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5 Reasons Why Renting Is Better Than Buying

April 27, 2023

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Renting Is Not A Waste Of Money

While owning a home can certainly be a wise financial decision, consider how renting can be an alternate path to financial independence.

Both renting and owning a three-bedroom home are significant financial responsibilities for U.S. households, with costs accounting for more than one-third of average wages in most major housing markets. But average rents still require a much smaller portion of wages than major homeownership expenses on three-bedroom properties, according to ATTOM, a real estate data company.

Renting Is Not A Waste Of Money

I recently watched a news story where a real estate expert exclaimed, “Rent is throwing money away.” I’ve heard this same narrative from other financial experts, real estate agents, mortgage lenders, and even my own family and friends who are homeowners. These factors contributed to my urgency in purchasing my first home in 2013, even though I was perfectly fine renting.

Since then, I’ve bought and sold three different homes over the last decade. Just this year, though, I decided to rent again — surprising all of our friends and my personal finance followers because I had paid off all three homes. I even asked my husband: “Is it crazy for us to rent again? Are we wasting money?”

But renting still offers a very basic utility — a safe place to live, sleep and store our possessions. The comparison is often made between renting a home and owning a home. But we often forget the other comparison of renting a home versus not having one at all. For me, a home is not a part of my identity, but rather a basic need satisfied without having to purchase a property.

It’s Cheaper To Rent If You Prefer Big City Life

The financial sense of renting or buying depends a lot on where you prefer to live. According to an analysis by, in 45 of the 50 largest U.S. cities, renting is lower than buying a starter home. Despite rising costs, renting has become relatively more affordable than buying year-over-year.

The top five cities where it was cheaper to rent versus buy in 2023 were Austin, TX; San Francisco, CA; Seattle, WA; Boston, MA and Portland, OR.

In contrast, the top five cities where it was cheaper to buy versus rent in 2023 were Memphis, TN; Pittsburgh, PA; Birmingham, AL; St. Louis, MO and Baltimore, MD.

In some of the more affordable real estate markets, renters might find they will save cash each month by becoming a homeowner. But the job market profiles of these cities are vastly differently from the larger metropolitan areas with whose the local workforces powered by the tech industry.

I live in Charlotte, N.C., and I could buy another home on a 30-year mortgage for cheaper than what I rent right now. But it would require me to move 20 to 30 minutes away from my current address, where I have the accessibility to restaurants, entertainment, and shopping within walking distance. I sold my last home largely because location and convenience mattered to me more.

Renting Frees Up Time And Money To Grow Your Income

As a business owner, renting has been a huge time and money saver. I no longer have to pay for gas to drive to a gym, a coffeehouse, or a pool because they are all an elevator ride away in my apartment building. I picked the particular one I live in so I could hold business meetings in the common area instead of meeting people at an office or co-working space that I’d have to pay for.

My emergency fund now contains what I need for rent and utilities, and it requires thousands of dollars less than what I needed as a homeowner. I held onto savings in case my roof leaked again or if I would finally decide to renovate my bathroom. The money I spent on appliances and furniture for a home now goes to international travel for speaking engagements and learning new technical skills.

The largest gain I’ve had from the purchase of a real estate property was a little more than $250,000. But the investment of time I’ve put into my business has now given me the ability to generate $250,000 of revenue annually.

When You Buy A Home, You Can’t Easily Tap Into Your Wealth

In 2019, my husband and I were proud outright owners of our home by paying off our mortgage in our early thirties. I felt really confident in our decision going into 2020, when the Covid-19 pandemic shut down everything and our incomes became uncertain. I am still a huge proponent of paying off your mortgage early because of the peace it provided us.

In 2020, we bought a second home in the mountains, a small condo to escape from the city.

By 2021 it was also paid off and we officially passed $1 million in net worth for the first time, with the two homes as our biggest assets. What I didn’t expect: Even though we had $1 million in assets, we had very little flexibility with the equity tied up in the properties.

With our eyes on early retirement, we started looking for passive income and our first inclination was to operate short-term rentals to create a new monthly stream of money. While this did add additional income, it didn’t feel very passive — it was a lot of work and often inconvenient to manage the reservations and guests.

We could have taken out mortgages from the homes to free up more cash. But we weren’t comfortable with that risk during the pandemic uncertainty.

Ultimately, we decided to sell both homes and applied the proceeds of those sales toward other vehicles such as dividend ETFs, Treasury Bills and REITs. Those investments now offer us similar monthly cash flow that we can move much more easily than having to sell properties. I prefer the flexibility we have in moving our net worth, without affecting our living situation, as new investing opportunities arise.

By Renting Instead Of Owning, You're Rich With Time And Money

Bankrate’s recent Financial Security survey reported 74% of Americans consider homeownership to be of higher value than any other economic stability measure, including a comfortable retirement, a successful career, having children and holding a college degree. Pride is often cited as one of the main advantages of homeownership, where you have the freedom to express yourself in your house more than in a rental.

However, as a 38-year old practicing early retirement after reaching my financial independence goal, not owning a home has been incredibly liberating. My parents eventually owned their home outright, but my father didn’t retire from his corporate career until his 70s and he had little time for hobbies. I didn’t learn he loved hiking and seeing shows until he wasn’t as physically capable to enjoy those activities.

When my father passed away, I thought twice about whether or not I wanted to own my home or own my time early enough to enjoy it. Now that my husband and I are renting, there are no more do-it-yourself painting projects on a fixer-upper home. No more shopping for furniture to fill up rooms I barely ever use. My husband is over the moon that he no longer needs to mow the lawn weekly or power wash parts of our property every spring.

Just this past year, I took stand up comedy, dance and acting classes with the time I used to spend maintaining my home. I don’t feel as guilty spending on my health and wellness, and I get to come home from vacations without many chores. I’m not completely ruling out homeownership for me in the future. But while I’m in my prime years, I’m content to feel rich with time and not just money.

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