SHOULD I RENT OR SHOULD I PURCHASE  -      ASKMRSMART.COM

Conventional wisdom was to save you money to purchase rather than simply rent.  Renting was seen as being equivalent to throwing money away. That wisdom is now in question since home prices do not always go higher.  Even in a flat market you can pay too high a price in relation to rental value.

The assumption that housing is always a “bull market” is gone.  It was easy to lose sight of the relationship between price and the rental value of a home.  This constant of home expenses vs rental value is the basis of RENT VS OWNING.

Always do the math in terms of net rent which is the annual rent a house would command, minus property taxes, insurance, maintenance costs, losses from occasional vacancies and any fees paid to property managers.