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In this article

1. Background, tips, and a rent-vs-buy calculator to help you decide
2. What’s the upside to buying vs renting a house 
3. Buying
4. Renting
5. Time considerations for buying vs renting a house
6. Is it a move-in-ready home, or do you need it inspected?
7. Who is in charge of general maintenance?
8. Length of stay impacts affordability.
9. Cost Considerations 
10. Monthly mortgage payments are less than rent?
11. Maintenance costs can add up. 
12. Be prepared for subfloor surprises.
13. Opportunities to profit when you’re buying vs renting
14. Buying builds equity for you. Renting builds equity for your landlord. 
15. National Renting vs. Buying Trends
16. Need help determining if Buying Is Right for You?
17. Be prepared with an Upfront Approval Guarantee.
18. See which option is best for you.

Background, tips, and a rent-vs-buy calculator to help you decide

Buying a house is a foundational element of the American Dream, or at least the dream as most people—millennials and older—understand it. But it’s also the most expensive purchase nearly anyone who has bought a house will make. Rent is, too. However, we typically think about it in monthly terms compared to the home purchase price.

Before we go any further, try to separate the purchase price from the monthly rent. They’re certainly related, but comparing $450,000 to $1,750 isn’t helpful for most brains. Plus, many other data points should factor into the decision (like insurance, interest, loan length, deposits, fees, opportunity costs, and market conditions).

Use our by vs rent calculator to see which option best serves your needs.

What’s the upside to buying vs renting a house 

There is no blanket answer as to whether renting vs buying is better, but this is how it typically stacks up:

Buying

• Upsides
  • More control and autonomy
  • More opportunity to profit off a sale
  • Monthly payments convert to equity
• Downsides
  • More unplanned expenses
  • Too involved for the short-term

Renting

• Upsides
  • Less responsibility
  • Fewer surprises
  • Great in short term
• Downsides
  • No control or autonomy
  • Monthly payments are 100% cost
  • No opportunity for profit

Let’s dig a little deeper into how time, costs, and market opportunities can influence which decision you should make.

Time considerations for buying vs renting a house

In today’s market, most people understand the expense of owning a home. But what many first-time homeowners overlook is the amount of time that goes into it. 

A friend and his wife recently looked at a charming, old home. They’re both successful professionals in a small town, so the costs associated with buying, renovating, and repairing a home don’t worry them. 

What they didn’t consider was this: Even in the rare instances where you have the income to easily pay a contractor to repair and renovate a home, those projects occupy the homeowner’s time, attention, and personal comfort (if they’re happening while you live in the house). 

Are the sacrifices worth it? Yes, for many homeowners, especially those who manage to sell their homes for a profit. But it’s a commitment you should understand before entering into a 30-year mortgage. 

Is it a move-in-ready home, or do you need it inspected?

When you rent a house, condo, or apartment, the living spaces are typically move-in-ready. This is especially true when renting from multi-property management groups with staff dedicated to turning over new rental properties. Some even come pre-furnished, though that often costs extra. 

For anyone buying a home, there is a home inspection step as a part of the purchase process (though it can be waived in highly competitive markets). A home inspector, hired by the potential purchaser, will check every nook, cranny, attic, and crawl space of a home to make sure the building is safe, up-to-code, and doesn’t have any less-visible issues that could endanger the new owner or be expensive to fix. 

In some cases, an inspection will uncover structural issues, fire hazards, faulty wiring, wood rot in the subfloor, a hole in the roof, or any number of nightmare issues. 

But don’t fear. For the most part, home inspections uncover minor wiring issues, spots with too much moisture or water damage to be monitored, and loose fixtures. The potential buyer will usually ask for a slight reduction in price or for the owner to fix the issues before the sale. 

Who is in charge of general maintenance?

A good landlord with a good maintenance team handles everything from spraying for bugs and mowing the lawn to changing light bulbs and air filters. Some even handle your internet, cable, and utility needs. 

For homeowners, you have to do the maintenance on everything in your home (or pay for someone to). 

That beeping smoke detector? That’s you.

The lawn? You again.

The air condition sputtering out at 2:04 am in June? That’s on you. 

Many people like mowing their yards, and some even enjoy the daily maintenance tasks of owning a home. So, they aren’t bad things, but they will take up most of a Saturday.

Length of stay impacts affordability.

The amount of time you plan to stay in a location can quickly help you decide whether buying a house or renting a home is best for you and your family. 

Renting a home is an excellent option for anyone unsure of how long they’ll be in a job, city, or neighborhood. While average rent is usually a little higher than monthly mortgage payments, buying, maintaining, and selling a home have ancillary costs that can quickly make renting a better option, especially in the short term. 

Buying a home is typically best when you plan to be in the same place for five or more years. Otherwise, the amount of money it costs to handle the buying and selling of the property, plus any updates and maintenance you make, may not be recouped in the short term.

The length of stay also becomes a financial consideration, which brings us to the next step: comparing the costs of buying vs renting a house.

Cost Considerations 

Your most obvious cost consideration is a monthly expense. Will your mortgage payment or rent be higher? However, most first-time homeowners quickly discover that the monthly cost of owning a home is much higher than a monthly loan payment. 

Monthly mortgage payments are less than rent?

