Should I Rent or Buy a Home?

To rent or to buy…..what a question!

From a previous article, I talked about the 5 things to consider before deciding to either rent or buy. It used to be that the average person strived towards home ownership.

However, in the last 10 years, millennials have decided that renting is right for them.

Why Do Millennials Rent?

There are lots of reasons to explain the propensity for renting.

First off, millennials prefer living in high-cost cities where the housing market has increased significantly more than in other parts of the country. This demographic shift in living preferences is mostly observed among highly educated millennials. They don’t want to be tied to an area for long and renting provides this flexibility.

Makes sense. As I wrote in a previous article, corporations have been moving away from pensions to 401K’s for the last 30 years. A side effect of this change is that people do not feel tied to a company for their entire career. In the past, it was very common for a person to spend their entire career with a company, collect their pension in retirement, and live happily ever after.

All that changed with the implementation of 401K’s and the move to employees managing their retirement funds. People became more apt to move companies and even cities to get ahead in their careers. Every advancement meant more money that could go in their 401K’s and speed up their journey towards retirement.

Moving companies also means sometimes moving to different cities or even across the country. If you own a home, moving frequently becomes difficult. Renting is more conducive to this kind of lifestyle. I have a friend who is an executive at an automotive company. She has never owned a home in her life because she moves around the world every 2-3 years. Owning does not make sense for her lifestyle even though she can afford a home.

Also, student loan debt is at an all-time high. Total student loan debt is around $1.5 trillion and climbing. It is not uncommon to have $50,000, $70,000, or even $100,000 in student loan debt.

When I left college, I had a large amount of debt. I visualized the debt as a car payment on an expensive sports car. Today, it is much, much larger. Essentially, student loan debt for the average person today is almost a mortgage payment!

On top of that, housing prices is certain parts of the country (i.e. New York, San Francisco, etc.) is extremely expensive. For example, the average home price in the metro San Francisco area is over $1 million!

To have a 20% down payment, a person would have to save $200,000! This is a HUGE amount to save up which is why it makes sense for people to rent vs buying a home.

In fact, it is not uncommon for a person in this part of the country to actually buy rental property in more affordable parts of the country, collect the surplus rent money, and use it to pay the rent in the area they live in. Sounds a bit backwards, but if done right, can actually be very lucrative.

How to Decide If Renting or Buying Is Right For Me?

Let’s look at the pro’s and con’s of each to see what’s right for you.


Even if you feel financially ready to buy a home, you need to be sure your heart is in it.

Buying Pro’s

You’re Buying An Asset

When paying for rent, money is spent and never seen again. When buying a home, you’re really buying an asset that appreciates over time. Every payment brings you closer to total ownership. On top of that, the home will very likely increase over time. What is bought today for $250,000 is likely to  sell for a lot more down the road.

Buying A home

For example, I looked up the estimated price in Zillow of the house that I live in and bought 20 years ago. My property valued has easily doubled in value.

I also keep an eye on a house in my neighborhood that I had an opportunity to buy back in 2009. For various reasons, I didn’t. While it was the right decision for me at the time, I REALLY wish I would have bought it. Current estimates have it listed at almost 4 times the asking price in 2009! Damn!

Tax Advantages

Many of the costs of home ownership, such as property taxes, are tax deductible. In fact, for most people, home ownership is the biggest tax haven they own. Also, the mortgage interest counts as a deduction when tax returns are filed.


Home ownership comes with many freedoms. For starters, home ownership comes with the freedom to style and renovate your house any way you want. If you want to paint your shutters pink with purple polka dots, then by God you can, and no one can stop you! Lol 😊

Another freedom of home ownership is privacy. In an apartment the walls are thin, and you can hear EVERYTHING your neighbors are doing. In a home, you’re farther away, sometime miles away, from the nearest neighbor. Peace, silence, and solitude. 😊

Lastly, the best freedom is that it’s yours! 😊 If you want to build a bar, you can. If you want to install a heated pool, you can. In most cases, the only thing that can stop you from doing what you want is your budget and the amount of space you have to play with!

Buying Cons

Difficult to Relocate

Want to go backpack Europe for 6 months? It’s easy if you rent. It’s not so easy if you own a home. Same goes for work-related relocations. While not impossible to undertake, having to sell your home to move to a new office adds stress and headaches to an already stressful situation.


Houses aren’t cheap. Not only do you have to front a lot of money at closing, your home could need some TLC before moving in (painting, landscaping, maintenance, etc.).  Add to that the need to buy tools, shrubs, paint, drywall, etc., it’s not uncommon to spend several thousand dollars in the 1st few years of ownership.

Also keep in mind that home ownership could include HOA fees, utility bills, and property taxes. It’s no wonder the cost of home ownership tends to be higher than renting.

Upkeep and Maintenance Required

Roof worn out and need a new one? Call a carpenter.

Got a leaky pipe? Call the plumber.

Need a ceiling fan installed? Call an electrician.

Unless you are handy, expect to pay a lot to have someone come out to make house repairs.

Need a new roof? Even on a small, ranch-style house expect to pay somewhere between $7,000 – $10,000.  

For example, I had a dishwasher issue I spent a lot of time on to troubleshoot. When I went through all the basic causes of the problem and it still did not work, I had to call a repairman. A repairman in my area costs $80 just to walk through the door plus labor and parts. An hour later, the problem was fixed but it cost me $200 to get there.

Home ownership is fun, but it isn’t cheap.


Just as there are upsides and downsides to buying, renting also has it benefits and drawbacks.

Renting Pro’s

Easy to Move and Travel

Want to live in Florida for the winter? Thinking about taking a year off to travel the world? Renting can accommodate this. Plus, getting out of a lease is WAY easier than selling a home.

Renting a Home

No Maintenance

If the stove stops working, you can call the building manager to fix it. No calling a repairman, wasting half a day waiting for them, and paying exorbitant prices. One of the biggest perks of renting is never having to worry about surprise repair costs. On top of that, buying renter’s insurance covers costs of damage due to water, fire, or theft so you’ll have peace of mind in case something happens.

Stable Costs

The rent amount is pay 1 price. No unforeseen expenses need to be accounted for since it is included in the rent price. No maintenance costs and no taxes to consider. Because of this, renting is typically cheaper than buying.

Renting Con’s

No Financial Incentives

The downside of renting is not buying an asset and its associated tax breaks. No tax deductions, no equity, and no hedge against inflation. You never see the money paid ever again.

No Freedom To Renovate

Another downside is the lack of freedom to update and renovate the space rented. Even if allowed to paint a room, it usually requires the landlord’s approval to do so. If they say no, it can’t be done. Also, the ability to customize a living space is usually severely limited.

Potentially Unstable Living Situation

While renting offers flexibility for travel, a downside is uncertainty in living situation. If the landlord decides not to renew your lease to turn the apartments into condos, you’re out on the street looking for a place to live.

What Should I Do?

There isn’t always a clear answer to the question of whether to rent or buy. Your solution depends on several factors.  Where you live, your lifestyle, your financial situation, and your career ambitions all impact the choices available and may change over time.

If moving every few years or in a price sensitive market, renting is probably the cheaper option.

However, if staying in an area long-term, it’s likely buying makes more sense. Owning a home is more the slow ‘n’ steady approach.

Whatever is decided, make sure your decision is an informed one.

Live the Life You Love, Want, and Deserve! 😊