💸Let’s Talk About Renting vs Buying

📈 It is a decades-old debate: should you rent or should you buy? I hear this question all the time, and the answer isn’t always clear cut. But one thing is certain: it’s about your financial goals, lifestyle, and what makes sense.

While the debate often focuses on immediate monthly costs, or perhaps yearly savings, we decided to dig further into the wealth building aspect of owning real estate. We preach this at Parkway Real Estate, but we wanted an illustration that woulds help our clients visualize the different. This graph provides a clear look at the true long-term financial difference and why we often push for folks to buy as soon as they can (spoiler: it’s not because we work on commission).

The cumulative wealth (aka Net Worth) of a Massachusetts homeowner (blue line) compared to a financially disciplined renter (orange line) who consistently invests the money they save by not owning is vastly different. It’s clear, the easiest path to wealth building is through real estate, with forced savings via the equity you are building with each monthly payment.

So Let’s Talk About… Renting v Buying:

Despite this research, we still believe that renting vs. buying comes down to timing, location, and, of course, your unique situation. In many markets, buying can be a smarter long-term move, building wealth and equity over time. In cases where things are not so black and white, renting might offer you a location you prefer, the flexibility of less responsibility, and the financial breathing room to save more or invest elsewhere but keep in mind the graph showing that these investments will likely never compete with someone who owns.

There is no one-size-fits-all answer. It’s not about what your co-workers, friends, and family are doing or even what the market is doing. It is really about your situation and what you need and want in the years to come. As your real estate consultant, I will sit down with you to figure all this out! We discuss your current and future plans, and analyze several considerations and how they pertain to you. 

For example, can you afford a down payment and the ongoing costs of homeownership, like maintenance and desired improvements? Keep in mind, a fixed rate mortgage payment won’t change but taxes, and insurance could so it’s always a good idea to keep funds aside for this. Or, do you plan on staying in one place for several years? If you’re uncertain about your job or lifestyle, renting smart (read: with a plan) could be the right move. Just be sure you are prepared for yearly increases, or notice of non-renewal. 

In almost all cases:

💸 Buying is better for wealth building

🏠 Buying protects you from the risks associated with renting 

So if buying seems like the next move for you, it’s time to start building your real estate team. As you continue to rent, have a plan in place for saving now for when the time to purchase comes along. So, in situations such as rent increases or non-renewal of lease, you will be ready to make the jump to a purchase.

In any case, have a conversation with a trusted real estate expert. We’ll dive into your finances, future plans, and help you figure out what’s best for you. Let’s explore all your options together so that you can decide with confidence, not guesswork.

📲Reach out anytime: 857-400-9078

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Danielle M. O’Brien
MBA, GRI, CRS, SFR, ABR, REALTOR®
Broker Owner | Parkway Real Estate
2064 Centre Street, West Roxbury, MA 02132
(Direct) 857-400-9078 (Main Office) 857-400-9098
(Email) danielle.obrien@parkway.realestate