Does it Make More Sense to Buy or to Rent?

January 15, 2015 2:48 pm

"Does it make more sense to buy or to rent?" It's a question many renters ask themselves, and it's not necessarily one with a simple answer.

A recent study conducted by HelloWallet and reported by U.S. News & World Report suggested that "more than half of current homeowners would have actually been better off financially by renting and investing during the particular period in which they bought," and noted the homeownership rate of people 35 and younger has fallen to just 36%, a record low. Some of that is undoubtedly due to financial necessity, but the low homeownership rate may also be motivated by a desire to stay mobile in the face of job opportunities. The HelloWallet study noted, for instance, that homeownership makes more sense for those planning to stay in a house for more than four years, with the exact number of years dependent on the area's "rent-to-price ratio."

In some cases it can make financial sense to consider buying. A article entitled "Answering the rent-or-buy riddle" suggests that the combination of low home prices and high (and increasing) rents in a given rental market can make it make sense for renters to think about buying a home — especially for those who want to stay in the same place. offers a useful "Rent vs. Buy Calculator" which asks questions about whether you can afford a lump sum down payment, what your monthly budget is like, and whether you have an enthusiasm for doing the inevitable home maintenance projects that pop up. People shouldn't underestimate the costs of such "hidden expenses": an Investopedia article on "The Hidden Costs of Home Ownership" notes that potential homeowners should also consider the amortized costs of really big expenses like replacing a house's roof, its HVAC system, or its plumbing, along with other more routine costs like maintenance, taxes, and insurance.

Renters take note: such upkeep costs may not be captured accurately in a rent vs. buy calculator! Undoubtedly a decision about whether to rent or to buy involves more than just financial concerns, but doing your financial due diligence might help you reframe the question of whether it makes more sense to buy or to rent.

"Study: Renting is Smarter Than Buying for Half of Homeowners" [U.S. News & World Report]
"Answering the rent-or-buy riddle" []
"Rent vs. Buy Calculator" []
"The Hidden Costs of Homeownership" [Investopedia]

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Energy Saving Tips for Renters

November 25, 2014 4:01 pm

As fall turns into winter and the temperature drops, many apartment renters find themselves turning on their heat once again. Turning on the heat means turning up energy costs, but has some tips to help you conserve energy and save money in your apartment home:

Use Your Thermostat Efficiently
If your apartment has a programmable thermostat, take some time to program it with the most energy efficient settings. The ENERGY STAR website has some helpful tips for programming thermostats properly. For example, the site recommends keeping the heat at a constant low throughout the day and again at night. If your apartment's thermostat is non-programmable, you should be sure to remember to turn the heat down when you'll be asleep or you won't be home.

Get Help from the Sun
By opening curtains, blinds, and drapes during the day, you can let sunlight in to help warm your space. Likewise, closing curtains at night can help keep cold air at bay. In the heat of summer, you can help your space remain cool by closing curtains and blinds during the day to keep out direct sunlight.

Make Other Energy Saving Changes
While you're planning to keep your apartment home warm in the most efficient way possible, it's also worthwhile to take some time to think about other energy saving changes you could make to help lower your utility bills. Some simple ways to conserve energy include taking showers rather than baths, unplugging televisions, stereos, and other electronic devices when you're not using them, and replacing incandescent bulbs with compact fluorescent light bulbs or LED bulbs.

For more tips on using energy more efficiently in your apartment home, check out the following links:
Proper Use Guidelines for Programmable Thermostats []
Top 10 Tips for Renters! []

Category: For Renters Tags: , ,