Real estate expert explains why 'buying a home is a liability' and how to figure out if you shou

• If you're financing a property, you're going to be paying a mortgage, which is a monthly expense.
• For that reason, you can't always think of a home as an asset, says real estate expert Ricky Beliveau.
• You'll want to run some numbers to help you figure out if you should rent or buy.

Unless you're buying a home in cash, think twice about considering it an asset.

"Owning real estate is an extremely important part of building wealth but the problem is, when you look at your home, it's not really an asset," Volnay Capital founder and V10 Development co-founder Ricky Beliveau told Insider. "Buying a home is a liability."

If you're financing the home, you're going to be paying a mortgage, he pointed out: "Yes, you are paying down principal." But, at the end of the day, a monthly mortgage payment is an expense. "It's not creating money for you."

Of course, rent is a monthly expense as well, which begs the question: Do I rent or buy?

"There are both sides of the table," said Beliveau. Home prices continue rising and the Fed has been hiking interest rates since March 2022, which makes borrowing more expensive. If renting in your market is going to be significantly cheaper, "that's the right decision."

You could then use that extra cash you're saving on housing to boost your down payment, fund, and buy when rates drop, he noted.

However, if you run the numbers on buying a property — meaning, you factor in the home price, mortgage rate, size of your down payment, closing costs, and maintenance costs — and your monthly payment is actually going to be the same or less than rent, the right decision is to buy and start building equity in your home.

Your mortgage payment is going to be affected by how much you're able to put down, so if you have significant savings and can put 20% or more down, that's going to lower your mortgage to the point where it might make sense to buy.

There are many other factors to consider in the renting versus buying decision, and it really boils down to the particular situation of each individual.

The main point that Beliveau is making is that owning a home can actually be a large expense, and he warns against assuming it's the smartest financial move to make.

How to buy a home that works as an asset

Between Beliveau's personal rental units, Volnay Capital's portfolio, and properties that he owns with partners, he has over 1,000 units, according to an asset sheet viewed by Insider. As a prolific real-estate investor, Beliveau understands just how lucrative real-estate investing can be. To use it as a tool to build wealth, however, he encourages investors to focus on acquiring an actual asset — something that creates money.

One way to do so is to buy an owner-occupied rental property. In this situation, your primary residence doubles as a rental property and, "that's an asset," he said. "You're paying down a mortgage with rental income, not the cash out of your pocket. Even if you're not living rent-free — even if you're paying $500 a month for your unit, but that unit is $3,000 a month — you're still creating value."

This is exactly how Beliveau got his start.

He used an FHA loan, which is a government-backed mortgage that gives people the opportunity to buy a home with down payments as low as 3.5%, to buy an owner-occupied triplex. He moved into one unit and rented the other two.

"The numbers worked out perfectly," he said. "The mortgage on it was about $4,000 a month and the two other units were paying $2,100 a month."

Over the next year, he renovated each unit and updated the building from a nine-bed, three-bath to a 12-bed, six-bath. Thanks to a year's worth of rental income and his finance-industry salary, Beliveau was able to afford his second property: a quadplex that he also financed with an FHA loan.

Beliveau still owns both properties today.

The first, which he purchased in 2010 for $930,000, is now worth about $2.6 million, he said, adding: "The rents were $2,100 when I bought it; now they're $4,700 a unit."

To achieve financial freedom, Beliveau stresses getting your first "rental asset" — not just your first rental unit.

Watch: Why it's so hard for millennials to buy homes

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