Real estate agents are entrepreneurs who are invested in homeownership. So when Gary Vaynerchuk posted a clip that blasted homeownership, many agents took offense. On Episode 060 of The Real Word, I stood up for GaryVee, despite knowing how many agents would disagree. After hearing his additional thoughts on the topic, I still see both sides of the debate.
The majority of Gary’s audience is entrepreneurs – people who want to start a business or get their life and mindset together so they can start a business. As an entrepreneur with some savings, you have a choice. You can use those savings to put a down payment on a home, or you put that money into your business.
If you’re a business owner, for every penny that comes in that is not going into your business, you are holding your business back and stunting your growth. Of course, everybody needs the essentials of a place to live and food to eat, but the majority of your money should be going back to your business, especially when you are first starting.
That doesn’t mean entrepreneurs, along with everyone else, should never buy a home. You just have to weigh the costs and benefits for yourself. If you plan on staying in a home for at least five years and rates are low, buying can be a smart investment. Buying a home is a forced savings plan, and will build up your equity over time.
As a business owner, once you have established your business and are comfortable with your profits, saving up for a down payment on a house is a great step for your future. When you buy the home first, leaving you with NOTHING for your business – that is when your business will suffer.
With the many discussions and debates surrounding this topic, I am taking away this lesson: as a real estate agent, my job is to be honest with my clients. Yes, I am invested in homeownership. But I am also invested in entrepreneurship. And that means putting every client’s unique situation into context.
When I have a client who wants to buy a house but only plans on staying for two or three years, I sit down with them and go over all the costs associated with that. When you add up the closing costs and fees of buying and selling, they may actually lose money in that short of a time frame.
On the other hand, if I’m meeting with a family with four children who need a stable home, we will look into renting versus buying and what the best option is.
Homeownership will never die. The dream looks different than it did 20 years ago, when people saved up and bought a house first, and then focused on careers. Now, more people are choosing to wait to buy until later in life, but the dream is still there. My job is to help people achieve their dream at the most beneficial time in their life.