man in this crazy economy how do you
know when to like rent and hold it
or when to sell your home because this
guy right over here i'm definitely
selling that
and i crunch the numbers on this guy and
100 i'm gonna rent it the one across the
street however
definitely gonna dump that one if you
don't know the math behind when to rent
or when to sell you're going to want to
watch today's video check it out
[Music]
i'm turning dreams into reality
[Music]
if i rent there could be trouble
if i sell there could be double man
so many people want to know chris i've
got my property i'm definitely upgrading
or i'm buying a different house
should i be like holding onto my home
and renting it out and buying another
one
like i heard that you did that on your
channel when you got started
should i just sell a cash out because my
property has gone up in value
and like go buy like a nice car and a
nice house
listen today i'm gonna break it all down
before we dive into this here's
something that i want you to consider
are you aware that your house is likely
the most
meaningful financial asset that you'll
ever hold
i mean that when you actually get to
retirement you evaluate how much money
you save for retirement
whether it was in a pension of 401k and
ira most of the time
statistically if you compare that to how
much money you've made in holding your
home in
equity like it's gone up in value the
equity far outshines whatever you spent
saving your entire life for retirement
so this is a really important question
on whether or not you should actually
hold on to the property
while buying a new one or actually just
cash out and sell it
just by virtue of owning a piece of
property with time
it does appreciate and it goes up in
value and you know a lot of people at
retirement say wow
i had no idea that my house would have
gone up two hundred thousand dollars
in the time period that i held it and
they start doing the math and thinking
if i had just had not one
but four more houses technically i would
be a millionaire
just by virtue of my real estate alone
it's kind of a cool thought and it's
definitely going to factor into today's
conversation
about this how do you really decide
whether you're going to rent
or whether you're going to sell your
property figuring out what to do with
your current home
may not be as simple as listing it
depending on your financial situation
and your local housing market
you may be better off renting it out
rather than selling it or
vice versa today i'm going to do a deep
dive and i'm going to share
five different ways of looking at this
difficult question
of whether to sell or rent
to help you arrive at the correct answer
and really understand all your options
there are five specific criteria that
we're going to be evaluating right now
so that you can make the right choice so
let's take a look at number one
you've got to take a look at the home's
equity as in when you bought this house
has it actually appreciated because the
difference between what you owe and what
it's worth
that gap is called equity and the more
equity you have
the more cash you might get when selling
the property
if your ability to buy a new house
relies on accessing
equity currently tied up in your home
then selling it or doing a home equity
line of credit
may be one of your best options as in
think about it this way
you have this house and you're thinking
we want to buy a new house but it's
more expensive so we need to get the
equity or the money we've earned
out of it by selling it somehow so that
we can put it in the new house and still
keep our mortgage payment
a little bit lower selling it might be a
way of doing that
but you could also keep the property and
do a heloc or what's called a home
equity line of credit where you
basically say bank i'd like to keep it
but i need to access some of that equity
back out of it so that i can also put it
towards the new home
let me give you a common scenario that a
lot of people find themselves in
you might actually have a house and
let's say that currently
it's valued at 350 000
but that's only because it's gone up in
value you actually bought it maybe a
couple years earlier
maybe you bought it for 200 000 so what
you owe on this property
is 200 000 and you're sitting here
thinking chris
the difference between the value and
what i owe 350 000 minus 200
000 that's 150 000
of equity and we're looking at actually
getting a new home and we'd like
something nicer we're actually planning
now on
you know not going back to work at a
commercial space we're going to work
from home so we chris we need a
different house we need a
a home that's going to take care of our
family situation but also a place that
we can
comfortably work from where the kids
aren't bothering me or i've got a
dedicated workspace or whatever it is
that you need
so you're thinking hey this is my
existing house but on the new house
let's take a look at it let's just say
that it has
a value of 500 000
and normally you wouldn't be able to
afford a 500 000 house
but you're thinking if i can get this
150 000
out of it maybe by selling it then my
down payment could take my 500
000 down to 350 000 on what i'm going to
owe
and sure my payment will be higher at
350 000 rather than the 200 000
but the house is going to be so much
bigger it's going to be so much nicer
so chris in that situation with the
equity that i have on my existing home
like should i try to hold on to the
first one and do a home equity line of
credit or
should i actually sell it to get the
full 150 grand out and put it towards
the new home
well i think we've explained the first
option really well you could literally
sell this property
get roughly 150 000 out minus closing
costs
and you could apply it towards a new
home there's another option though you
could actually keep this home and do
what's called
a home equity line of credit that's
where you go to the bank and say bank i
owe two hundred thousand dollars on a
house that's worth three hundred fifty
thousand dollars
most banks today will give you 80 to 90
percent of that equity back out
let's just say with like key west bank
you went up to 90
