A person buying a home holding the key to their new house.
Recently I received an email from an awesome sis-star named, Cadetrus. What a cool name! Cadetrus wrote, “I have a question….Can you or will you do a post about renting vs. buying?” I’m so glad you asked C! I’ll give you the advice I wish someone gave me before I bought a house.

First and foremost, always remember that a house is an investment. Don’t let anyone tell you otherwise. If you’re not going to make money in the long-run, it’s not a good idea.

Side note: Check out Home & Money—a free service that guides you on the path to homeownership and pairs you with the right agent in YOUR area. They also offer free calculators for affordability, renting vs. buying, mortgage, and refinancing. Check it out here!
The Budgetnista Buying a Home Checklist:

 Buying a Home Checklist   1) The mortgage is rentable. That means if times get financially rough and you have to move out to a cheaper apartment/parent’s house/friend’s couch, could you rent out your home and COMPLETELY cover your mortgage, taxes & insurance etc.? Figure this out by comparing rents of similar homes in the area where you are considering buying and structure your deal to make your mortgage the same or under what those homes rent for. This might involve you putting down a large down payment, reducing how much you pay for a home, or paying for points to reduce your interest rate etc.

Buying a Home Checklist2) You plan on staying in that location for awhile. Unless you’re buying an investment property, you should be reasonably sure that you’re ready to lay down roots in a specific location before buying a home there.
Buying a Home Checklist3) There is no big-ticket item / experience you’d like to have 1st. Once you get a house, that dream travel-trip, hot car, new business venture etc, may have to wait. The money you once had in excess will probably be greatly reduced during the 1st few years as a new homeowner.
Buying a Home Checklist4) You’ve consulted your future, MONTHLY budget. This is the budget you’ll be living on once you own a home. After doing said budget, ask yourself, after all of your expenses are taken care of…AND I MEAN ALL (new & old bills, utilities, new home expenses, entertainment,  groceries etc.), will you still have money left over to save? You should. Do the math. If your current income won’t cover your future expenses and leave you with money left over to save, you can’t afford to buy a home.
Buying a Home Checklist
  5) You’re currently saving your new (home) expenses each month. If you really want to know if you’re financially ready to buy a home, begin paying your mortgage and new home expenses to yourself in a savings account now (minus your rent). If you can’t pay a mortgage now,  then you won’t be able to “magically” pay your mortgage later.
 Buying a Home Checklist6) You LOVE or at least like your job. If you own a home and hate your job, it will be very difficult to leave a steady paycheck (despite the soul-crushing stress), because of your financial obligations (mortgage). If you don’t love what you’re doing and are renting, you can always leave for something you like more, but pays less, because moving to a cheaper place is a solution. Although it’s a hassle, moving is much easier when you’re renting.
Buying a Home Checklist7) You make sure it’s something YOU really want. I bought a home because I thought it was what I was “suppose” to do as a responsible adult (25 at the time). Not so. There’s nothing wrong with renting. It’s NOT throwing your money away. Renting allows you more financial freedom. It’s because I’m renting that I was able to start my business and still travel the world. Buying for the RIGHT reasons is good too though. 

Thanks for asking this question Cadetrus! 🙂



About the Author Tiffany Aliche

Tiffany “The Budgetnista” Aliche, is an award-winning teacher of financial education, America’s favorite, personal financial educator, and author of the New York Times Bestselling book, Get Good with Money. The Budgetnista is also an Amazon #1 bestselling author of The One Week Budget and the Live Richer Challenge series and most recently, a children's book, Happy Birthday Mali More.

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  1. Great post. I found myself faced with this dilemma as friends back home in the south were buying houses and felt rushed to buy something in NYC. Then I had to realize, I don’t even want to be in this city in 3 years. I decided to just work on saving and improving my credit and buying a house in DC where I plan to start a family.

    1. Thanks for the insight @tonyarapley:disqus ! I think a lot of millennials can relate. At some point everyone hears, “You should really buy a home. It’s a great investment”.

      Buy a home isn’t the right financial choice for everyone even if you have the money.


    2. Are you from D.C.!? I’ve lived here for about 4 years and my husband and I were considering buying last year, but also want to save and pay off some debt first.

      While looking I researched some affordable home buying programs for first time homebuyers in the area that are really amazing! There’s the Home Purchase Assistance program in D.C. and if you consider Montgomery County MD (great schools!) they have the MPDU Program. Have you heard of them?

  2. Tiffany this is all types of awesome! Great reminders that brings all things to the forefront. So many people feel obligated to purchase a home due to peer pressure, etc. Actually its amazing for Me personally I yearn for that apt rent! Hahahaha. I have my moments.

  3. I LOVE #5 and 6 because it makes that money-emotion connection very clear. Despite what anybody tells you, humans move on emotion, especially when it comes to money. I think wanting to do something is the most important indicator of how successful an endeavor or project will be.

