The American Dream says you "must" buy a house. They say renting is just "throwing money away." But is that true?
Often, renting is actually the smarter financial move—especially if you invest the money you save. Between property taxes, maintenance, and mortgage interest, owning a home is more expensive than the sticker price suggests.
Use the Rent vs. Buy Calculator below to run the numbers. It compares the total net worth of buying a home versus renting and investing the difference.
Over years, the winner saves you approximately in net wealth.
Equity:
Portfolio:
The "5% Rule" of Real Estate
Ben Felix, a famous portfolio manager, suggests the 5% Rule. Buying is only a good deal if your unrecoverable costs (Property Tax + Maintenance + Cost of Capital) are lower than your annual rent.
Opportunity Cost
The biggest factor most people miss is the Down Payment. If you put $80,000 into a house, that money is "trapped." If you rented instead, you could invest that $80,000 in the stock market. Over 30 years, that investment often grows faster than the value of the house.
Check your investment growth potential with our Millionaire Calculator.