Renting vs Buying a Home: The Lie You’ve Been Told

Without a doubt, this year will be worse than the last. I lost a lot of money last year as a result of bad investment choices that I would not have made if I hadn't been so worried about my portfolio. I kept investing, but I couldn't determine whether to start paying for a house. In the end, I sold my positions, and the house needed more work than I had planned. I'm not sure how long I can keep going like this

My 91 year old grandma wants to go rent an apartment. She can't keep up with the house and do the stairs. Renting with home care is cheaper than assisted living. Its opened my eyes to that as an option later in life, too.

Bottom line: do what works for you. Owning a home isn’t the be all end all. But if buying is a goal you’ve had and you can afford it, then by all means do so!

The problem is in the confusion with the term "buy." You don't "own" a home if you have a mortgage, people. The bank 🏦 does. 😳

I bought my house about 10 years ago right out of college, the mortgage is way cheaper than most rentals in my area. Also it’s quadrupled in value since then. You have to be logical in what you can afford. Not every situation is the same and different cities aren’t as affordable but if I could do it over again I would always choose to own where I live homeownership.

People think I am poor because I am living in an apartment. I don't care what other people think about me. I save so much money because I am renting an apartment. I am responsible for my life, so I don't listen to those who are trying to persuade me to buy a house.

First thing they said when I joined a brokerage firm, “rule #1: your not a financial advisor, you’re a salesperson”

People are now saying you can get a house without a down payment now I see that as a red flag!

To me, buying a house is to make sure my rent doesn’t increase when I’m retired. I live California and when I bought my house in 2018 my rent for the 1 bedroom apartment was $1800, my mortgage, property tax, insurance, and HOA was $3200 on the 3 bedroom house. Just before I turned in my notice, I received a renewal notice and the new rent was $2500. I just looked the other day to see how much it cost now to rent the same apartment and it’s $4000 a month. On the other hand my now mortgage, property tax, insurance, and HOA is now $2600 a month after the refi in 2022. Plus when I decide to move I get to sell my house and get all of my money back vs just moving with nothing.

Honestly this cannot be overemphasized, helping people mitigate unforseen circumstances and mistakes .It's always good to have a financial plan,

So I get the math behind this. I do this personally too (I live in Taipei where rents are WAAAY cheaper than buying in the city). However, let's be real: 80%+ of people do not have the discipline to invest the difference they save on rent. Buying a house works because people are EMOTIONALLY motivated to pay their mortgage. As long as they follow your guidelines (20% down, no more than 1/3-ish of their take-home pay), over 20+ years, it's not a choice between buying vs renting and investing, it's a choice between buying vs doing absolutely nothing.

I never owned a home because i couldn't see myself having to deal with house things. So glad the landlord has to do all of that crap. I diligently invested sooo much money instead!

We need to make that a saying on the YouTube finance section “Rent is the maximum you’ll pay, a Mortgage is the minimum you’ll pay” as a former homeowner it’s the absolute truth. Just because your rent is as much as a mortgage doesn’t mean you can afford the house and all its associated costs. Just watch the movie The Money Pit with Tom Hanks and you’ll understand…

I own a duplex, live downstairs and collect rent from the unit above. Old house I renovated with my father. House probably gained over 100 000$ value over the last 4 years since I bought it. The rent covers all my mortgage and then some, all while charging below market rate (he's an old man who's been there 20 years, I intend to keep him as long as he's willing). I have two whole floors to myself, while paying less month to month than I would with a roommate. Got lucky, I'm well aware of that, but in any renting market, if landowners start losing money, that's gonna put pressure on price. You can't just assume nobody runs their numbers. Eventually, rent prices are going to catch up.

Thank you for sharing your knowledge and experience Ramit! My wife and I almost bought a house because we keep having friends & coworkers around us buying and it honestly gets to our head sometimes. After running the numbers we decided to stay renting. After seeing your Netflix series it made me feel better about our decision. We’ve been able to save/invest 3000 a month for the last couple years. Our savings and retirement is bigger than it’s ever been and it’s kind of addictive to watch it grow. It motivates me to work harder to be able to invest more! Thank you for all you do!

I can vouch. I’m in this spot now. I ran many numbers. The maintenance cost is wayyy more than I anticipated. I realized that I have not only got a mortgage but I am now a property manager. And I have to always defend against renovation requests from the wifey. When renting, that was never an idea! I would have just stayed in my rental in would be way richer.

I'm originally from California and I moved to Missouri several years ago. What I found out was that rentals cost about the same but buying was way cheaper in Missouri. So for me it made more sense to buy a house.

Every comment i always see on social media is about how a house is ALWAYS cheaper, and then they say how much they pay for a mortgage and the number they respond is always under $2000. Often it's under $1000. Like, sure, maybe in middle America, not near a city, if you bought 10 years ago. But no one looking to buy has a time machine. But I don't feel like they actually understand that a monthly mortgage on a 3+ bedroom, at least in the city I live in, if you buy right now, at the interest right now, is $4000+ (and for what we want, 8000). I honestly feel like that would blow their mind. Also, we bought a house at 460k, the max we could afford in 2020. This meant we couldn't buy anything after 1980. Our house passed the inspection with flying colors and after we were locked in we went to work on the bathroom, which looked like it was in bad state. That ended up with us having to remove wall after wall after wall, following a trail of water damage that had been going back decades and made the house structurally unsound. In the end, we spent about $250k on renovations for our 460k house. We haven't even broken even yet.

Owning the property I live in is part of my rich life. I do not think of it as an “investment”. My investment is my retirement account.

I ran the numbers, we'd save $186k over 8 years by renting. I'm glad you're putting this info out there because I have never really heard this side of the coin and frankly it makes a lot more sense. My husband and I are nowhere near deciding where we're going to live for 15+ years straight, and personally, I moved around a bunch as a kid and I turned out fine. Grew up in an apartment. I don't feel like I missed out on much by not having a white picket fence.