  4. Thank you! Thank you! Thank you, so much for responding to my question. I appreciate the info you have presented me with. It has given me something to think about and the advice will help me move forward with confidence! You and your blog are definitely a blessing!

    1. You’re welcome, welcome welcome @disqus_hx2KLqoJ4E:disqus! Thank YOU for asking such a great question. It’s a privilege and a pleasure to be a resource to you and the women that visit my blog.

      I welcome more suggestions for posts. Also, please share any post you find useful. Women are the dispensers of knowledge. It’s up to us to reach and teach other.


  5. It’s true the pressure to conform is real. Last year I almost to laid down roots without considering all of this because I wanted to live in a space I could make my own…. Not my brightest hour. Thank goodness I got cold feet. I often get the itch to take on more “adult steps”, but my best step right now towards financial freedom is paying off debt!

  6. Question……how “old” is “too old” to buy a house? My husband and I are in our late 40’s and we are in the process of purchasing some property in hopes of building one day. But, sometimes I do not know if we really need to do that at our age. Any suggestions…….

  7. The rent can go up while your mortgage payments are steady and you know exactly how much you will pay monthly in 2, 5, even in 10 years. You are not sure when and for how much your rent will jump up, it’s not steady and it’s not up to you.
    You decide to move out of area or to a cheaper place? Your friend’s couch? Rent out your house, refinance your mortgage, or sell your house. You can not jump out from a rental property any time you want like it says in the post, because you are tied up with a lease. Loos your job, move out, pay fines for early cancellation of your lease and ruin your credit score.
    Pay $1000 rent = $12000 a year, leave that place and realise that you just spent (I’m not saying that you lost, I’m saying SPENT) $12000 and have nothing. Or: Pay the same $1000 mortgage, it’s the same $12000 a year, leave that place and realise that you still have an asset worth $200,000 (your real estate).
    Rent: pets are not allowed or aloowed for extra charge. Pay for parking permit. Walls paint is not allowed, enjoy the way they are.
    Your own house: flower garden, pool, pets, friends are welcome, room in your favorite colors, and a real estate that stays with you, your children and your grandchildren and the children of your grandchildren. And even when the house falls appart, the grandchildren of your grandchildren stil own the land. Unique and undesturbing land, the history and roots of your family.
    And how comes that if you pay rent you are able to travel but if you pay a mortgage you are stuck? Same money, go to travel, mortgage is even more stable and often much cheaper. Besides, do you rent a million dollar massion on a beach? If not, then why do you think that you have to buy a million dollar house? Lots of beautiful houses in good locations cost under $200,000. Even under $100,000.. And your payments could be as low as $300 -500 a month. Less than a rent. Down payment would be involved but it all pays out better than rent.

    1. Cost of buying and renting homes is widely variable. I think you’re oversimplifying and not recognizing varying contexts. For example, where I live, I could NEVER afford to buy a home, but my rent is reasonable. It’s because there are so many more rental properties than ones to purchase. There are a ton of other factors too.

      Buying is not for everyone. I have no skills. That means anything goes wrong, and I’m having to pay to repair it. I have asked so many homeowners how much they have *really* “made” on their homes, and by the time they remove the taxes, interest, insurance, and maintenance they’ve spent on it, they haven’t come out any better than I have with paying rent.

      Beyond that, not everyone wants to be bothered with the worry and stress of ownership. I love that I can travel and not be worried about my home the way I’d have to be if I owned it. I can put my stuff in storage and sublet and travel for 2-3 months and I really don’t care nearly as much if they wreck the place as I would if I owned it.

      And I really don’t care about gardening, a pool, or painting walls. Unless I’m living in one of these places with grey walls, which I HATE, I can live with most any paint color. And my pet is happily living with me in my rental.

      I have been investigating this for 5 years, and have consulted my brother who is extremely knowledgeable about real estate. He agrees with me that given the context of where I live and my lifestyle, renting makes at least as much sense as buying.

      Tiffany’s advice is solid. As always.

  8. Great advice! I looked at my age now and where i wanted to be in the next few years and decided against buying right now. I don’t believe that its going to be the end of the world if I dont buy a home.

  9. How do single mommies do it? I want to purchase a home badly but, one income and these Cali home prices are no joke. Although i Love my job and am fully vested in it I don’t think it’s enough for me to purchase a home with. Any advice???

  10. Thank you for this. At the end of the day. you have to do what is right for you. I live In Brooklyn, NY. the average for a two bedroom apartment is $1800. Between rent and after school care for my kids, I’m looking at over $2,500. Everyone says, you need to move out of NY. Think I have not looked into that. But most of the jobs pay less than half of what I make now, I will need a car and still have to pay for childcare. If im not going to have a better life out of NY. why move and to have a better life, you have to be able to afford that life

  11. A great post. I always tell home buyers to make sure they have a list of things they want in their home. Its important to list down the “must haves” and the “may haves”. Priorities what you want and what you don’t want. A home is a lifetime investment and you want it to be the best one.

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