Rent Versus Buy - The Real Cost of Renting!

Real Estate Broker/Owner with 0548772

Being in real estate I hear Realtors talking all the time that it's better to own than rent.  I know that the general population thinks we say that just 'cause we want to sell more houses.  So let's take a REAL LOOK at why it is better to own than rent.

Set the stage:  The average price (mean) of a home in San Antonio, Texas is $156,000Given 30 years at 12 monthly payments on an FHA loan at 3.85% (today's market rate for outstanding credit score) compared to a rental payment of $1250 (including rental insurance).


Using my handy dandy rent v. buy calculator I get the following results in a full comparison:

Estimated Savings with Ownership vs. Renting


Number Of Years To Compare:   10
Concerning Rent: (Scenario One)
Rent Amount Per Month:   $1,200.00
Monthly Renter's Insurance:   $50.00
Concerning Home Ownership:
Purchase Price:   $156,000
House's Appreciation Rate:   1%     (very conservative rate)
State & Federal Tax Rate:   .25%  (federal income tax rate varies)
Loan Amount:   $150,540.00
Interest Rate:   3.85%  (today's rates for prime credit scores)
Number Of Years:   30
Discount Points:   0%
Origination Fee:   1%
Other Loan Costs:   $1,000.00 
Annual Property Taxes:   $4,200.00
Annual Maintenance Costs:   $1,000.00  (varies by owner)
Annual Homeowners Insurance:   $100.00
Selling Costs:   6%   (varies by Realtor)
Total Rent Per Month:   $1,250.00
Total Rent:   $150,000.00
Monthly Principal & Interest (PI):   $1,063.74
House Total:   $140,154.67
Selling Price:   $172,321.05
Total Tax Savings:   $235.36
Equity At Time Of Sale:   $54,324.51
Money Saved Through Home Ownership:   $38,760.61


Owning a home would cost $48,605.94 less than renting.


Notes: This data is for informational purposes only and accuracy of the figures hereinafter set forth is not guaranteed. The actual costs with respect to each transaction will vary depending upon the circumstances.


A you can plainly see, that owning a home is a more financially savvy way to manage your money. It gets even better over time - say 30 years.


  • You get to decorate however you want!
  • You get to own whatever pets that you want!
  • You get a pride of ownership & accomplishment!
  • You get a more stable life!
  • You save money not moving every 12 months by not moving, again!
  • You get a sense of community!


So what's stopping you from calling me today?

A note from Cathy Bureau - I received several comments regarding the assumptions that I made and a few errors. I went back and made an adjustment for insurance ($100/mo not year), 25% instead of .25% on federal tax savings, $7500 for closing costs on the acquistion, and $3,000 per year for maintenance (grossly high but to address some comments).  I' leaving the appreciation at 1% per year, again, to be very conservative for my neigh sayers.  The revised savings is $40,390.47 cheaper to buy than to rent.  The bigger picutre, however, is that if you can stay put for 30 years the savings is a whopping $148,190.5


Re-Blogged 4 times:

Re-Blogged By Re-Blogged At
  1. Kathy Schowe 10/12/2011 01:03 PM
  2. Charles Stallions 10/15/2011 07:33 AM
  3. Praful Thakkar 10/16/2011 10:26 PM
  4. Michelle Cooks 03/17/2012 09:49 PM
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Kwee Huset
Kwee Huset Realty - Venice, FL
Venice Florida Homes For Sale

Cathy, congratulations on your FEATURED post. Great illustration of savings with ownership vs renting. Continued success!

Oct 12, 2011 09:47 PM #24
Evelyn Kennedy
Gallagher & Lindsey, Alameda, California - Alameda, CA
Alameda, Real Estate, Alameda, CA


Your simple and clear analysis of rent vs. own is very good.  You lay out the fact for rents to see that they should become buyers.

Oct 12, 2011 09:55 PM #25
Jerry Newman
Brown Realty, 210-789-4216, - San Antonio, TX
Texas REALTOR, San Antonio Military Relocation

Cathy, I came back to Congratulate you a well deserved Featured Post. I called this Shot but didn't say anything when I did. I know it was bound to be Featured.

Oct 12, 2011 11:32 PM #26
Cathy Bureau - Alamo Heights, TX
Your Personal Real Estate Concierge

Dear Consumer,

you brought up some very good points. I was trying out a new rent v buy calculator and there are a few relatively small errors from my input but rather inconsequential considering the amount of money on the table. I will be making an adjustment on this shortly.The insurance is $100/mo not year.  Yes double but so are your assets doubled. I won't make an adjustment for utilities as some have suggested because I'm comparing apples to apples so the size of the home is the same, so are the utility bills.  There is a bigger tax break than what I gave due to a decimal error too, in favor of the buy. There are 2 types of investment put back into the home, repairs/maintenance and then there are upgrades. Landscaping, painting, new cabinets, etc are an upgrade. Replace a broken window, roof repair, plumbing repair is maintenance. In an older home there will be more. I have been a home owner for over 20 years and I haven't spent more than a couple thousand a year on maintenance but many thousands on upgrades. This is just a baseline understanding of the comparison. Thanks for taking the time to write. I hope you come back to find me here. I'm also on Blessings.

