Buying a Home vs Renting (Financially Speaking, Which is Better?)

“Renting is dead money”. That’s the often-repeated refrain of real estate agents and people who have a mortgage. But is renting really that bad financially? In this video, I’ll run through a simple scenario comparing renting vs buying by using two fictional characters, Mr Black (who wants to buy a house), and Mr Brown who wants to rent an identical house. Who comes out on top? Who has more net worth after 30 years? To be fair, my little example doesn’t necessarily mean that buying a house is bad. Having a mortgage can have a number of benefits. First of all, as many people often say, a mortgage forces you to save. Secondly, owning a home has many intangible benefits like the security of not being kicked out by a landlord, and the flexibility to renovate your home. But renting also offers some benefits, like flexibility in where you live. In the end, it’s ultimately up to you what you do regarding buying a house or renting. If you want to buy, buy! But don’t go around telling your renting friends that renting is dead money, because you’re just repeating a myth spread by the property industry. If you want the stability of a home, get a mortgage! But if you want to have more flexibility, and you’re good at saving, maybe renting is the way to go.

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