what's 90 of 350 000 it's about 315
000 it means that you wouldn't be able
to access a hundred and
fifty thousand dollars as in selling it
but it does mean that you might be able
to access
a hundred and fifteen thousand and then
you start really doing the math and
saying well chris
after closing costs and selling costs
paying realtors
i might only net 115 000 anyway would it
be worthwhile for me to hold on to this
home and just use a home equity line to
hold on to it
and then buy the new house well at least
you now know you've got two
considerations
when i share the next criteria i think
it's going to get even clearer for you
the second criteria for you to consider
is the market
value as in what's actually happening to
the market
right now every market is different but
on average
real estate always appreciates and that
basically means that over time it does
go up in value
like i can throw up a graph and show you
that over the last 65 years
on average nationwide every house goes
up just shy of five percent
in value so i put in the value of my
home let's say it's 350 000
and then i'm going to multiply that by
0.05 that means that
i'm assuming that the 65-year average on
appreciation will hold true
that's 17 500 and for just a moment
imagine that you were going to hold this
home for five years
if i just multiply it by five that shows
me that number is just nearing right
around ninety thousand dollars
that's what appreciation is well if you
expect that your current home's value
will
increase within a few years or less you
might actually want to consider renting
it out
and then selling it later so you can
take advantage of that appreciation
i guess it comes down to your belief do
you believe that this market is going to
keep going up or do you think there's a
looming
bubble waiting to burst but chris
what do you think will actually happen
with the market does it go up but does
it go down
hans that's a really good question let's
think about it
rates are at a 50-year all-time low we
have a demand according to the wall
street journal for
four million missing homes that need to
be built and the question is can the
current number of builders in this
country
actually bust out four million missing
homes in five years
i don't think so and i further don't
think that a bubble can actually burst
as long as we haven't actually met that
demand so i think prices are going to
continue increasing
yeah and not a little a lot hans
don't get too excited hans don't forget
pigs get fat
but hogs get slaughtered speaking of
which let's talk about
capital gains this is most certainly a
third consideration when deciding
whether
you should actually rent the home by
keeping it or maybe actually consider
selling it
first of all what is a capital gains
well capital gains is what happens when
you buy an asset and over time it goes
up in value
once you've held it for longer than a
year it becomes long-term capital gains
and you may not have known this but the
government at least in america is like a
secret silent partner
which means that when you make money on
investments that you hold long term
guess what
they want a piece of the action and they
have a special name for that tax
it's called a capital gains tax by the
way did you know that biden is trying to
double capital gains tax
listen here's the bottom line with
capital gains if you're thinking of
selling your home instead of renting it
out
you'll be able to exclude up to 250
thousand dollars of capital gains from
the sale
or even up to 500 000 if you're filing
as a married couple
from your income if the home was your
primary residence for
two out of the last five years in other
words if you lived in this baby for two
out of the last five
years then you can actually write off
quite a bit of money up to either two
hundred and fifty thousand dollars
filing single
or a half a million dollars if you're
filing jointly
hold the phone chris help me understand
this capital gains thing
do you remember the previous example we
talked about a house that you owed
two hundred thousand dollars on it's
gone up to three hundred and fifty
thousand dollars it had a hundred and
fifty thousand dollars worth of equity
if you decided that your best option was
to sell that home and let's say you
receive a hundred and fifty thousand
dollars of gains
as a proceed at that point of sale
you're not going to have penny tax on
that
why because if you've lived in it for
two of the last five years
that 150 000 is below the 250
000 exemption you're not going to owe
any capital gains tax on it
criteria number four passive income you
might have been thinking for quite some
time you know what
i've got my job income i've got my house
but i've
heard i've been actually subscribed to
kris krohn's channel and i see that
every time that dude buys another house
his passive income goes up because his
money's working for him
he basically buys a house he rents it
out
and let's say his mortgage is 2 000 a
month but the people pay
three thousand a month there's a
thousand left over dollars a month
that's called
passive income this could be the perfect
time for you to actually get in the game
of real estate starting a business or
doing something different
if you're interested in long-term
passive income instead of just a
one-time
lump sum of capital consider keeping the
home
renting it out and as long as you're
able to effectively manage the property
you'll acquire
more money in the long run in fact in a
few minutes i'm going to open up a
calculator and i'm going to run the
exact math on an example
you can go to the same website do it
yourself and we're actually going to
look at how much money would you make
renting it
versus just selling now before we run
that math i want to talk about the fifth
and final criteria of whether or not you
might be underwater
honestly it's highly unlikely but
underwater is a term that's used when
you owe more than the house is actually
worth check it out
you may not be able to afford to sell
your house because you're
under water on your mortgage meaning
your loan balance is greater than the
home's current market value
in this case turning your home into a
