Tailwind Talks
Tailwind Talks is a podcast for high-performing professionals who want to build serious real estate portfolios without leaving their careers. Hosted by an airline and military pilot turned investor, it dives into actionable strategies for scaling your real estate portfolio while balancing the demands of a full-time job.
Tailwind Talks
Why I Rent While Owning Millions in Real Estate
Challenging conventional wisdom can be difficult, but sometimes the numbers tell a story that can't be ignored. As a successful real estate investor managing a multi-million-dollar portfolio, I've made the counterintuitive choice to rent my personal residence rather than own it—and today, I'm sharing the eye-opening math behind this decision.
After comparing my comfortable $1,900/month rental apartment to a similar condo for sale in Milwaukee, I discovered a staggering financial gap. The comparable condo, priced at $475,000, would cost approximately $4,800 monthly when factoring in today's 7.25% interest rates, $908 in monthly HOA fees, substantial property taxes, and insurance. That's a $3,000 monthly premium just for the privilege of saying "I own my home"—with no meaningful difference in living experience.
This financial reality raises important questions about the true cost of homeownership in today's market. That extra $3,000 monthly represents significant opportunity cost—money that could fund memorable experiences, quality-of-life improvements, investments, or simply provide financial breathing room. When I run the numbers, even accounting for potential appreciation, the equation often doesn't favor buying right now, particularly for primary residences in certain markets.
The disconnect between housing costs and financial reality has created what I see as a market arbitrage opportunity for renters. If someone like me—with substantial real estate experience and resources—finds current ownership costs prohibitive, how are individuals just starting their careers supposed to enter the housing market sustainably? Sometimes the financially savvy choice is patience—continuing to rent while building savings and waiting for market conditions to shift.
Whether you're considering your first home purchase or reassessing your housing situation, I encourage you to run your own numbers carefully. Look beyond the emotional appeal of homeownership and examine what makes the most financial sense for your specific circumstances. Share your thoughts on the rent vs. buy equation in your market—I'd love to hear your perspective on this crucial financial decision.
What is up everybody? My name is Cole. I'm a part-time real estate investor, full-time legacy airline pilot and a part-time military instructor pilot. Today's a quick video just expanding on top of the most popular video I've had so far, which was me talking about how I own a couple million dollars worth of real estate, but I still rent this place behind me. I don't own it Full disclosure. I rent this place. I have no ownership stake in this building. And why do I do that?
Speaker 1:Well, today I actually went and looked at a condo that was similar to what I live in right now. This is a one bed, one bath, thousand square foot. It's a nice apartment. I mean it's, it's. You can see what it looks like. Like some people might think it looks corny or whatever, but it's a nice. It's a nice enough apartment. I mean you can see what it looks like behind me. It's nothing crazy, but it is nice. It's got a pool, it's got a balcony, it's got all that kind of stuff.
Speaker 1:And I was like, okay, let me go find a place that's similar to this to see if my theory, which I said in that video, is actually correct. Cause I was like, maybe I'm wrong, maybe the market is better than what I thought, and I was shocked at what I found. The closest thing I could find in Milwaukee was a one bed, one bath, 1100 square feet, so 100 square feet larger full disclosure. But it also had a lot older finishes. It was about 20 years out of date. I would say a lot of the uh kind of the, the lighter wood tones uh, not a huge fan of those, but anyways, I looked at this.
Speaker 1:They want 475 000 for this place and it is when you start doing the math on it is absolutely nuts. When you start doing the math on it, it is absolutely crazy. So what I did was I went through everything, I've got it all up on the computer over here and I'll just kind of talk about it. But to kind of put it in a frame of reference, I said I'm going to put 10% down on it to kind of give it a fighting chance, and what I came up with is that even after putting 10% down, which is about $50,000 based on the purchase price, and you start doing all the math on everything, it is not even close. It ends up costing about $4,800 a month to own that condo, versus my $1,900 a month to live in this apartment right now and the way that that all breaks down is it's the purchase price, obviously.
Speaker 1:Then you have 7.25% interest rates of what I planned for, because that's about what it is right now. But you've also got $908 a month for the HOA fees or the condo dues or whatever you want to call them, the money that you pay people to fix the roof on the building or whatever else, the elevators and who knows what else. You got that going for you. Then you've got another $10,800 a year in property taxes. You've got the cost of the loan itself, right, that's the majority of it, the principal interest on that. And then you've also got, I plan for $100 a month in insurance.
Speaker 1:I don't even know if that's accurate. I've never owned a condo, so I don't really know if that's true or not. I could be undershooting, I could be overshooting it, but we'll just say $100 a month for that. When you add it all up, it's $4,800 a month, like I said, versus my $1,900 a month. It's about a $3,000 spread almost between the two for the exact same product and honestly, I would argue in some cases that this is a better place than that and it's going to cost you an extra three grand a month and the only thing that you get out of that in return is to say, oh, I own this place, I'm a homeowner, I've achieved the American dream and honestly, I think that's a bunch of BS.
