Renting vs. Buying a Home: Which Is More Affordable?

By Joe Kipping

Top Realtor Joseph Kipping’s more than 18 years of professional experience in the real estate, banking, and mortgage industries makes him uniquely knowledgeable in all facets of buying and selling properties. His experience in the mortgage industry working with Lendingtree.com clients served as the foundation for his true passion – serving his clients and community as a full-time Realtor. This dedication to his Tampa Bay clients has enabled Joe to sell more than 1,200+ homes in the Tampa Bay area since 2008. Referrals from past clients and repeat business have driven much of Joe’s success because his clients know that they will never see high-pressure sales tactics, marketing gimmicks or any unprofessional practices.

A lot of people misunderstand the affordability differences between buying and renting a home. Today we’ll be discussing the key costs you should be aware of when comparing buying and renting.

First off, renters often pay a higher percentage of their income toward rental payments than homeowners pay toward their mortgage. According to one study, renters end up paying around 10% more.

Buying a home is also like having a forced savings account. You have to pay your mortgage every month, which drops your principal balance and helps you build equity. If you rent, however, you’re only building wealth for your landlord. 

Mortgage payments also stay relatively the same throughout your term—with a fixed-rate mortgage, the only things that can change are insurance and property taxes. If you’re renting, on the other hand, your payments are subject to rising home costs; when home prices increase, rent costs typically follow.

I used to think homeownership was a reward for financial success, but I’ve since realized that it’s the other way around. Instead, homeownership is a critical tool for facilitating financial success. Your home is likely going to be the biggest financial asset you have, and you can use it to build wealth over time through appreciation. 

If you’d like to talk more about the benefits of buying a home, or if you have any questions about real estate, feel free to reach out to me. I look forward to hearing from you soon.