Buy or Rent?

Buying a house is a financial goal for many Americans, but it is not always the best move. This video will help you determine whether buying a house or renting and investing is a better financial strategy for you.

​Don’t have time to watch the full video? Read our quick video recap:

  • A renting and investing strategy assumes that if the cost renting is cheaper than buying, you would take the extra money saved from renting and invest it.
  • There are a few ways to make money by buying a house:
    • Use value - the money saved not having to pay rent
    • Appreciation - selling the house for more money than you bought it for
  • Owning a home also comes with costs:
    • Property taxes
    • Maintenance, which can average 2% of the purchase price per year
    • Higher insurance costs
    • Foregone investment returns you could have realized by investing your down payment instead of using it to buy a home
  • There are some tax savings for owning a home, but 75% of homeowners don’t save any money on their taxes.
  • Things to consider before buying:
    • If you are planning on buying, make sure you want to stay for at least 5 years
    • Focus on the rent-to-price ratio = (Monthly rent * 12)/Purchase Price of Home < 5%
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