Financial Vitals - Throw Out The Rent Vs Buy Rules Of Thumb

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