Oct 13, 2011 12:08 AM #27
Cathy Bureau - Alamo Heights, TX
Your Personal Real Estate Concierge

Richard - Ummm super cute ghost right?  I'm just kinda silly like that. - You know you hit it big when hits you back!

Kwee - Thanks!

Evelyn - Thanks and glad you liked the simplicity of it.

Jerry - You're the bomb!  Love you!


Oct 13, 2011 12:10 AM #28
Lloyd Binen
Certified Realty Services - Saratoga, CA
Silicon Valley Realtor since 1976; 408-373-4411


I addition to the economic advantages and the other advantages you've mentioned, don't forget that the home is owned free and clear in 30 years of less.  Rent continues forever and ever; loan payments stop when the loan is paid off.

Oct 13, 2011 01:18 AM #29
Cheryl Ritchie
RE/MAX Leading Edge - Huntingtown, MD
Southern Maryland 301-980-7566
That is neat. Where do you get the rent vs buy calculator?
Oct 13, 2011 01:33 AM #30
Kimberley Rosenstein
HomeSmart - Scottsdale, AZ
Superior Service

Great information Cathy.  The information was layed out easily for renters to understand the benefits with facts.  Thank you.

Oct 13, 2011 02:09 AM #31
Angelica Blatt
Teles Properties - Monterey, CA
Broker-Associate 831/206-8070*Call today*

The sad part is that so many people that are displaced or have lost there home can't buy right now. But I do agree that it is always better to own then rent.

Oct 13, 2011 07:56 AM #32
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of Manchester NH's Leading Agents

Congratulations on your featured post Cathy. Great post as you get right to the point without alot of fluff. I agree utilities should not be included as you would pay them if you own or if you rent. Have a great day

Oct 13, 2011 09:01 AM #33
Sherri Wellborn
Reliant Realty, Murfreesboro - Murfreesboro, TN
Murfreesboro TN Homes & Real Estate

Cathy - I thought you laid out your argument on why it makes MORE financial sense to buy vs. rent perfectly.  You have to live somewhere and right now it just makes more sense to buy than rent!  Great post and congrats on being featured!

Oct 13, 2011 10:50 AM #34
Kevin Vitali
EXIT Realty- Massachusetts Short Sales & Residential Sales - Tewksbury, MA
Helping Massachusetts Home Buyers and Home Sellers

Cathy- Thanks for taking the time to do the calculations and spell out the difference between renting and owning a home in a clear and concise manner.

Oct 13, 2011 10:58 AM #35
Missy Caulk
Missy Caulk TEAM - Ann Arbor, MI
Savvy Realtor - Ann Arbor Real Estate

I have an app on my Iphone that compares so I always use that, makes it easy. 

It is by and a free App. 

Oct 13, 2011 11:08 AM #36
Bruce Kunz
Bruce Kunz @ HG Real Estate, NJ, 732-475-6703 - Howell, NJ
REALTOR®, Howell NJ Homes for Sale

Great information, Cathy!  Proving the "it's better to buy than to rent" mantra with and apples to apples comparison is really well done.
Interestingly, many of the younger people are opting to rent, even when they can afford a down payment, because they do not want to be "tied down". It's not always dollars that is important - especially with so many expecting to change employers every few years throughout their careers...
Thanks for posting!

Oct 13, 2011 12:58 PM #37
Lisa Dunham
Keller Williams Realty - Alexandria, VA
REALTOR, MBA, CDPE, Alexandria VA Real Estate, Short Sales

Excellent post Cathy!  I love the level of details you included here.  Great job and a well-deserved feature!

Oct 13, 2011 02:37 PM #38
Charles Stallions
Charles Stallions Real Estate Services - Pensacola, FL
800-309-3414 - Pensacola, Pace or Gulf Breeze, Fl.

Excellent post and I reblogged it so my clients would get the facts as well thanks for all your hard work.

Oct 17, 2011 10:18 PM #39
Mark Montross
Catamount Realty Group - Burlington, VT
Listing and Buyer Specialist

Cathy, fantastic article. You make some very good points and it is a very compelling article for home ownership!

Feb 21, 2012 07:26 PM #40
Jairo Arreola
Lotus Group Realty - San Jose, CA
VA Home Loan Specialist - SF Bay Area - South Bay

thanks for the breakdown Cathy! Hope you have a great week!

Mar 04, 2012 09:53 PM #41
Tim Lorenz
TIM LORENZ - Elite Home Sales Team - Mission Viejo, CA
949 874-2247

Great job and it is such a no brainer for the potential buyer.

Mar 17, 2012 09:53 PM #42
Lynn B. Friedman
Atlanta Homes ODAT Realty Call/Text 404-939-2727 Buckhead - Midtown - Westside -- and more ... - Atlanta, GA
Concierge Service for Our Atlanta Sellers & Buyers

Cathy -

You certainly put a lot of information into this post! Consumers will learn tons from your very hard effort. And REALTORS will learn as well.

Have a happy day -

Jul 21, 2012 11:38 PM #43
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