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Renting Vs Buying A Home

· home ownership,financial freedom,money counseling,financial wellness,money coach

When it comes to deciding between renting or buying a home, the most beneficial decision depends on entirely on your unique situation. Sometimes buying ends up better for your finances—other times, renting is the best decision.

Here are my tips as a financial wellness coach to help you determine whether renting or buying a home is more beneficial to you.

Future Plans

If you know you plan to live somewhere for a minimum of 5 years, it may be cheaper for you to buy. Still, you have some other math to do: compare costs for your area.

Location, Location, Location

Some areas it is more expensive to own a place than rent and vice versa, so you really need to do your research. It all depends on where you live. Take a look at a couple tables:


My husband and I live in San Jose, CA, and since it's currently the 4th most expensive place to rent in the United States, we decided that buying was a better decision for us, especially since we plan on living here for at least 10 years.

Consider Your Debt

In general, most lenders use what’s called the 28/36 rule, meaning your living expense should not exceed 28% of your pretax income, and all combined debt should not exceed 36% of your pretax income. If you already owe close to 36% of your income each month in debt (student loans, car loans, etc.), you should probably consider continuing to rent until you can lower that number. Take a look at my Achieving Financial Independence from Debt blog to read about ways you can easily lower your debt.

Keep HOA and Other Fees in Mind

You may look at a home mortgage and think it is less expensive than your current apartment’s monthly rent, but more goes into owning a home than just that monthly mortgage. Depending on your area, HOA can add at huge expense per month. Add to that any maintenance your home may need, including simple fixes like a clogged bathtub to expensive repairs like fixing a septic tank. Renovations are another potentially huge cost.

Regardless of if you want to buy or rent, you should save a minimum of 6 months-worth of expenses. And if you want to buy, don't only save, but I also recommend investing in index funds and stocks to help pay for your down payment. Take a look at my blog for more financial wellness tips for home ownership.


If you need more help determining if renting or buying a home is the best decision for you, contact Coremoney Coaching today for a free initial consultation.

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