People always ask me if this is a good time to buy a home.
No one ever asks when it’s a good time to rent a home.
So let me answer the question people do not ask, which is way more important than the question they do ask.
In most cases, there is no good time to rent a home. Residential rental rates are approaching all-time highs and interest rates are still very low. Home buyers today are able to apply minimal down payments (3-5%) and have a mortgage payment that is hundreds of dollars less than a rent payment. Plus, the interest and property tax portion of a mortgage payment is still a tax deduction, saving you more precious Benjamins next April 15th.
Paying rent is like flushing Benjamins down the toilet. One-hundred dollar bills down the crapper. Every month. Month after Month.
Rent is a 4-letter-word that will stunt your financial growth.
And to make matters worse, rent rates are skyrocketing with no end in sight. My dear friends at Keeping Current Matters recently posted this lovely chart to illustrate why landlords drive new Tesla’s:
Of course, there are a few valid reasons to rent a home.
Most of these reasons are short-term reasons. Like renting an Airbnb condo on the beach for your next vacation or renting an affordable place while you are saving to make that whopping 3% down payment on your real estate nest egg. You can Google “why it’s better to rent than buy” and find dozens of pages comparing the two options. The argument can be made to tip toward the rent side by focusing on maintenance cost concerns.
But when you rent, you miss out on the secret weapon of real estate…