Financial Vitals - Throw Out The Rent Vs Buy Rules Of Thumb
Financial Residency · Daniel Wrenne
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Show Notes
This episode is sponsored by Eckard Enterprises. To start empowering your financial future, visit www.EckardEnterprises.com
Are you buying or renting? What are the perks of being a homeowner? Think through and focus on both financial and non-financial reasons.
In this episode of the Finance For Physicians Podcast, Daniel Wrenne talks about the rules of thumb when deciding whether to buy or rent a home.
Topics Discussed:
• Why buy? Live in it 3-5 years to break even and recoup upfront transaction costs
• Why rent? The best option if you plan to live there only a couple of months or years
• Numbers: Mortgage closing, realtor commissions, improvement costs, and ROI
• Taxes: Deduct ownership expenses; can't deduct property/mortgage insurance
• Insurance: Renter's insurance is less expensive than homeowner's insurance
• Homeowners' Association (HOA) Fees: Added costs for homeownership
• Uncertainty and Overestimation: Bias of living in a home longer than expected
• Lifestyle Creep: Living beyond your means and not analyzing home prices
• Headache Factor: Rent-not your problem; buy-home ownership increases issues
• The joy of Ownership: Cultural and cool factors to owning your own home
• Renting: Gets old not being able to do what you want with your place
• Rent vs. Buy Examples:
◦ 2362 Heather Way, Lexington, KY
◦ 8704 Grand Ferry Dr., Austin, TX
Links: Real Estate Home Price Indexes Price To Rent Ratio Austin Rental Example Lexington Rental Example Research on Renting vs Buying Finance For Physicians