Comments on: Is Renting Really Cheaper Than Buying?

By: Jeremy Williams

Jeremy Williams — Sat, 01 Jul 2017 17:38:08 +0000

To determine whether it is best to rent or to buy a house one would have to decide how long they would keep the house for, if purchased; then compare the after-tax cost of the mortgage for that period, to the cost or renting for the same amount of time. If purchasing a house the opportunity cost of the down payment should be considered as well. If renting, a individual can use the money saved from not making a down payment and invest it. Historically, the return on a conservative portfolio with a 60/40 equity to fixed income allocation is better than the amount of appreciation on a house (granted with current equity valuations approaching all time historical highs this factor might now be irrelevant). Maintenance cost for renting are most likely factored into the rental rate, so I would say no money is saved on maintenance cost from renting. Also, taxes can significantly affect your overall mortgage expense, if an individual is in a high tax bracket then the mortgage interest deduction from their taxable income can substantially lower their tax obligation.
Typically, however if an individual can buy a house at a bargain, with a low interest rate and if they expect to live in the house 5+ years. They can expect to pay less than renting. Ultimately the decision depends on the individual, these are just some of the financial aspects one should consider.

By: Andrew@LivingRichCheaply

Andrew@LivingRichCheaply — Wed, 28 Jun 2017 13:42:51 +0000

It depends on your circumstances. My wife and I rented for 5 years when we were younger and didn’t know where we would end up. It gives you flexibility. When we had a kid, we bought a place. It also depends on locations. Some places it doesn’t make sense to buy or maybe it’s too expensive…like NYC and SF.

By: Jason Butler

Jason Butler — Wed, 28 Jun 2017 12:52:05 +0000

I’m a renter and I enjoy it. I eventually want to own, but right now renting equals less stress.

By: Giulia Lombardo

Giulia Lombardo — Sat, 24 Jun 2017 14:24:50 +0000

Right answer is it depends from you your partner and your workk. If you are going to stay in that place only few year rent is best deal… If you are going to stay in that place forever you can rent… Now there is also rent to buy option… But real right answer is depends

By: Adriana @MoneyJourney

Adriana @MoneyJourney — Sat, 24 Jun 2017 06:43:59 +0000

We’ve been paying rent for the past decade we’ve been living abroad.
Home ownership is actually something we look forward to, but for the time being we’re not exactly sure where we want to settle down.
On the plus side, our rent and total housing costs right now are extremely cheap, compared to properties in the same area. Our landlady is a very nice person as well, we’ve never had any problems with the apartment and we’ve also been paying the same rent for the past 5 years.

By: Rachel Slifka

Rachel Slifka — Fri, 23 Jun 2017 13:11:17 +0000

Great points here. We are renters and will be for at least the next 5 years because we aren’t ready to settle down in one city yet. People often ask why we aren’t buying yet and to be honest, we would lose a ton of money if we bought a house, only to stay in it for 3 years or so. The flexibility of renting is a huge plus for us and our careers because we can always consider opportunities in new cities.