I want to talk to you about another difference in working with me
It has to do with doing an in-depth financial analysis
I know I’ve talked in many videos about strategy sessions and stuff
But there are tools that I provide to people that really make things logical for them
The first one<cut>, it depends on the situation right,
The first one I want to talk about is the buy vs rent analysis
People screw this up right, your rent is here, and your mortgage payment is going to be here
So there is a benefit to buying! Or maybe you are going to save $100/month
Look, the cash flow at the moment makes sense
But, it’s just forward thinking, so, if you are going to be in a house for 10 years
You have to ask yourself what is your rent going to do in those 10 years
Because on an average, nationally, rent goes up 3.6%-3.7% a year
And your mortgage payment is fixed if you are working with me and will be..
<unless its a short term long… diff video CUT>
So we have got to think about not so much, what is your monthly payment now vs rent?
What is your monthly payment going to be vs rent over the 10 years you own a house
That is one bucket — Cash Flow
Second bucket over the 10 years how much have you paid on that mortgage?
That’s called Amortization Gain, and then lastly over those 10 years.
Has the property gone up in value? That’s called Depreciation Gain
There are 3 buckets that benefit but a few people managed and they talk about them
But to those that do, stop there..
But hey is there ever anything in life that doesn’t have a pro and con?
So now let’s start looking at some of the less desirable, negatives, cons
You’re going to sell the house in 10 years guess what!
You’re going to pay real estate commission…
How’s that going to cost,, we are going to factor that in
You are going to buy a house, you are going to pay closing costs
How does that factor into things
And the tax benefit for most people now….
There isn’t a specific tax benefit to owning a home
So the proper way to do it and this is what you see on the screen right now
Is to look at the 3 areas of benefit and the negatives
And wash that all out to see what the true benefit is of buying vs renting
If you are not a first time home buyer you are not coming out of the rental situation
Then they have the depreciation calculator does the same thing…
I also have a tool that talks about return of investment
This is another pet peeve one,, check it out
Most people think.. I bought a $200K house it went up $20K
So my investment is up $20K…uhhhh WRONG!
Check it out.. You bought a $200K house for 10% down
So you invested $20K and it went up $20K your return on investment
Is not the 10% based from the purchase price
Your return on investment is a 100% based on your cash outline
And it is just being done wrong by most people, they don’t think about it like that
And that is the proper way to look at it.
So up on your screen you see that I provide a form to people
that talks about the proper return on investment for your downpayment
Look, that’s the different way of looking at things
I’m Scott DiGregorio, Your Mortgage Guy
Let me do a financial analysis for you, take care