The Buy vs Rent Decision, Honestly
The math, the lifestyle, and the four traps no one warns you about.
You're considering buying a primary residence in the next 12–24 months.
A 5-year total-cost comparison for your specific situation and a clear yes/no/wait decision.
Owning is not automatically better than renting. It depends on price-to-rent ratio, how long you'll stay, your alternative investments, and your tolerance for being your own landlord.
- 01
Compute the price-to-rent ratio
Take the home's price ÷ the annual rent for an equivalent unit. Under 15 = generally buy. 15–20 = it depends. Over 20 = renting is usually cheaper.
→ Run the rent vs buy calculator - 02
Honestly estimate how long you'll stay
Closing costs plus selling costs are ~8–10% of the home's price. If you sell in under 5 years, you'll likely lose money vs renting.
PitfallUnderestimating life changes. Job moves, breakups, and growing families all force sales before the 5-year break-even. - 03
Budget the true monthly cost
Mortgage payment is only part of it. Add property tax, insurance, HOA, and 1% of home value per year for maintenance.
- ▸Principal + interest (use the mortgage calculator)
- ▸Property tax — varies wildly by state
- ▸Homeowners insurance ($1,200–$3,000/yr typical)
- ▸1% of home value/year for maintenance and repairs
- 04
Compare to the invested down payment
If you'd otherwise invest the down payment in a 3-fund portfolio at ~7%/year, that's the real opportunity cost of buying. Run both 5-year scenarios.
- 05
Stress test the worst case
Can you cover the payment if rates reset, if you lose your job for 6 months, or if the AC and roof both go in one year? If any of those bankrupts you, the house is too expensive.