Renting vs. Buying

Ray’s Take: Buying a home used to be the pinnacle of living the American Dream and the trophy of your financial success. Conventional wisdom held that you either paid your own mortgage or someone else’s. 

But in recent years people are questioning whether to buy that starter house or just wait to buy the dream house they will live in for 40 years. A new generation is choosing to rent instead of buying, and they may be on to something. 

Most often, people choose to rent because the housing in the area is simply too expensive. But there are some other reasons that prove the logic of renting over buying. 

Having flexibility is a great reason. If your job transfers you often or if you prefer to explore different areas and locations of the city, renting is probably the way to go. When you are a homeowner, it is much more difficult to relocate because of all the fees associated with buying and selling a house. If you have had a real estate closing, take a hard look at that settlement statement. There are a lot of hands out. 

People also choose to rent to save money in the short term. Renting should allow you to save more for the down payment needed to purchase a home. You also avoid real estate taxes and maintenance and repair costs that come with owning property. 

On the other hand, if you plan to stay in the same place for more than five years, buying a home could be the smarter choice. Staying in a house for five years or more means you are more likely to recoup what you paid in transaction costs and generate a return on your investment. According to Data Solutions’ 2017 Rental Affordability Report, buying is more affordable than renting in 66 percent of American housing markets. 

If you are having trouble deciding whether you should rent or buy, checkout the “Rent vs. Buy” calculators at or to see what you can afford and always consult with your trusted financial adviser for advice.

Dana’s Take: A friend of mine just experienced the good and bad of renting. Single, with grown kids, she was excited to sell the big house and rent a cozy duplex with a charming front porch. After one year, her landlord notified her that he would not be renewing the lease. That is the ugly side of renting – the landlord retains the right to un-house you, no matter how much work you’ve put into the property. 

Soon after, she discovered the good side of renting. She found a new apartment with better security and a new kitchen and bathroom. Flexibility is the upside of renting. 

Home is where the heart is, whether you rent or own.

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