Most people believe that they should buy a home so that they invest in something that’s a guaranteed return.
Or that it’s always better than renting (in some cases, that’s true, but not always).
For everyone who has ever said to me:
- Don’t you want to settle down and have a place of your own?
- Do you just want to keep throwing your money away on rent?*
- Don’t you want to invest in something that’s a guaranteed return?
- I don’t understand why you would want to RENT and move all the time!
*Renting means I’m paying for a service.
It isn’t being thrown away because I am buying the service of shelter and/or utilities and other amenities.
…I present this calculator.
You can now see whether it’s cheaper to buy a home and pay the mortgage plus maintenance (3% of the gross value of your home each year), or to rent, and decide for that financial aspect of home buying or renting.
Generally speaking, living in very expensive cities like New York City or Los Angeles usually indicates it’s cheaper to rent than to buy (particularly if you are looking in the million-dollar range for everything, even a shoebox!).
If you live in less populated areas, then buying a home makes more sense, as it’s cheaper in the long run.
Ultimately, it’s your choice to buy or to rent, but don’t be swayed by generally accepted beliefs without doing the math for yourself.
For us, we rent because we want to for reasons other than financial ones.
Read: Renting versus Owning
We’re more the type of people who don’t want to feel tied down to any one spot.
Buying a home is the ultimate anchor for us, when you consider the work, time and money that would go into having to resell that property if you need to move or of something changes.
I guess we just can’t let go of that.