Throw Out the Rent Versus Buy Rules of Thumb

<p>Are you buying or renting? What are the perks of being a homeowner? Think through and focus on both financial and non-financial reasons.</p> <p>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.</p> <h3><strong>Topics Discussed:</strong></h3> <ul> <li>Why buy? Live in it 3-5 years to break even and recoup upfront transaction costs</li> <li>Why rent? The best option if you plan to live there only a couple of months or years</li> <li>Numbers: Mortgage closing, realtor commissions, improvement costs, and ROI</li> <li>Taxes: Deduct ownership expenses; can&rsquo;t deduct property/mortgage insurance</li> <li>Insurance: Renter&rsquo;s insurance is less expensive than homeowner&rsquo;s insurance</li> <li>Homeowners&rsquo; Association (HOA) Fees: Added costs for homeownership</li> <li>Uncertainty and Overestimation: Bias of living in a home longer than expected</li> <li>Lifestyle Creep: Living beyond your means and not analyzing home prices</li> <li>Headache Factor: Rent-not your problem; buy-home ownership increases issues</li> <li>The joy of Ownership: Cultural and cool factors to owning your own home</li> <li>Renting: Gets old not being able to do what you want with your place</li> <li>Rent vs. Buy Examples: <ul> <li>2362 Heather Way, Lexington, KY</li> <li>8704 Grand Ferry Dr., Austin, TX</li> </ul> </li> </ul> <h3><strong>Links:</strong></h3> <p><a href="https://fred.stlouisfed.org/series/CSUSHPINSA">Real Estate Home Price Indexes</a></p> <p><a href="https://smartasset.com/mortgage/price-to-rent-ratio-in-us-cities">Price To Rent Ratio</a></p> <p><a href="https://www.zillow.com/homedetails/8704-Corran-Ferry-Dr-Austin-TX-78749/29499616_zpid/">Austin Rental Example</a></p> <p><a href="https://www.zillow.com/homedetails/2362-Heather-Way-Lexington-KY-40503/77531831_zpid/">Lexington Rental Example</a></p> <p><a href="https://web.a.ebscohost.com/abstract?direct=true&amp;profile=ehost&a