Speaker 1:Like who cares if it's literally taking $3,000 a month away from you which you could be using? Maybe who cares about investing? What about going and like doing a trip with your family, or going getting a car that you wanted or whatever, investing in something, whatever you want to do, but the spread is $3,000 a month and forget investing and taking that money and putting it in the market. What about going to use it to improve your quality of life, whatever that means to you? Maybe that means you're going to go get Botox. Maybe that means you're going to go on a trip with your family. Maybe that means that you're going to quit your job but all these other things that you could use that money for and you're getting tied up just to be able to say that you own a condo in Milwaukee which nobody really cares about. So I just thought it was absolutely crazy and it just reaffirms to me that right now, I think renting could be one of the most powerful things that people could do is not cool. No one's going to respect you for it because they're gonna be like oh, this guy doesn't. It reaffirms to me that renting could be one of the more powerful things that you could do in this market, because the cost of ownership is just through the roof and that's just for one condo.
Speaker 1:I just looked at whatever I could find that was the closest. It took me a little bit to figure out exactly to find something that was the right fit, but once I did I was like looking around, just in general, and I was like good lord, especially in the condo market in Milwaukee. But really in general, the prices are absolutely nuts and the cost to borrow right now is so high that I think sitting it out for a little bit and and renting is actually a huge arbitrage on your money and you can actually stretch it a lot further. I'm now thinking, okay, if this is what's costing me to get something equivalent in the condo market, what if I raised my price up to meet what that condo would cost me? So let's say 48, $4,900 a month to go rent somewhere, what would that get me? I'd probably get the Taj Mahal and I kind of looked around a little bit. There's a lot of penthouses and stuff you could rent for around that price.
Speaker 1:So when I'm looking at it, when I see the market right now, I'm thinking like the rental market is actually kind of an arbitrage. And that's coming from a guy who owns rentals, like that's my whole side hustle is owning rentals and renting them to other people, but yet I'm a renter myself and I think that speaks volumes. And now that I looked at an actual example, I just can't believe that that's what the market looks like right now. And I had that feeling and that's kind of why I'm renting like just based on what I've seen in the market. But I never actually looked to see what would be comparable and once I did, I was totally shocked. So I can only imagine that if Milwaukee is doing that right now, that there's a lot of markets that are in the same situation.
Speaker 1:If you're from a market that's getting squeezed like that, let me know. Maybe you're also renting. Let me know, maybe you're also renting. Let me know where you're renting, why you're renting, if there's some logic behind it. But I'm looking at myself and I'm saying I've got maybe a $6 million portfolio. Now I'd have to go look at it.
Speaker 1:But when I'm looking at that, versus what I'm doing in my actual life and I'm like, if I'm doing this, if I'm renting because I'm getting squeezed between my normal day job the 737 you can see over there and flying for the military and having the rentals, if I feel uncomfortable trying to buy a property right now, then how does the person that's working at Starbucks or has a retail job at Target or whatever the case may be, maybe just starting their career after college, how are they justifying buying a house? And I can give you a ton of anecdotal stories about people that I know that are buying houses and selling houses and doing these things that are kind of overextending them, I think. But they don't agree, I guess, or they don't see it, and I'm not going to bore you with that. Everybody has their own stories, but I just had to get this out there to say I think, right now, if you're on the fence of buying or renting continuing to rent despite the challenges of renting, despite the annoyances of living around other people like that I would almost recommend to continue to rent and just ride out the storm. Maybe. Continue to bolster your savings, your investing and try to get yourself into a position where, when you do go to buy something, it's not stretching you to the nth degree, it's not stretching you to the edge of the earth to try to pull it off right. That's my perspective. I'm sure there's somebody else out there that would counter that and say today's the cheapest it will ever be. Next year you're going to look back at this and say you wish you bought, but I honestly don't even care if if that condo goes up double next year. I don't really care that much because in my mind I'm like the risk of paying an extra three grand a month just to hopefully get a little bit of equity down the road. Like what is the opportunity cost there and what does that do to? When you actually do the math on the, the money that you've paid down with interest. When you actually do the math on what you're paying every month on principal and interest to get that loan taken care of. When you actually do the math on what you're paying every month for principal and interest and you take that and subtract that from whatever the equity growth would be from this year to next year, I am not even convinced that you would actually make money. Even if it went up 10%, think you may still be upside down, and usually I factor in inflation and things like this I just think that right now it might be the best time to just hang on and just sit on your hands and do nothing. As far as buying a house for yourself uh, but then again I could be proven wrong. I just think right now, when I did the math on this, I was like I could not believe. I was like an extra three grand a month for literally the same, if not slightly worse, of a product. I'll continue to rent. Let me know what you think.
Speaker 1:I appreciate anybody that's taking the time to watch this. I was thinking today while I was at the gym. There's so many places you could spend your attention. You could be on Netflix, you could be on Hulu, you could be taught, you could be on Twitter, instagram, facebook and you could be on YouTube and you could be watching anybody doing anything on any of those platforms. Yet you're here listening to my video. It means the world to me and I'll continue to put them out. I'm going to keep doing this until I die and or I can't afford internet anymore. So I really appreciate it and I'll talk to you guys soon. See you.