBusiness @gmail.com
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28 thoughts on “Why i don t follow grant cardone s rent where you live, but own what you rent”
  1. Avataaar/Circle Created with python_avatars NomadMGTOW says:

    It really should be a lifestyle choice, and the other problem with buying is that people often buy more house than they need because it's an emotional choice. People often spend more money to get the upgrades, rather than investing the difference. Or getting more bedrooms than they actually use / need. If you rent you can always downsize or upgrade as needed which is a lot more difficult to do if you buy too much house than you need. You are also able to move more easily if you need to at the end of a lease vs. when you buy where you live, you'll have to sell or rent out the house.

    There is no right / wrong answer. If you're in a place in life where you're settled, then buy. If you're moving every few years, then you should probably rent. Both rent vs. buy are correct, depending on where YOU personally are at in life.

  2. Avataaar/Circle Created with python_avatars Samuel Farfaglia says:

    The downside to househacking is that you have to share your house with random ppl…

  3. Avataaar/Circle Created with python_avatars Joel Marshall says:

    My brother did the same thing in Mountain Home, CA. He bought a brand new home for 500,000 and sold it about six years later for 1.1million on an interest only mortgage. Appreciation has always been the winner in real estate.

  4. Avataaar/Circle Created with python_avatars Jonathan Gatto says:

    Why don't you believe in doing 15 year mortgages.

    I did and I pay 1200 a month mortgage

  5. Avataaar/Circle Created with python_avatars MAG Enterprise says:

    Owning what you rent is wasting money!

  6. Avataaar/Circle Created with python_avatars Brennan O says:

    Fantastic video, Graham

  7. Avataaar/Circle Created with python_avatars antonio m says:

    Why does he remove 175$ and 90$ from the net cost of owning the house?

  8. Avataaar/Circle Created with python_avatars ghost says:

    Also, rent out what you rent is illegal in my city. Soo.

  9. Avataaar/Circle Created with python_avatars Jeremy Dugan says:

    Okay I have a question about adding equity: can you use this to quickly build equity in order to avoid paying PMI? I bet there's a situation where you could find a sweet spot where you don't have to put as much down and instead do renovations to gain equity instead of putting more down. Thoughts?

  10. Avataaar/Circle Created with python_avatars ToxicTheSniper826 says:

    "If you just own everything you cant lose money"

  11. Avataaar/Circle Created with python_avatars Nastya says:

    Graham, instead of doing this process every other year, can you do it once a year?? I know it’s aggressive but I’m just worried banks might look at it as mortgage fraud … thoughts?

  12. Avataaar/Circle Created with python_avatars Miss Rose says:

    Great video but where does one buys these rental properties?

  13. Avataaar/Circle Created with python_avatars AVX says:

    What GC is really saying is dont try to get rich by living in a house, fix it up then sell it. Thats a 10+ yr journey, where you cant get back the time.

  14. Avataaar/Circle Created with python_avatars Shade Man says:

    Most of your teachings is also bullshit

  15. Avataaar/Circle Created with python_avatars cletus180 says:

    Hey Graham. Your video highlights the strategy I accidentally stumbled on: keep buying single family primary residence every couple of years. I am at 2 now, and will buy the 3rd in 2021!

  16. Avataaar/Circle Created with python_avatars E. Hansen says:

    Awesome video!!

  17. Avataaar/Circle Created with python_avatars Lucas Acerez says:

    I want to see bank statements, whoever is richer and stable then that's the guy I want to listen to.

  18. Avataaar/Circle Created with python_avatars Newness says:

    Thanks so very much. We are definitely going to buy and live in our first property, save money then move to buy the next one, while renting the previous. Makes much sense to me as someone with a family. Thanks once again 🙏

  19. Avataaar/Circle Created with python_avatars WannaKatana says:

    "Buy, live, renovate, then rent out but must have cash flow for this to work". But if the property increases in value, isn't it good enough just to break even or even have a small monthly negative cash flow? You're getting a house for free more or less if the renter pays the mortgage. The value of the house increases but your mortgage doesn't so in a way it gets cheaper to buy.

  20. Avataaar/Circle Created with python_avatars WannaKatana says:

    The other variable is one who would be content in renting a lower value property (temporarily) than one would purchase adding to the difference between the cost of renting vs. buying. I think most people would buy a nicer house than they would rent if it's only temporary (1-2 years?).

  21. Avataaar/Circle Created with python_avatars Just The WODS says:

    Orrrrrrrr you can buy that $150k house with a cheap mortgage payment with 3% down and still have your money for investments. Everyone assumes 20% down is automatic. I’d much rather keep my $30k and pay an extra $40/month PMI for 4-5 years which I rent or prepare to sell it. The main issue here is individuals getting approved and seeking a home for the maximum they are approved for or more.
    Never be overextended and under capitalized

  22. Avataaar/Circle Created with python_avatars Joe O says:

    Get the HEEELLLLL out of California!

  23. Avataaar/Circle Created with python_avatars Brochachoo says:

    “ spending years paying down a mortgage, most people aren’t going to have much to show for it, except for a paid off house.”

    Uh yeah. That’s the fucking point

  24. Avataaar/Circle Created with python_avatars Alvee Sadman says:

    Grant cardone had gone broke he shut down his agency and fired all his employees. He is selling his properties at marginal price.

  25. Avataaar/Circle Created with python_avatars Daniel Winsauer says:

    One thing you mentioned but is understated is that when you get a mortgage you are buying that property at present value but are locking that payment in for 30 years of future value dollars. You don't have to worry about your payment or your rent going up with inflation or with the value of the home. You are able to pocket this difference. In 30 years your $1600/mo payment will be much less relatively to today.

  26. Avataaar/Circle Created with python_avatars Didi's hair says:

    Graham, your wisdom is a blessing!

  27. Avataaar/Circle Created with python_avatars D Neuman says:

    I like moving around periodically and small contracting projects.

  28. Avataaar/Circle Created with python_avatars garyseeseverything says:

    Wow you do answer most peoples comments I’m blown away. Your a sharp guy!

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