Tony Robbins to Millennials, Don't buy a Home

By
Real Estate Agent with The Virtual Real Estate Team 104556

Tony Robbins has been writing investment books lately and on an article on the home page of MSN, he said that young people should not buy a personal home. The simple reasoning he gave for this is that a home to him is not a good investment for them. His feelings is that without income being produced they are only buying a hedge against inflation. Now I know that Mr. Robbins is not against home ownership completely because he has a pretty nice spread as his main home, but I found the advice interesting as well as fitting with my experience with younger California investors who work in the tech sector.

Recently I have had a good number of Millennials who work at Facebook and Google buying investment homes in the Oklahoma City area. Almost all of them don't own a home but they are wanting multiples of investment property. Maybe one compelling reason for not buying is the cost of homes in places like Palo Alto where it is better to rent than to buy, and there philosophy which was different from what I learned growing up in that they would rather have $4 million worth of investment homes instead of one residence. Now this may not apply to areas where affordability is high, but in my 26 years of real estate I have seen younger people buy personal homes when they were far from ready for the responsibility. 

When it comes to owning a personal home I should be an indoctrinated robot since I have spent years being in local, state, and national leadership and it is constantly drummed into you that everyone should own a home and it is the American Dream. Unfortunately for some it becomes the American nightmare, and for many after 2006, the worst nightmare. I understand that I am writing this as a real estate investment specialist, but even with that I need at least 90% of a neighborhood to be owner occupied since that is what drives appreciation and also because those people will pay more for a home. Honestly, many pay more because they make irrational decisions, but let's get back to millennials.

If I was working with first time buyers under the age of 34 here is the advice I would give them: Buy your first home as an investment even if you plan to live there. Have someone like me evaluate what the economic value of the property is and don't sell the property when you move, instead rent it. I did this with one of my agents and in fact he also rented out a room to another person so he barely pays for the mortgage. I do think that Tony Robbins is on to something although I wouldn't call it a universal truth. For me any owner-occupant purchase should be evaluated for the investment value of the home and I know that top notch REALTORS® do this if for no other reason because they will one day resell it. I think that sounds a tad cynical but i am old and grouchy at times so let me also say that top notch REALTORS® can also be a caring group. Basically I am saying not only do I agree with Mr. Robbins, I think that I will disagree with the NAR mantra of home ownership for all. 

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Rainmaker
2,919,206
Myrl Jeffcoat
GreatWest Realty - Sacramento, CA
Greater Sacramento Real Estate Agent

I think the real estate bust of 2008 soured a lot of folks on homeownership. We must remember that a lot of these young millennials went through a trauma while as kids they watched without much control, while their parents lost the family homes, and were tossed out into the street.

However, I have been licensed since 1981, and I've seen a lot of real estate cycles come and go.  Over the long run, real estate has shown itself to be an excellent investment, whether it's a home to live in, or as an income property.

One caveat I would make however, is I wouldn't recommend trying to turn homes into bank ATMs.  In addition to the really bad mortgage investing that banks did while ramping up to 2008, homeowners, who continually drew cash out of their homes, got caught in the crossfire!   

Mar 27, 2017 04:33 PM #1
Rainmaker
2,919,206
Myrl Jeffcoat
GreatWest Realty - Sacramento, CA
Greater Sacramento Real Estate Agent

CONGRATULATIONS Joe, on having this blog FEATURED in the Old Farts Club group!    

Mar 27, 2017 04:34 PM #2
Rainmaker
3,278,845
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

I am actually seeing a sharp increase in young people buying homes. Lots of new marriages, new families and new homes here in NH Joe Pryor. One common demonator is they all have good jobs.

Mar 27, 2017 04:35 PM #3
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Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Joe

It's certainly an interesting perspective, and I think for some it probably IS the right way to go, depending on your financial objectives and how important having your own home really is. I'll be interested to see what others have to say.

