Renting vs Buying w/ Sam Parr

Do you know Sam Parr? He created The Hustle and sold it to HubSpot for roughly $27 million. Since then, he started the My First Million podcast and Hampton, a network for high-growth founders.

I tell you all of that because he is well known, has had continued success, and he recently weighed in on the Renting vs Buying conversation.

I commented on his post and we went back and forth. You can see his post here.

Here are three reasons why I disagree with him.

1. Leverage:

Leveraging other people’s money is a core principle in real estate investing. And yes, even just owning one house is an investment. It’s why I think 96.3% of the time you shouldn’t sell your home with a low interest rate because you are borrowing other people’s money at a historic low rate. Hence, BUY RENT BUY.

Here’s my initial comment on Sam’s post.

When comparing real estate vs. the stock market, it’s not apples to apples. When you invest in the stock market, you are using 100% of your own money. When you invest in real estate, you are investing anywhere from 3-20% down.

A million dollars in the stock market is a million dollars. A million dollar house is $200,000 of your money to ultimately own a million dollar asset that appreciates in value.

2. Security

Sam responded to my comment pointing to the link in his reel where he breaks down all the numbers. I’ve seen both sides of the argument supported with numbers, so for me there’s no clear black and white winner here.

With that said, here’s my response to Sam.

When I think of security, I am talking about being in control.

This was huge for my wife in our new place. We moved with a 5 month old and she highlighted the benefit of owning because she could do whatever she wanted for his nursery. Plus, we know where he will go to school and no landlord is going to change that for us.

Sam agreed with me here. Here’s his response:

3. Practical

You will always need a roof over your heard so a home is more than just a financial investment. It has immediate, tangible, and practical value.

When markets go down, smart investing is being able to ride the wave until it’s up again. Remember my post, “YO-YO ON AN ESCALATOR”? 

When the market dips, you still have a house that provides shelter. With stock, you don’t have anything to show for it. There’s no practical application of your investment. It’s just a number on a screen that you need to hold onto until the market is up again.

I believe in real estate wholeheartedly. It’s why I own multiple properties and it’s why I became a realtor in Santa Clarita, CA so I can help others build a financial foundation and create long-term wealth for their family.

With that said, there is no “right answer.” Sam isn’t 100% right and neither am I. There are so many factors in play that dictate what would be best for you. Sam is a great example of that. Despite believing that renting is the better investment, he thinks he will own a house again someday.

Everyone’s situation is different. Everyone has different goals.

It’s why I encourage you to outline your goals and crunch your numbers to determine your best next step.

You can crunch your numbers on my website. It’s 100% free, takes about 3 minutes, and it will give you a personalized next step.

This is part 1 of a new series I’m starting. I want to take a deeper look into renting vs buying. Where do you land in this discussion? Do you think it’s better to rent or better to own?

Let me know what you think and don’t forget to share this with that one friend who is trying to figure out what they should in today’s market.

See you next week 👋