Self-made millionaire: 'Don't buy a home—unless you can afford to waste money'

I became a millionaire because of my love for investing in real estate. Buying a single- family home to live in isn't always a good idea.

I bought my dream home in Los Angeles when I married and had a baby. I didn't see a return on the money or time I spent in my house. I used the equity to purchase a few rentals. My family rented again.

I still support owning a home. I own three homes, two of which I rent out, and the third is my primary home. For a lot of people, owning a home takes money out of their pocket.

Right now with rising inflation and high home prices, buying a house isn't a good idea.

You bought a home for $100,000 and put a $5,000 down payment. You sell the house for $200,000 a decade later.

After you paid your mortgage, you turned $5,000 into $100,000. The cost to own that house was not calculated.

• 10 years of interest at 6% each year: $60,000
• 10 years of property taxes at 2% each year: $20,000
• Real estate fees of 6%: $6,000

There is a total cost before maintenance.

You can get a net return of 24 percent of that $100,000. We did not include the cost of roof, plumbing, paint and other maintenance fees when calculating the return on investment.

A rule of thumb is to spend 1% of your home's purchase price on maintenance each year, but it can be more expensive during times of high inflation.

Don't buy a house if you're expecting to make a lot of money. You should only buy when you have enough money to pay the mortgage, property taxes and upkeep.

After all the mortgage payments, property taxes and maintenance, true real estate investments give you monthly passive income.

If you don't have monthly cash flow, your home's value is tied to having a qualified buyer and who likes your home. It costs you to live in it while you wait to make money.

It's easy to find someone who wants to make a profit when selling a rental property.

If you find a trophy property that's selling below its value, can afford to pay in cash, and is 99% certain that there's a profitable exit due to the surrounding market, you should buy it.

You are limited to how much interest you can write off and only allowed a tax exemption on the sale of a single family home every two years.

The tax benefits increase when you go from investing in your house to investing in income-earning real estate.

Income from rentals is not taxed since it is a repayment of capital. There are no limits to how much interest you can write off. Maintenance and furnishings are deductible as well.

It's possible to make passive income off of real estate by investing in rental properties.

Unless you can afford to waste money, I don't recommend buying a home.

A home can be a place to call your own, but it can also be stable. There are many other options if you want to create wealth.

I don't think owning a home should be seen as the American Dream. It's a place to live for most of the time.

Grant Cardone is the CEO of Cardone Capital and the author of The 10X Rule. A $5 billion portfolio of multifamily projects is owned and operated by him. You can follow Grant Cardone on social media.

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