Jeff

Mar 27, 2017 04:42 PM #4
Rainmaker
4,090,473
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Good evening Joe Pryor ,

Interesting perspective..I find the young people who have good jobs want to buy a home but not necessarily what their parents would have purchase and not in the areas they would have selected.

Mar 27, 2017 05:30 PM #5
Rainmaker
849,035
Troy Erickson AZ Realtor (602) 295-6807
Good Company Real Estate - Chandler, AZ
Your Chandler, Ahwatukee, and East Valley Realtor

Joe - I like your idea of buying a home, then when ready to move up or move out, use it as a rental. Then rinse and repeat, and before you know it, you will have multiple rental properties.

Mar 27, 2017 07:16 PM #6
Rainer
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Mick Michaud
Distinctly Texas Lifestyle Properties, LLC Office:682/498-3107 - Granbury, TX
Your Texas Lifestyle is Here!

A blanket statement as universal advice is not good.  One size does not fit all.  Each situation has to be evaluated on the buyer, their motivations, objectives and the property/area. 

Mar 27, 2017 07:40 PM #7
Rainmaker
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Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Here is another "guru" who got rich of  real estate agents... the ones that needed motivation... I am sorry I ever attended his seminars and bought his CD's and tapes... now he is becoming a mortgage guru and does not know .... never mind don't make me go over the edge Joe....Endre

Mar 27, 2017 10:57 PM #8
Rainmaker
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James Dray
Fathom Realty - Bentonville, AR
Exceptional Agents, Outstanding Results

Good morning Joe. I find this interesting on Mr. Robbins.  While I agree home ownership is not for everyone, To make a blanket statement may not be the wise choice for him.

Mar 28, 2017 02:20 AM #9
Rainmaker
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Nina Hollander
Coldwell Banker Realty - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

I'll admit it, Joe... have never been a fan of Tony Robbins... and this makes me even less so. Buying any kind of home is such a personal experience and the value of doing so is unique to each individual. Investment homes are not right for everyone; owning a personal residence is not right for everyone. I hate blanket statements like this one.

Mar 28, 2017 05:02 AM #10
Rainmaker
2,221,319
Sharon Tara
Sharon Tara Transformations - Portsmouth, NH
New Hampshire Home Stager

Interesting and I can see how he is right for some, but certainly not for all. My three millennial children all own homes...one of them is on her second home...bought with the proceeds of selling her first. 

Mar 28, 2017 06:53 AM #11
Rainmaker
1,590,139
Georgie Hunter R(S) 58089
Hawai'i Life Real Estate Brokers - Haiku, HI
Maui Real Estate sales and lifestyle info

I hate to think of homes as only investments.  Surely a home is where you can be your own master and not have to suffer rent increases or getting kicked out.  Owning your own home gives a real sense of security that renting doesn't bring.

Mar 28, 2017 09:01 PM #12
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Debbie Reynolds, C21 Platinum Properties
Platinum Properties- (931)771-9070 - Clarksville, TN
The Dedicated Clarksville TN Realtor-(931)320-6730

Real estate is a good investment and to make broad statements like that is not good. I do commend the millenials for buying investments even though they haven't bought a personal home. 

Mar 29, 2017 07:32 PM #13
Rainmaker
3,253,144
Lou Ludwig
Ludwig & Associates - Boca Raton, FL
Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC

Joe

It's far better to buy a home and to be a home owner . . . . then to be a life long tenant and pays the investors mortgage.

Good luck and success.

Lou Ludwig

Apr 07, 2017 07:45 PM #14
Rainmaker
526,535
Dave Halpern
Keller Williams Realty Louisville East (502) 664-7827 - Louisville, KY
Louisville Short Sale Expert

Millennials will soon be a major force in driving the market. The more we can learn about this enigmatic home buyer, the better.

Aug 05, 2017 09:42 PM #15
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Joe Pryor

REALTOR® - Oklahoma Investment Properties
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