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“Do NOT Buy A House!” (Warren Buffett’s Final Warning)

angeia1053 mins

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WHY WARREN BUFFETT DOESN'T INVEST IN REAL ESTATE:

1. It’s more difficult to make money with Real Estate than in the Stock Market.
Median home prices have increased an average of 4.3%, during a century when inflation averaged 3%. This means, if you just bought a random house – and did nothing but hold on to it – you would be earning just 1.3%, per year, above inflation. This does not include rental income, which could boost returns by an additional 2-6%+ per year. On top of that, you could also leverage your money – but this heavily depends on interest rates.

However, most people never take into account the time it takes to search for – and negotiate – the right home, the cost of inspections and closing costs, the effort of management, the coordination of ongoing repairs, etc. The Stock Market has increased an average of 9.8%, with dividends reinvested – with just the click of a button.

2. When Real Estate Drops, Stocks Fall Even More.
With the exception of 2 major real estate drops in 1929 and 2008 – for the most part, home prices have been fairly resilient, with very few ‘groundbreaking’ buying opportunities. This suggests that stocks have a lot more volatility, and it's unlikely you'll find a no-brainer buying opportunity throughout the entire housing sector.

3. When buying real estate, you're dealing with a single seller – and everything becomes negotiable.
The fact is: Real estate is not as liquid as stocks are; if you want to buy, or sell, it takes a SIGNIFICANT amount of time and effort. It’s a long, drawn-out, time-consuming endeavor, that doesn’t really become scalable – unless you’re dealing with apartment buildings or an entire portfolio.

On the other hand, if I want to sell stocks – it’s done in less than a minute, from anywhere in the world. You don’t have to wait for a buyer, you don’t have to negotiate, you don’t have to wonder if the deal is going to close; if the price is right, it’s just instantly finished.

The Reality:
99.99% of people can’t successfully get the returns that Warren Buffett does. For everyday investors, it's possible to make a significant amount of money in real estate, IF they know what they’re doing, IF they’re buying for an investment, and IF they’re prepared to put in the time and effort to run it successfully. Yes, it's significantly more work than stocks – but, your returns can also be higher under the right circumstances.

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105 thoughts on ““Do NOT Buy A House!” (Warren Buffett’s Final Warning)”

  1. -Here is a link containing the source material for each piece of research cited. I do my best to make my videos as accurate as I can, and the additional resources should help anyone who wants to look into them further – enjoy! https://docs.google.com/spreadsheets/d/1zmKxEOkbpyF1C6ToO2DUK_pXqLQgVLcquubfRP6gaYU/edit?usp=sharing
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    1. I can’t believe you’re still making money off this nonsense. There is no shortage of housing, scumbag Internet, grifter.

    3. Tell me why it doesn’t make sense to get options on leveraged etfs like tqqq and go out 2 years

    4. Richard Wolff just gave an excellent talk over at ‘Democracy At Work’ titled ‘Global Capitalism: On This May Day’ that covers a lot of Trump’s ‘progress’ up to this point from an economic standpoint! 🙂👍

    5. Steve,
      This video seemed like you were advocating for not buying a house period. Did I hear it wrong, or was the opinion only about it being a bad investment opportunity?

      Or…. are you suggesting that people should rent for the rest of their lives?

      I watch you often, and just only realized I wasn’t subscribed. Some of us(me) dont have a huge income and would be considered small potatoes on the investment end. Bad credit/decisions from youth, and trying to catch up now with much difficulty.

      I’m a huge fan, but I feel like in the 80s/90s, landlords only charged 75% of the note for the house(knowing they would be left with an asset in 20yr), but now they want renters to completely cover the note.

      I guess it gets weird when ppl with many rental properties suggest not purchasing. I just want my share of the American Dream, and not as an investment prop. But, it’s

  3. Having a home to call your own and having a portfolio of houses are two different things.

    Like Graham says, don’t let Buffet freak you out. If having a place to call your own matters to you and it fits within your budget, do it. Not everything in life is about returns.

