The Game of Homes: To Buy or To Rent?

Marshall Rathmell |


Moving into a new home can be a big leap in many people’s lives, but even more so for young adults. Whether it be graduating college, getting married, or having a child, there are many factors to examine when deciding if it’s better to rent or buy a home. With the way the housing market has been increasing recently, more and more people are questioning whether they should buy or rent. In this blog I’m going to go over the criteria that will save you money and time when making this next step in life.

First, let’s go over the pros and cons of buying a house. The first thought of buying a house that comes to many people’s minds is how good it would feel to own something. It has been engrained that part of the American Dream is to own your own house; to have a sense of belonging and community. This isn’t always the smartest decision financially. While it may be the same price as renting the house, many forget the down payment of around 20% that we suggest putting down to avoid private mortgage insurance costs.  Homeowners also spend about 2-3% of their home value in repairs and upkeep per year. These repairs can include yard maintenance, busted pipes, roofing repairs, and all sorts of other things. These costs can begin to add up quickly, especially if you are moving often and have to replace the same items on each home.

Speaking of moving into new homes, many people turn around and say that they can just sell their home for a profit and move whenever they please. This isn’t always the case, as many forget about the costs of actually selling their home. Sellers end up losing around 10 percent of their home value in costs of prepping a home for sale. These costs can include the 6% agent fee, inspections, needed repairs such as drywall or paint, and more. This makes that profit from selling look a lot less attractive.

Now let’s get into the discussion of renting. While renting doesn’t look cost efficient because you’re throwing money into something that won’t produce equity, it is when living somewhere short-term (less than 10 years in this case). By putting off that dream of owning a house when knowing you won’t live there long-term, you can end up saving money. By renting, you avoid those repairs on the house, as well as a down payment and selling costs. Once your lease is up, you can pick up and go to a new location with no strings attached.

Overall, when it comes to renting vs buying, if you see yourself and your family living in the home long-term (around 10+ years) then it can be financially smarter to buy than rent, because you will eventually pay it off and own it. On the other hand, if you see yourself moving in shorter term, then it might be better to rent, and avoid the recurring costs of repairs and selling costs from house to house.