AgentMortgage

Don’t let monthly costs decide rent-or-buy question

Weigh costs, benefits and listen to your gut feeling

Rent versus buy "I am a 48-year-old divorced female. I have been renting for the last 10 years. My friends keep telling me that renting is 'throwing your money away.' But if I buy, my monthly housing costs will probably double. I wonder if at my age I would not be better off putting the difference into a retirement account?" Rent versus buy is a perennial issue, and a very complicated one. The decision is not properly made by looking at monthly costs – there would be few homeowners around if that is all they looked at. Homeowners build equity, which is part of their wealth, in many cases the major part. The equity can be extracted later in life by selling the house or by taking out a reverse mortgage. Or they can leave it in their estate for others to enjoy, if that is their inclination. Usually I refer people who ask me about this to calculator 6a on my Web site, which pulls together all the financial costs and benefits associated with any particular rent-versus-buy decisi...