OWNING vs RENTING A HOME – Why RENTING May Be The Smarter Move For YOU

renting versus buying a home has always
been a really big debate which one is better which one is right today I’m
gonna break down all the numbers give you some really good statistics and it
show you which one I think is better I’m excited to toggle buying versus renting
today let’s get into the video hi friends open a freedom in a budget my
name is Kelly and my channel is all about living life well in a budget and I
share how would from a living paycheck-to-paycheck to now winning with
money and I share with you all the tips and good habits that I’ve learned along
the way if you aren’t already subscriber I would love for you to hit the
subscribe button and join the family we often hear that renting is just throwing
away money but is it today I’m going head-to-head with let’s talk money with
Joseph Hogan we’re gonna see who’s right I’m gonna run all the numbers and show
you why renting is often the better choice and he’s gonna try and prove me
wrong and show why owning is the better choice if you haven’t already go check
out Joseph with let’s talk money and he’s gonna share with you why owning is
a better option he has an incredible youtube channel as well as actually some
books and of course I’ll have it linked it down below for you in the description
box they’re really amazing courses that are really gonna help you learn and grow
please let him know that Kelley with freedom in a budget sent you before we
get into the video please hit the like button it really helps with the YouTube
algorithm alright so let’s talk we’re taught when we graduate high school or
college now the best thing is to buy a house and that that is the right choice
and the best thing to do with your money is buying and if you’re renting you’re
throwing away money so I’m gonna break down with you the numbers we personally
just what houses just a couple months ago in July so obviously I don’t think
that renting is always the best choice but there’s so many people out there
that totally dismiss renting and I really want to get away from that
mindset know renting is sometimes the worst option but a lot of times it’s not
so I really want to just kind of break that stigma of renting is always the
worst choice all the numbers that I’m gonna share in this video are my own
personal numbers you guys know that I got real personal on this channel I
share my budget report cards a live outline how much we’re spending so I’m
also going to show you everything with our mortgage the first thing that we’re
gonna look at is how much equity is actually going towards our mortgage so
our personal mortgage payment is 1650 a month
but only 500 dollars of that 1650 actually goes to equity over $1,000 a
month is going to interest which just I cringe it over that over $1,000 it’s
going to hurt injured right now that’s crazy
no not good but as you can see in the graph here the the lower portion is our
principal and as you can see in the beginning that it is mostly interest and
then as time goes on it gets more and more principal so the mortgage hangers
are all interest heavy in the beginning so when you’re first buying a house that
is really frustrating to look at now let’s look at some of the additional
expenses that come with owning a house our rent and mortgage payments are very
close in price only about $40 difference our apartment was 1610 a month and our
house is 1649 and 14 cents and I will add that we live in South Florida’s just
to get you a little bit of where we are in the country we have an HOA that’s 91
dollars a month this does not include lawn care or anything only maintenance
of the community pool our electric bill went from about 55 dollars a month to
now $150 a month a permanent was 1200 square feet and now
we’re just under 2,000 square feet so not too much of a difference in size of
house next is our renters insurance before it was only 16 dollars and 58
cents a month now our homers insurance including windstorm but not flood
insurance is $280 a month we now have to pay city taxes on our house which are
three hundred thirty-four dollars a month we now have to pay $65 a month for
water this was previously factored into our rent and then lastly we have to pay
about $70 a month for lawn care in South Florida our lawn needs to be mowed every
other week I was just talking to a friend that lives in Portland Oregon and
she was saying that they have to only cut their lawn in the summer that the
other three seasons they don’t have to that it just is so cold that they don’t
have to yeah not in tough Florida we have to do it every other week
throughout the whole year so when you add up everything that’s an extra nine
hundred and fifty seven dollars a month that we’re having to pay to own a house
at versus renting in South Florida that’s crazy
that’s an extra 11,000 four hundred ninety dollars a year extra to own and
that’s not including repairs or anything like that
that would be covered if you rent so say our toy
it breaks our a/c breaks anything like that we used to be able to call
maintenance yeah now we don’t call maintenance now we
called husband or repairman or something else that we have to do to figure out
how to fix it so like I said owning a home over at the time may be a better
choice overall but I really really want to break that stigma of renting is
throwing away money as you can see here eleven thousand dollars a year that’s
crazy so when you already good buy a house here are some things that you need
to make sure that you have ready to go before you buy the first thing is the
down payment you had to have between 10 and 20 percent down if you have less
than 20 percent you’re gonna have to pay PMI there are a couple exceptions from
this like a VA loan something like that but typically anything under 20 percent
you do have to pay PMI insurance up until your home gets a 20% value next up
is closing time so closing costs are typically two to five percent of the
total mortgage next is emergency one this is a big one so many people they’re
so excited to buy a house and they get their closing cost and get their
downpayment they’re like alright we have all our money let’s do it
but they forget about the emergency fund and then something happens you know it’s
how 40 your a/c breaks or something like that and so far it’s not like you can
just be like oh okay we’ll go with the heat no your a/c breaks you got moles
you have mold fast so you have to be very very careful of that
and making sure that you’re having at least six months of an emergency fund
ready to go we’re actually moving towards a full years of expenses that
we’re slowly building back up and then lastly is repair fund so when you’re
buying a house you’re gonna have repairs you’re gonna have you know things that
come up especially when you first moved in little things like we had to change
out our outlets in the kitchen to GFI plugs I don’t know why they didn’t have
GFI outlets in the kitchen that’s dangerous so little things like that and
you know just little repairs by hoses buy new hinges on some stuff different
things so I recommend having at least three to five thousand dollars worth of
expenses worth of repairs that and little upgrades little things you know
painting you know a couple pieces of furniture that you may need to have
ready to go because that money is gonna be coming fast someone I
know that was just talking they were saying that when you buy a house it’s in
the thousands of dollars you no longer talking about hundreds of dollars oh
yeah a couple hundred dollars here a couple hundred there’s no it’s it’s more
like thousand dollars here a couple thousand there it’s crazy how fast it
all adds up now if we took that nine hundred and fifty seven dollars and
invested it where would we be then so let’s say we take nine hundred fifty
seven dollars let’s say seven percent just to be conservative over thirty
years you’re gonna have 1.1 million dollars at the end so 1.1 million
dollars or a house that’s worth three hundred seventy thousand dollars yeah
our house at the end is gonna be three hundred seventy but if I rent it and
invested the rest 1.1 million that’s crazy crazy crazy like that just blows
my mind another thing to consider is the flexibility of renting so when you’re
renting you can pack up and leave at the end of your lease you know most people
sign in a year to like new year leases and then they’re free they can move
I personally moved into places that we love in the beginning that is just so
cute so beautiful it’s a perfect location but then after you’ve lived
there for six months you’re like alright I’m sick of this place and neighbors
upstairs are super loud the neighborhood is not nice and it’s just not as good as
I thought it would be so you can leave now they would take a lot more for us to
move to sell the house to buy a new house all of that if you have a job
relocation something like that and then the lease so you can just look into
breaking the lease early and okay we’re done so the ease of getting added
release is definitely something consider I’ll be honest renting owning it’s it’s
a hard decision you know it’s it’s something that you really have to
consider so I want you to make the best decision for you so next up is gonna be
Joseph’s video make sure you go ahead over to Joseph’s channel check out his
video of why he thinks owning is the better option and if you haven’t already
hit the subscribe button join the family I would love to have you so go check out
Joseph’s video next