    1. Great point that people too often forget. There is potentially tremendous benefits of actually living in a house that you love that is not easily quantifiable—that counts too. (Of course, you still need to make sure you can afford it.)

    2. Not only the home is not yours for 30 years but if you don’t pay your property taxes even on a paid home… Guess what will happen

    3. Also.

      His argument is that it’s hard to be an expert. And work to buy and maintain.

      But last time I looked, was also hard to be an expert to know what to buy in stocks.

    4. exactly. I am not investing. I want a nice place to live and lock in my biggest personal monthly expense.

    5. Everything should be about returns. If it don’t make dollas, it don’t make sense.

    1. Even then…unless you plan to be in there 7+ years, chances are…renting is cheaper

    2. @@GrahamStephanrent goes up 8.9% in california, common ppl lose in stocks

    3. @@GrahamStephan How? In Vegas everytime you go to renew your lease its crazy expensive it seems. When you have a locked in home price it has cost me way less. How do you calculate that, I am just wondering where your numbers come from. Thanks

    4. @@reesereese6510 Maybe depends on the State where you’re in?

    5. @@reesereese6510 location matters but it’s usually cheaper because you don’t have to pay for major repairs, like a new roof, HVAC, plumbing etc (unless your negligence damaged the items, ex HVAC filter)

    1. I hope he’s right because housing really needs to stop being an investment, and it should go back to being shelter.

    2. @@cozmo4694 and you should vote for politicians that will reduce regulations, red tape to increase supply of housing.

    4. housing is just a more expensive car. Both need a certain skillset to maintain and turn over for a profit

    1. Yup bought my house last year paying more than I was renting now and I have to spend thousands fixing everything housing is a stupid purchase in this new world

  7. It’s almost like we should stop treating housing as an investment/retirement fund.

    1. As an investment, houses should not be treated any differently than anything else.

    3. @@MCJSAhouses have maintenance cost insurance and property tax so definitely it’s different.

    4. @@Devinchi_Art True. That’s what Buffet was saying. As an investor, you look at cost to reward. This is what I meant. Real estate, as a class, is not “better” than any other class, just different. Graham is saying the same thing. When credit was cheap and housing prices were soaring in CA, that was a good deal, especially for a 20 something with nothing else to do but build a real estate portfolio. Not so much now, not even for footloose 20 somethings.

    2. Yeah, only people we like or agree with should be able to buy homes! Let’s get rid of freedom!

    3. They will be caught holding the bag when things go bad don’t think they’ll have the power forever

  9. Don’t buy homes so he can buy homes in bulk and rent them out to you lol

    3. gotta love warren now against property investing when he own so much of it still. Hes playing you

    5. doesnt take a genuis to look at the math. Even AI like chatgpt will prove you wrong that stocks give a better ROI lmao

  10. I’m tired of houses being seen as just an investment, every single Zillow listing I go to mentions something about an investment and instead of saying home buyer, they say investor. I just wanna buy a place I can live on.

    3. ​@louispolart bruh, he’s complaining about a legitimate systemic issue, not the channel

    5. Everyone should get financially educated, be an investor, and think like one. It should always be about growing wealth and making your money work for you, so that you can but anything you want at any time, including a house to live.

    4. @@mjs28sdo you really think its a good idea to let companies own the majority of homes in America??? You cant be that delusional lol

    5. They dont even buy/own .1% of single family home

      Red herring of building regulation being too strenuous and lack of construction workers.

    2. During the 80s and 90s Corporations did not buy single family homes. For whatever reason since 08 crash they bought all the homes

    3. This won’t do much for the most popular parts of the country where most people don’t live in SFHs. DC, NYC, Boston, Dallas, Chicago, San Francisco, Atlanta, all have the majority of housing units as non SFHs.

      We need to build more housing. Investment firms have literally cited housing “supply constraints” as the reason they are able to charge so much.

