Buy vs Rent Comparison – Which is Best for You?

You will find some extreme opinions on the question, “Is it Better to Buy or Rent a Home?” that give an absolute answer, and with them, valid arguments in favor of either buying or renting. Let’s explore those arguments first.

Benefits of Buying

  • Stability – you don’t have to worry about increasing rent or the landlord selling the home.
  • If you finance, a portion of your payment goes toward principle.
  • Homes tend to appreciate over time (although, not as much you may think).
  • You can make alterations and upgrades as you wish.
  • Some tax benefits offset ownership costs.

Benefits of Renting

  • Flexibility of not being tied to one spot. Ending a lease is a lot easier than selling a home.
  • Avoid “hidden costs of buying” including repairs, maintenance and similar expenses.
  • Benefit from investing what you would have spent on down payment and closing costs.
  • You get a place to live – against the notion that you are completely wasting money.

It is hard to argue against these benefits, and they should all be considered when making your own decision to rent or buy. You may find when reading opinions on which is better, many of them “seem” correct. There is a reason for that. There isn’t a single answer, unless you count the one that can be very frustrating and unhelpful if not explained — “It depends”.

2 Main Factors to Consider for the Buy vs Rent Comparison

1. How long you plan to live in the home. This can be heavily influenced by the phase of life or career you are in, or simply your personality and preferred lifestyle. Younger people tend to move more often and prefer location flexibility to either maximize their career options or simply to experience different places. No matter the reasons, if you are uncertain of how long you may live in a given area or home, renting is the way to go, while staying in the home longer gives more favor to the purchasing option.

2. Current economic factors of your area. Housing and rent prices are not static, and the relationship between the two sometimes turns in obvious favor one or the other. Additionally, in more expensive areas like Manhattan, high prices may make renting the only viable option simply as an issue of affordability.

There is Not a One Sized Fits All Answer

While you will find plenty of advice that either renting or buying is always the best option, it really depends on individual situations. Let’s take a look at a few scenarios and decide what might be the best options given the circumstances.

1. 22 Year Old College Graduate Starting a New Career


Income: $47,000
Less than $10,000
Time expected to live in area: Unknown, wants options open to try different cities/areas.
Housing Prices: Low compared to historical average
Rent vs Buy: Monthly mortgage and maintenance expense slightly lower than renting

Verdict: Even though housing prices are historically low and current costs of renting vs buying favor buying, it is likely best to rent in this scenario until the individual is ready to commit at least 3-5 years to a given location and find more stability and direction within their career.

Generally speaking, an early career is not an optimal time to purchase a home. Young workers are more likely to move during the early part of their career to seek better opportunities or simply explore different lifestyles of another location while they have more flexibility.

While anything close to $10,000 in savings might sound like a lot for a college graduate, it isn’t enough to justify putting any of that toward a home especially given the low time commitment to a given area. It is likely best to keep that as an emergency fund and start to save an additional amount toward a down-payment on a home for the future, or a mixture of other mid and long term savings and investments.

2. Young 30’s Couple, Dual Income, Stable Careers, 1 Child with Plans for 1 More


Income: $120,000 (household)
Savings:  $95,000
Time expected to live in area: 7+ years
Housing Prices: Moderate compared to historical average
Rent vs Buy: Monthly mortgage and maintenance expense are roughly equal with monthly rent

Verdict: This scenario has all of the hallmarks of stability, assuming the companies or industries each spouse is in are relatively stable. In this case, it should be safe to buy OR rent. 

This family is looking to “set roots” and find a stable environment to raise their kids.

They expect to live in the area for at least 7 years which is a conservative minimum. In addition, they have a decent amount of savings to put down. As long as they purchase a relatively modest home ($300,000 or less) they will have some left over as an emergency fund. However, they should factor in the plans to have additional children and not purchase a home they will quickly outgrow.

The economic conditions of historical housing prices, as well as the rent vs buy comparison make it a rather safe choice to buy.

However, renting isn’t necessarily a bad choice if they would rather add to their savings a bit or haven’t decided on an area to purchase yet.

Final Thoughts

While it may be an unsatisfying not to have a definite recommendation, we are more interested in giving thoughtful and honest opinions. There is no clear answer to the question. The decision to buy or rent is one that you should give careful consideration. Between the two choices, you should give far more thought before buying since it is likely the single largest purchase you will make in your life.

Regardless of the choice you make, we wanted to provide you with some things to think about, as well as some scenarios to help you think through what is ultimately a very personal choice.


Co-Founder, Licensed Real Estate Agent, Online Marketing Specialist, Investor, Family Man

One thought on “Buy vs Rent Comparison – Which is Best for You?

  • March 10, 2018 at 4:09 pm

    This reminds me of many conversations I’ve had with my in-laws; they are totally about buying a home over renting.
    They don’t travel to much so they think everyone buys a home an stays in it for 50 years, I’m much more of a traveler and I think the younger generation is shifting more toward renting over buying. Good read.


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