The numbers fluctuate over time depending on market conditions, insurance costs, and interest rates. 

Atlanta’s average monthly mortgage payment was $2,389 in 2023 (assuming a 13% down payment, 6.8% mortgage rate, property taxes, and .75% insurance costs), compared with just under $2,000 for the average rent. While $400 may not seem like a massive difference, a 20% housing cost difference over the course of a year is pretty big. 

The current trend is true in most places. In New York City, the average monthly payment for homeowners is $4,152, compared with $3,257 for renters. On the other side of the spectrum, There is a 33% gap between renting ($1,140 per month) and buying ($1,517 per month).

However, monthly mortgage payments have historically been lower than monthly rent costs. The current spike in homeownership costs is due to a combination of the COVID-19 lockdown purchasing craze and the rate hike enacted by the Fed to avoid a depression. Many lenders expect rates to go down, increasing the number of available homes on the market. 

Compare those projections with the fact that rent prices have steadily and significantly increased since before the pandemic.

One of the major benefits of owning a home is the option of selling when housing costs rise quickly like they have in recent years, but we’ll talk about that more when we discuss equity.

Maintenance costs can add up. 

From the biggest, unexpected expense to the monthly changing of air filters, home ownership comes with a great deal of required maintenance.

• Appliance servicing
• Lightbulbs and air filters
• Lawn service (or tools)
• HVAC service
• Pest control
• Cleaning and housekeeping
• Homeowner association fees
• Roof repair 

That’s not to say rentals are maintenance-free. But for renters, maintenance costs are typically built into the monthly rent. In some cases, landlords may require an annual maintenance assessment.  

Be prepared for subfloor surprises.

The most expensive aspect of owning a home is often something wrong within the walls, in the attic, or under the floors that no one knows about and no one will expect. This is even true in rentals, but if you own the property, it’s up to you to fund or fix it. And even if you’re handy, a couple of trips to Home Depot can put a dent in the wallet.

Opportunities to profit when you’re buying vs renting

Often, homeowners can make small updates, modernizations, or even complete renovations, which will increase the quality of life while they live there and then increase the property value when it comes time to move.

Even homeowners who don’t purchase a fixer-upper or make significant renovations to their home can stand to profit. Housing prices have historically risen at least at the level of inflation, meaning homeowners can sell their homes and receive a sizable portion of their investment to put toward their next home or housing expense.

Buying builds equity for you. Renting builds equity for your landlord. 

Owning is like investing in your own company’s stock. Every time you pay your mortgage, you’re increasing the amount of the property you actually own, the amount you stand to gain profit from. In a reasonably steady market, you can expect to pull out about as much principal as you paid into your home, and when the market is good, you stand to profit.

Renting is like insurance. You have a place to live, you know someone is going to take care of anything that goes wrong, and someone else is required to provide you with a roof for a predetermined, contracted period of time. Every time you pay rent, you are reaffirming that contract for another 30 days.

National Renting vs. Buying Trends

At the end of 2020, the number of homeowners in the United States increased by about 2.1 million over the previous year.

But that spike in homeownership meant fewer houses were left on the market, and those remaining homes were now more expensive. 

But, for people thinking about purchasing a home, 2024 may be the perfect time to prepare. 

Mortgage rates are expected to dip at the end of 2024 and the beginning of 2025. As borrowing becomes more affordable, people will start buying again, likely leading to more sellers entering the market. 

At the same time, new apartment construction is at an all-time high, helping to reduce some of the pent-up demand for homes. Atlanta is one city leading the way with efforts to convert unused urban offices into living spaces.

And cities with profitable “house-flipping” markets are seeing reduced profitability for non-owner-occupied renovation projects, meaning those houses will now be either more available or more affordable. 

Finally, cities understand they have a housing shortage and are focusing efforts on supporting homebuilders. New housing completion has remained on a slow but steady rise for the past few years.

So, while monthly mortgage expenses are generally higher than rent right now, they won’t stay that way forever, and there is still an opportunity to buy a home and turn a profit in today’s market if you plan to spend more than three to five years in it. 

Need help determining if Buying Is Right for You?

Consider talking to a local lending expert to discuss if purchasing a home would be the best financial move for you or if you should rent until the right time. 

A local mortgage lender will have a nuanced understanding of the market conditions and housing availability. And since local lenders base their business on reputation, they will give you an honest assessment of your financial options. 

A good lender also maintains a network of professional partners they enjoy working with, like real estate agents and attorneys, so they can help you assemble the best team to meet your needs. 

Be prepared with an Upfront Approval Guarantee.

Most mortgage lenders can offer potential homebuyers pre-approval based on their financial background. This can help you determine affordability and set a budget. While this is helpful, it doesn’t guarantee loan funding. Once you make an offer on the house, you’ll still have to go through the financing process.

Some lenders, like the Moreira Team, have access to an Upfront Approval Guarantee, which is basically a pre-funded loan. So you can go into a loan offer knowing your financing is already worked out, and the contract offer will not fall through. 

The Upfront Approval Guarantee also lasts for up to 120 days, meaning you can finalize your paperwork now and be ready to close on a house within ten days once the market is perfect for you. 

See which option is best for you.

Reach out to a member of the Moreira Team to find out what housing options are best for your and your family’s specific needs.