rental property
may provide the opportunity to gain some
equity before selling it
in the future well chris you've given me
a lot to consider but does it really
answer my question on whether i should
rent or sell
well if it's not clear at this point
we're actually going to do the math
there's a calculator that we're going to
go to right now and i'm going to show
you how to do this yourself
the national association of residential
property managers or in other words the
narpm.org they've got this calculator
that you can go and actually use
yourself
but i've plugged in some of the
information from the example that i gave
you earlier because i want you to
actually see the financial difference of
holding on to it and renting versus
actually selling in this example we now
have a home
that is worth 350 000
and the price that was paid for it
originally when you did get it
was hundred and fifty thousand dollars
this was a house where you put down
probably like a three and a half percent
down payment
so your actual mortgage at the time of
purchase was two hundred and thirty five
thousand dollars
well that was a few years ago and as
you've been making your payments you've
been paying it down
and currently the mortgage balance is
200
000 now from here check this out
let's assume that you have an interest
rate of 4
on this property and let's also assume
that your mortgage payment is
one hundred and twenty two dollars i'm
going to say that between this and the
next house that we're buying that
there's no mortgage difference if you're
just pushing it forward
we're not going to worry about taxes but
let's assume that we can rent out this
property
for sixteen hundred dollars a month and
even though appreciation is normally
4.68 let's assume that based on all the
market conditions we've been looking at
that we're actually looking at 10
and that you plan on renting it for 5
years by the time you sell it
the big question is what was a smarter
choice was it better to actually rent it
or was it better to sell it
well check this out the automatic math
that says here that if you rent out your
property
you'll have 97 000 more wealth
in five years versus actually just
selling it and you know what this really
means
this really means that this is why
investors win this is why wealthy people
hold real estate
this is factoring in a lot of the
benefits of why people try to hold on to
property as they acquire more think
about it for just a second
when one property goes up 10 value you
feel like a stud you feel like a winner
but when you have five properties going
up in value or like me hundreds of
properties
guess what i'm now making millions of
dollars as the market just flinches
now check it out ninety seven thousand
dollars on a five-year rental
might sound exciting but i'm going to
see if i can tempt you with something
that i think is way more exciting
check it out here's your home that you
sold
and when you sold it you got a hundred
and fifty thousand dollars
imagine for a moment that you put a
hundred thousand dollars towards a new
property
and this is going to be your home but
there's
50 000 left over did you know
i can show you how to buy a piece of
real estate entry level
in a market and every five years
sell it and exchange one for two and
five years later
trade two for four and then four for
eight
well over a 20 year period of time
this fifty thousand dollars has the
possibility of growing into
4.3 million dollars
and you got to be thinking chris how can
a 50 000
investment in real estate over 20 years
turn into 4.3 million dollars
well that's because when i buy real
estate my standard
there has to be a minimum 25
roi or a return on investment
this is why i became financially free by
the age of 26
and i've helped other people become
multi-millionaires frankly doing the
exact same thing
you see a lot of people are just
thinking about increasing their
lifestyle they're thinking about a nicer
home
they're not really thinking about their
financial future but what if i told you
that delaying just a little bit of
gratification could open up the doors
to massive wealth down the road a
retirement that you wanted
and frankly living more a life that
matched your dreams that are inside
well if one house can become four
million dollars what do you think the
hundred and fifty thousand dollars could
do
that could turn into over potentially
thirteen million dollars
and if that sounds exciting to you you
definitely need to click the link below
and get a free game plan see a member of
my team will sit down with you
and basically say all right you've got
options should you rent
should you sell should you buy should
you build your life is probably a lot
more complicated than what we've been
talking about here
and if you want to know what i would
actually do i've trained people on my
team to give you
an exact game plan of precisely what i
would do if i woke up today in your
financial shoes
and that might actually include
partnering with me and taking some of
this money and leveraging my billion
dollar track record on 5 000 homes
and showing you how to make this kind of
money to create an entirely new
financial future
if that sounds good to you definitely
click the link below let's get you some
options and see if it improves your
perspective
or at least gives you some other ideas
to be thinking about
hey thanks for watching today if you're
not a subscriber fix that right now i'm
dropping videos
all the time to help awaken your
financial genius and if you are a little
bit curious what it might look like to
partner directly with me no matter where
you live in the world and
literally be fully passive as i leverage
my turnkey system of 200 experts
i recently had someone find me on
youtube and and wonder just how fast
they could go
and in this video right over here you
get to watch ryan and his wife
go on a crazy journey of buying several
homes in their first six months
that changed everything for them do i
fantasize what would happen if those
bolts just ripped out because i weigh
250 pounds
a little bit is that helpful not in
particular
am i happy the faster i go down yes