Weichert Realtors®-Triangle

To Rent or Buy: What to Consider

by Mary Gallert 03/24/2020

Photo by Athitat Shinagowin via Shutterstock

You’ll often hear it stated that paying rent is throwing money down the drain. As a motivation to buy a home, however, that might not be the best idea. A rule of thumb is that if you can purchase a home for fifteen times what you currently pay annually in rent, buying makes sense. In real numbers, if your rent is $1,500 a month, your annual rent is $18,000. Fifteen times that amount is $270,000. That means if you can buy a comparable home for around $270,000, it makes sense to buy rather than to rent because you’ll break even in 15 years and will accrue equity beyond that.

But even if housing prices fit that scenario, what is your personal criteria?

Is renting throwing money away?

That depends. There are multiple rent vs. buy calculators online that allow you to plug in the variables that apply to your situation. The adage that it’s always better to buy may not fit into your lifestyle, career goals or plans. Don’t buy just because someone tells you that you’re tossing away your life savings. After all, if you have enough for a down payment, you can invest it in something more liquid than property.

But, buying is a fantastic idea if you love the community, see yourself living there for at least five years, and want to own your home.

There are some guidelines, however, to help you determine if you are ready. These require that you keep financial considerations separate.

  • Do you still have student loans? If so, determine the impact that more debt places not just on your pocketbook, but on your psyche. If having education debt stresses you out, adding more debt to that is not a solution. Instead, before you buy a home, work with a student debt counselor to see if you can make some headway on your loans.
  • Do you have an emergency fund? For some people, if they get a flat tire or the fuel pump goes out in the car, the burden of taking care of that emergency can throw all caution to the wind. Having an emergency fund of a minimum of $1000 for short-term emergencies (car repair, flight to a family funeral, etc.) and three to six months for long-term emergencies (extended illness, job loss) protects you from disasters lurking around every corner.
  • Can you set aside money for home maintenance? If you replace your rent one-to-one with a mortgage (even including taxes, PMI, and homeowner’s insurance), you still need funds for regular home maintenance. Generally, you’ll want to set aside about one percent of the cost of the house minimum for annual maintenance. If you buy your home for $300,000, you’ll need to set aside an extra $250 a month (3% or $750 a month is better) to cover repairs, maintenance, and upkeep of your home.

The other questions you want to answer are: How secure is your job? Could you be moving within five years? Do you qualify for a good interest rate? Buying just to escape renting is never a promising idea. But if the answer to these questions leads you to believe homeownership is right for you, in the right location, and it’s the right time, find the right real estate professional to help you get there.

About the Author

Mary Gallert


If you are interested in buying or selling in the Triangle area of North Carolina, I'd love to work with you!  Real estate transactions can be smooth -- if you have the right professional by your side.  I am passionate about real estate, dedicated to helping you sell your home for top dollar, and find the next home which is uniquely ideal for you.  

My professional background is in allied health, as well as sales and marketing.  I majored in Communications in college (my undergraduate was in Speech & Hearing), and I have a clinical doctorate in the field of Audiology, so I understand the importance of communication and advocacy!

As your agent, I will keep an open line of communication with you to understand your unique situation and goals, arm you with accurate information about the fast-paced Triangle market,  be responsive to your questions and concerns, and advocate for you throughout the entire process! If you read my client testimonials, you will see that I will negotiate effectively on your behalf, and I will “go the extra mile” for you. For you as a seller, this equates to my getting you the maximum return on your investment in the least amount of time.

I hail from the beautiful Hudson Valley region of New York.  My family and I relocated to Wake county over a decade ago, and we love all that this area has to offer.  I like to spend my free time outdoors with two daughters and two dogs (especially at the beach), and I enjoy keeping fit, and reading.   One of my goals for 2020 is to expand upon my support of dog "rescue" and fostering organizations in the area.

 I am proud to be affiliated with Weichert Realtors-Triangle, which is ranked in the top 20's of over 500 Weichert offices in the nation.  Call me today at 914-450-9054 (yes- a 914 area code); I am happy to answer any questions you may have about the home buying and selling process.  I would love to hear from you!