Rent VS Own

September 3, 2020 by DRG

Let’s address the age-old question: should I rent or should I buy? While at DRG we believe that there can be a case made for both sides, we also feel it is important to educate our clients on the differences as well as the pros and cons to both sides.

Right now, as many of you may know, interests’ rates are extremely low. So as experts, we want to encourage as many people as possible to buy now. Not only will you be able to lock into a low rate over the lifetime of your loan, your purchasing power is significantly increased, even though homes have continued to appreciate.

Rent vs Own

However, we do have a few qualifiers we like to ask our potential buyers to make sure buying is the right option for them:

  1. Are you employed? And if you were to be fired tomorrow, do you have enough marketable skills to be hired again quickly?
  2. Do you plan to live in the area for 3-5 years?

If you can answer yes to both of those questions, you are in a good position to think about buying! But being in a good position to buy still doesn’t mean it is the right move for you. However, let’s take a look at equity. If you are looking to build wealth, buying a home is one of the best places to start. Taking a look at the chart below, you can see your total net worth in equity if you own a home for 10 years at a purchase price of $300,000.

Rent vs Own

At a glance, you can see that by renting you gain no equity over 10 years. However, as stated before, this still may not mean buying is right for you. So, let’s look at reasons people rent:

  • Cheaper Monthly Payment
  • No taxes or maintenance
  • No Down Payment
  • Easier to Move

While we may argue that often times people can afford a home for the same monthly price or less than rent, many people are still hesitant for the other reasons listed. For instance, if you are someone who likes to move around frequently or is not in the position to provide a down payment, renting is still a great option!

If you are still wondering which is the right option for you, we encourage you to reach out to JJ Ellingson with LeaderOne Financial to set up a time to walk through a Rent VS. Own Analysis. This in-depth analysis will take you through all of the numbers you need to know before taking your next step!

You can also sign up for one of our First Time Homebuyer Seminars to learn more and breakdown further myths about purchasing a home.

Wherever you are at in the process, let DRG be your resource! Reach out to one of our Urban Realtors or explore our Condo or Apartment Guide for more information and resources!

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