Learning • Step 7 of 8

Renting vs owning: make the first decision

Before you run mortgage math, decide what problem you’re solving: stability, flexibility, or monthly cost. Most people skip this step — and end up arguing with numbers that were never meant to answer the real question.

Renting buys flexibility

Renting keeps your options open. You can move without worrying about selling costs, market timing, or unexpected repairs.

Example

Buy a $500,000 home. • Buyer closing costs (2–3%): $10k–$15k • Seller closing costs later (6–8%): $30k–$40k • Total transaction costs (buy + sell): ~$45k–$55k If you put 10% down ($50k) and sell in ~5 years, most or all of that down payment can disappear into fees if prices don’t rise meaningfully.

Summary

If your timeline is uncertain, renting often preserves flexibility — even when the monthly rent looks “worse” than a mortgage estimate.

Owning buys control (and responsibility)

Owning can be great when you want stability and control. But it also means you’re responsible for everything that breaks — on the home’s schedule, not yours.

Example

In the first few years it’s common to see one or more of: • HVAC / roof / plumbing surprises ($5k–$20k+) • insurance increases • higher taxes after reassessment None of this changes your interest rate, but it changes your monthly reality.

Summary

Owning works best when you have buffer and a longer horizon. Without those, normal home costs feel like constant surprises.

A good first check

This isn’t about predicting the future. It’s about stress-testing your decision.

Example

Ask: If you had to sell in 3–5 years (job change, family needs, relocation), would the financial outcome still feel acceptable? If the answer is “that would really hurt,” that’s not a failure — it’s a signal.

Summary

Buying isn’t just a lifestyle choice. It’s a commitment to time, risk, and friction. If your timeline is uncertain, slowing down is often the smartest move.

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