14 thoughts on “OWNING vs RENTING A HOME – Why RENTING May Be The Smarter Move For YOU

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  • Love that you shared your numbers Kelly! Makes me realize I missed the closing costs in mine. 🙄 Still like a home as a 'forced-savings' plan and some of the emotional benefits. Even as a bow-tie numbers nerd, I love our home and we've got an emotional connection with the house and our community…$1.1 million dollars though 🤑 that is pretty amazing!

  • Your rental is/was a good price for this area. We rented a 1200 sq foot apartment and garage in So Florida and it was $1900 plus water, which for some reason was an insane amount. Our mortgage is a bit over $2000 (including property and insurance) but its 2,600 square foot house. So not apples to apples. We do unfortunately have a higher HOA of $300 a month but you do have amenities for that price including a gym, pool, tennis courts, basketball courts etc. So I think in South Florida I think it is more economical to buy if you have a down payment. P.S. we do eventually want to get out of an HOA as not being in control of increasing fees and the over the top restrictions are annoying.

  • I love this video. Being a military family we were told often that living on base or renting was a waste of money. We just did not listen to it because it is far easier to bring orders to a landlord, break a lease and move than it is to sell a home in 30 days or long distance landlord. Nevermind the peace of mind of having them make repairs when your spouse is deployed etc. There is a time and a place for everything. Also, when we did buy, we definitely needed 3-5k for home repairs and maintenance. Owning is definitely not a full proof "investment".

  • This was a great video! There are many perks to renting. Honestly paying a monthly rent that covers the cost of water, HOA, and repairs is a steal! We have owned our house for almost 2.5 years and have already had tons of maintenance cost. It’s so important to have a house maintenance/repair fund because they come so often. The true advantage of owning a home is if you plan to be there for many years. If you are only owning for a short time you are usually wasting money on interest, taxes, insurance, repairs. I heard somewhere that the amortization schedule for homes are made that in the first 7-8 years you pay a ton in interest because most people only live in a home for that amount of time. So the bank is winning! I love our home and the space we have but honestly we could have paid off our student loans faster if we had stayed in an apartment because we would have more disposable income. The baby steps make sense!

  • Out of all the videos I've viewed on "Renting vs Owning", this video has by far been the most helpful. Other videos have been very informative but I believe this video just helped me to finalize a decision whether to rent or own. Thank you for posting this.

  • I am currently 25 and totally agree with you about the perks of renting. I've been able to move around freely, explore new areas/demographics, and invest my money into stocks & bonds. My Mom is a realtor so you know she has been trying to get me to buy. I won't buy until I can find good cheap land and can use my construction business to try and build something small.

    Just subbed 🙂

  • Wow thanks for doing the breakdown of this. We are family of 5 and we rent we've been renting. Since before we got married 13 years ago. the least amount we've ever spent for a rental was $500 in the most is $925. Typically I think our rent has been in the $700-$800 range on average though. We purposefully have looked for homes that were less than $1,000 to rent. We live in the Pittsburgh area there are a lot of rentals that or more than what we pay. And we haven't always lived in the nicest of homes. The $500 left slot to be desired. Lol. but we have always lived in pretty safe neighborhoods areas / school districts. This is very important to me. we haven't made the best financial decisions otherwise so being homeowners definitely wouldn't be ideal for us. Especially right now. We would like to own a home with some land eventually. But we have a lot of other things that need straightened out first. and we need to be able to save money because I know comes, so much cost of their own typically repairs and I'm sure we wouldn't be buying a brand new home will you be buying something that would be a fixer-upper of sorts.

  • My husband always wants move after a year or two… so whenever we do end up buying a house I'm kind of afraid for that. Lol. We have moved over 10 times.

  • I think rent is best for us (husband & i) because he only have 30% of his heart working so up keep of house can not be good by him and I can't do everything. I try though lol. Have a beautiful rest of week.✌🍊👻🎃👍

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