    4. I was hoping Trump might pass legislation.
      But I dont think so Trump is a real estate mogul.

      I think RFK Jr. could be the next President and RFK Jr. has spoken about this before.

    5. the only reason they buy them is so they can rent them out to people. If people stop renting from them and buy their own houses, the corporations will have no reason to. If you’re going to respond by saying that you can’t afford to buy a home, then the more rental properties there are on the market, the more competitive rent is, so it’s better for corporations to buy them along with private people and then each renter select the house that most suits them.

  13. I wish real estate would be seen more as place for people to live in and not investment vehicles

    1. You can rent if you want somewhere to live too. Buying is an investment.

    2. They should make it so that your first house has a very low interest rate and property tax. The more property you buy, the higher both of those get.

    3. ​@tyrantla7120 this is a very interesting thought that I have not heard before. I like it. 🤘

    5. That’s why when I invest in real estate in a few years I’m going to rent the units of the house out & be a good landlord, keeping up with repairs, good relations. I want to have competitive rents & give families a chance in this hellish market.

  14. I live at a place where you are not allowed to let a house or apartment sit empty.
    You have to live in it yourself or rent it out.
    USA should introduce the same rules to avoid corporations excessively investing in real estate.

  15. From my perspective, investing in real estate has been a mixed bag. While owning my home has been rewarding, the financial returns haven’t been impressive. In contrast, the stock market has offered more attractive opportunities for growth, so I’m shifting my focus there.

    1. That makes sense, real estate can be rewarding but doesn’t always deliver strong returns. A cautious investment approach is still key, allocating 40–50% of your portfolio to secure investments can help manage risk as you explore more growth-focused options. Consulting with an expert can also ensure your strategy aligns with your long-term goals.

    2. Absolutely. A lot of people overlook the value of expert guide, but it can be a game-changer. I’ve seen major growth consulting with Rebecca Dolva Watson,

    3. a top financial consultant with 20+ years of experience and $500M AUM. My portfolio grew 45% last year thanks to her advice on diversification and hedging. If you’re serious about investing smart, she’s worth checking out.

    4. @sheldongardner That sounds exactly like what I need. Where can I find more info on Rebecca?

    5. She has a consulting page where you can learn more and book a call, just look up her full name. I’d highly recommend reaching out, she’s helped so many investors build wealth while managing risk.

  16. Well there goes 13 minutes of my life I’ll never get back. All Warren said was stocks are a better investment which is common sense. Said nothing about now being a bad time to buy a house

    4. I don’t know a lot about stocks, but I do know that the housing market in my area has doubled in the last 10 years… a $200,000 house 10 years ago is 400+ now

    5. ​@@jonnycompost6242Most likely, the owners spent money on maintenance and improvements over 10 years. It’s usually 2-3% of the home price annually. Those expenses are hidden but maintain or appreciate the home value. So after you factor in closing costs, realtor fee, all the repair costs, your true capital gain will be much smaller than 100% when the home price doubled.

  17. *My 3 kids are still living in the basement past 30 years old and there is NO WAY they can afford a $500,000 house EVER!*

  18. Love how rich people tell other people not buy houses while they have 5 properties and currently under contract on another one.

  19. Guys, you will do yourself a HUGE favor by learning this one lesson. If an investor has a microphone, whatever they say is self-serving. They WANT to affect the market. So, if Warren Buffet says “buy real estate”, he means (if you go buy real estate now, it will help MY investments). If he says “real estate is not attractive” he means (if you stop buying real estate now, it will help MY investment plans). Not saying he’s wrong, just saying that YOU need to listen to what’s behind the message.

    2. This is spot on, however, Warren Buffet does have a history of aligning himself with the true direction of the market— and doing so early

    4. Facts. He’s pushing people to equities because he needs to create exit liquidity.

  20. As a 25 year old, I just can’t stop buying houses. It’s out of control.

    1. I’m 28. And I have a similar problem, but do you know what I like more than buying houses.. buying Ferraris to put in all of my garages in all of my houses.

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