If you’re looking at the price for a rental these day and looking at the payment for a comparable home, it probably seems like it’s a little bit cheaper to rent right now than to buy, but in the long-term, it is way more expensive to rent than it is to buy.

Scott Himelstein, with the Scott Himelstein Group, and today I’m going to talk to you today about renting versus buying. A lot of people think that buying a home is risky, but what they don’t think about is the alternative, which is renting. For most of us, the alternative to buying is that we’re going to be paying rent. So you’re going to be spending that money either way. But here’s the difference. Over time, rent tends to increase and your mortgage payment stays the same over time. So the longer you’re in that home, the more affordable it is to actually own it, and the more expensive it would be to rent it. That’s to say nothing of the fact that, while you’re renting, You’re getting exactly $0 in equity, versus when you own, over time, you’re gaining equity, not just from paying down the balance, but also from appreciation.

“If you are looking long-term, it would make more sense to buy than to rent.”

So you’re actually taking advantage of two things to build wealth versus just throwing your money away in rent. Let’s talk about the elephant in the room, which is 2008/2009. I realize that the market did crash to the tune of about 33%. However, the market had rebounded by 2013 so that the average price of homes in America were already back to where they were before it had crashed. So that means that if you were in a home that you could afford to stay in throughout that time, you could ride out that storm. So that’s why my advice is if you can afford to buy a home with a payment you’re comfortable with, that you’re going to be able to stick with for a long period of time, it’s going to be way cheaper to own that home than it’s going to be to rent over that same course of time.