Five factors often omitted in the rent versus buy equation!

I think one also has to keep in mind how long you are going to stay in a particular area.  If you are not going to stay very long, it will usually be cheaper to rent.

Absolutely, Richard. My younger son just went through this test and decided to buy.

Like others mentioned, I think  the key here is "Practicality".

Richard, those are excellent points to consider! Even if they do represent what might be the worst case scenario, renters should weigh those possible risks/costs against the benefit of what might be a cheaper and more flexible arrangement than buying.

Good list of factors to consider. I've seen more than one family rush to find a rental just because they didn't consider things on this list and they waited too long before they started looking.

Yes, there are a few not so obvious costs.  The moving is a big cost and huge inconvenience. - Debbie

I think the points you make are things that folks should consider when they are trying to decide whether to rent or buy.

Richard, well said - there is no right or wrong. It all depends on personal circumstances. However, may good points you have mentioned that I had never thought of.

Rent can go up within a three-month period

This is a great list of factors to consider when trying to decide whether to buy or rent.

From my own experience, I also like to share with my clients the psychological differences between the two.  Not everyone is receptive to it, and that's OK, but I know that when I finally got that first set of keys, I felt a heavy weight of transiency lifted and all at once felt a sense of community and permanency that allowed me to foster better friendships and commit to things with greater intent.  To me that mattered and it came with ownership --- all economics aside.

This is a very informative and accurate post Richard.  Not many people think about the rent going up or the owner (landlord) not paying the mortgage.  Thanks for the insight.  

Richard, a rent vs. buy analysis is a must. Many renters don't realize they can purchase a home.

Of course we will never get to 100% ownership. Some people should rent if their credit needs repairing in order to get the best rate, that they have a sense of responsibility that not only includes paying on time but realizing they are now responsibile for repairs and upgrades. On an Excel spreadsheet I can dramtically show that with interest and pro[erty tax deductions plus appreciation that the cost of home ownership is better. It is personal responsibilty that also must be included and a spreadsheet doesn't show that.

Great read, Richard... I'm of the opinion, even if you're only going to live there for a few years is buy! Of course it only makes sense if you can afford to do it. If that $1500 a month rent were thought of as a 30 mortgage at 4% interest that would equate to a mortgage right around $300,000. In many markets that's purchasing power for a pretty decent place to call home.

Time flies . . . and in a short time, maybe 15 if planned correctly, a home can be paid off.  Being a renter, this can never occur.

Hi, Richard:  With all due respect, there's no synchronicity or consistency in this post's content.

You say "there is no across the board right or wrong answer" when one is considering whether to rent or buy.  I can agree with that.  But then you proceed to rattle off 5 factors which (if viewed by the unbiased eye) say "Buy, buy, buy, buy and buy".

Unless you truly believe there IS an across the board right or wrong answer, wouldn't it make sense to present at least one point in favor of renting along with your five against doing so?

I'll offer a few things here that you and others who favor folks buying versus renting might overlook, for example:

1) some who are re-locating to an unfamiliar area choose to rent while getting accustomed to the area and deciding where they might want to buy or build a year or so down the road.  These folks being pushed toward buying in a place they ultimately hate benefits no one.

2) many are still having credit issues that render them unable to buy- or make it a possible yet imprudent thing to do.  Their situation might be better after renting for a year or so.

3) some in the rent an apartment/condo or buy a condo market fail to do their diligence with respect to researching the fiscal health of their COA's, etc- and with as many as I've seen around here that have gone under or slapped members with $1,000 special assessments to cover non-paying neighbors, everyone isn't prepared for that.

4) there's also the implication of the nuclear family in any argument for buying versus renting- which we know doesn't exist in every circumstance.  It's not ths best of ideas for boyfriends/girlfriends to co-sign for each other's vehicles- making leasing together a bit less ideal and buying together far from ideal.

I've tried to educate clients many times on the pitfalls of renting verses buying.

Unless there is a serious credit issues, buying will trump renting most every time.

This is really great information. Thank you for sharing and best of luck!