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Should You Rent or Buy a Home?

Compare the advantages of renting and buying a home.

By
Laura Adams, MBA
6-minute read
Episode #192

Is It Better to Buy or Rent?

There are some good calculators that can help you with the rent versus buy dilemma at sites like bankrate.com, dinkytown.com, and nolo.com. But none of these calculators are perfect. You have to input key information—like how much a property will appreciate, how much you’ll spend on maintenance, and the inflation rate, for instance—which you can estimate, but are virtually impossible to know.

As usual, I have some final quick and dirty tips. The first is that you should never buy a home unless you’re certain that you’ll stay there for at least five years. You never know how long it could take to sell a house and you have to pay closing costs each time you buy and sell real estate.

And lastly, just because you qualify for a mortgage doesn’t mean that you should get one. It’s a big commitment that has to fit in with all your other financial goals, such as putting enough aside for retirement and paying down your existing debt. If renting will save you money so you can accomplish your financial objectives, then that may be the way to go. But, if buying a home has more advantages and you’re willing to put down some roots, then I’d encourage you to make owning an affordable home one of your goals.

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More Resources:
Dinkytown.com: Rent vs. Buy Calculator
Bankrate.com: How Much House Can You Afford Calculator
NYTimes.com: Is It Better to Buy or Rent Calculator
Nolo.com: Should I Rent or Buy Calculator
SmartMoney.com: Rent or Buy Calculator
MotleyFool.com: Am I Better Off Renting? Calculator

Image courtesy of Shutterstock

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About the Author

Laura Adams, MBA

Laura Adams received an MBA from the University of Florida. She's an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers is her newest title. Laura's previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.