Are you torn between renting vs buying a home? There's a dangerous idea in society today that owning a home means you're financially stable. Many people in their 30s and 40s have even stated that they often feel reluctant to tell people they rent for fear of being judged. For generations, we've been taught that home ownership is the ultimate goal.

However, that's only one of the many considerations in the debate over renting vs buying a home. Go to school, get a well-paying job, save up money, and then get a mortgage to buy a home and raise your family in it. That's the ultimate proof that you've made it in this world. In this post, we'll dive through questions to consider when trying to decide between renting or buying a home.

Renting vs buying a home: what's the difference?

More and more people are learning that owning a home isn't better than renting. And at the same time, renting isn't necessarily better than owning either. It all depends on the lifestyle and the type of financial commitment you'd prefer.


Renting offers both flexibility and consistency in housing costs. You can move at any time. You can move to a different city, or even a different country without going through the long, gruelling process of putting your home on the market.


Owning, on the other hand, also offers stability as well as a sense of pride and belonging to a community of other homeowners. Your house is also a stable asset that increases in value over time and provides the potential to live without a mortgage payment after you retire.

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How long will you live in the house?

If you're looking to settle down and raise a family, and want a house you can call your own to do that, then obviously owning is the better option. However, if you don't plan to live in a single home for very long, then it doesn't make sense to buy a house. The costs of homeownership are spread out over time. Buying a home is generally more recommended for people who plan to live at least 7 years in the property in order to at least recuperate the closing costs from the purchase.

How high are rent prices?

The market can also determine whether buying a home makes more economical sense than renting. If rent in your area is skyrocketing, it might be a better move to buy a home rather than overpay on rent.

Can you afford a house? Will it make you broke?

One of the most common situations all over the world is that people buy a larger house than they can afford due to the “excellent mortgage offer” from the bank and they end up with monthly payments they struggle to make, with no money left over for savings. They've used all their savings on the downpayment, and are now left with a super nice house, and financially struggling. This is called being “house poor.”

Do you have high-interest debt?

It doesn't make sense to buy a house when you have large debts owing that charge a 20% interest rate. If you have high-interest debt, focus on paying that off first before considering purchasing a house, which will add to your monthly expenses and make it even more difficult to pay off that debt.

Are you buying as an investment?

Since I was a child, I've been told that buying a house is one of the best investments you can make. But that's false. Buying a house primarily as an investment vehicle can be dangerous unless you know what you're doing.

Historically, real estate barely increases higher than inflation rates. Unless, you're a seasoned real estate investor who knows how to spot undervalued property, up-and-coming areas, or buying and flipping houses, it's likely not going to be as good an investment as you thought.

Do you already invest what you save?

From a yearly cost perspective, renting is cheaper than owning. But one thing you have to ask yourself is if you're already in the habit of investing what you save. If you already invest, you can calculate the earnings of what you invest vs what you would make from what you would potentially earn from your home as an investment vehicle.

If you're not investing what you save, and don't have the financial discipline to do so, then buying could produce a better return for you naturally over the long run. It's basically forced savings and forced investment.

Do you rent within your means?

Many people spend as much rent as they can. The money they would save from buying a house they instead spend on larger, fancier apartments. The renting vs buying a home debate only comes close if you're smart with how much you spend on rent and what you do with the savings.

Are you able to pay for unexpected costs?

One of the biggest advantages of renting is that you don't need to worry about repairs or maintenance fees. If the wind blows off your roof, it's not your responsibility to shell out tens of thousands of dollars for an emergency repair. If the pipes burst, the thousands of dollars to fix them won't come out of your pocket.

Are you prepared for additional monthly payments?

With homeownership comes more costs associated with owning your home. You'll have to pay for things you've never had to think about when you were renting such as property taxes, trash pickup, homeowner insurance, yard maintenance, snow removal, pest control, and water and sewage services. Rooves don't last forever and need to be replaced, so you need to plan for that as well.

Where else can you spend that money?

When you buy a house, you're putting around 20% down. Depending on where you're buying, that can add up to over $100,000. Where else can you spend that money? Are you trying to build a business? Could that money be used for an investment with a large return?

For younger people, putting that much money into a house locks them down from ever taking a large risk on that business they've been dreaming of seizing career opportunities that could take them out of province or overseas.

On the flip side, if you don't buy because of opportunity cost, are you actually going to invest that money? Are you really going to start that business or will it just end up sitting in a low-interest savings account until you spend it all?


Renting vs buying a home shouldn't be a debate. One isn't better than the other. It all depends on the lifestyle and financial choices you want and are willing to make.

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