woman calling a number off of a for sale sign in front of a home

Rent vs. Buy: What Should You Do?

Real Estate Advice

by Shannon Jacobs Posted on July 8, 2022

If you’re like a lot of Americans right now, you’re weighing some pretty heavy economic considerations — from rising gas and food costs to the looming possibility of a recession. One of the weightiest issues? Housing. The market finally after a nearly unimaginable rise in prices — the median home price was than in May 2019. But questions remain: What if the cooling off turns into a housing crash (though it likely won’t)? Is this a good time to buy a home, or is renting smarter than buying right now? 

If you’re contemplating a move amid all the uncertainty, read on for a look at the rent vs. buy dilemma — including some tips on how to decide which option is best for you. 

Which one is better: buying or renting?

There are all kinds of variables that go into this equation: the state of the economy, your employment situation, your short-term financial objectives and long-term goals, local market conditions — and the list goes on. So is it better to rent or buy in 2022? Let’s take a look at a few high-level pros and cons of buying vs. renting:


  • Pro: You’re making an investment that can contribute to your long-term financial security.
  • Con: There are lots of costs involved in home ownership beyond just the mortgage payment, including property taxes, general maintenance and upkeep, insurance, landscaping, and more. 
  • Pro: Buying a home provides a sense of stability.
  • Con: It’s not always easy to sell a home — current conditions notwithstanding — if you’re transferred to a new city for work or you make a major life change like getting married.
  • Pro: If you’re into a fixer-upper, you might be able to find a great deal, even in today’s market.
  • Con: Renovation costs can be prohibitive, particularly as inflation ticks up; the cost of goods and services was at the same time — the most dramatic jump in four decades. And while supply chain issues are easing up from pandemic slowdowns, it’s still not super easy to get certain materials when you need them.


  • Pro: Costs beyond monthly rent are generally nonexistent because the landlord pays property taxes and maintenance.
  • Con: Your rent isn’t an investment; you don’t earn anything from your monthly payments to the landlord except a place to stay while your lease is in effect.
  • Pro: Routine maintenance is taken care of by the landlord; in most cases, you only need to make a phone call when something breaks.
  • Con: Relying on others can get annoying. And with the current in many cities, you might wait a long while to get that dishwasher or garage door working again. 
  • Pro: Big life transitions are easier (think moving and changing jobs) without having to sell a home.
  • Con: The feeling of impermanence can get old. For a lot of people, aging brings with it a need for roots and stability that you can’t necessarily get from a rental, which generally proceeds on a year-to-year basis. 
A couple is reviewing paperwork with a real estate professional in a conference room.

What are some of the extra costs associated with buying and renting?

Yes, you’re making that long-term investment in your financial future when you become a homeowner. And you have the flexibility to move without worrying about selling your home if you’re a renter. But here are a few additional costs to keep in mind that go beyond the monthly mortgage or rent payment.

Closing Costs
If you’re taking out a loan to purchase a home, in general, this fee adds up to . So if your mortgage is $200,000, tack on as much as $12,000 in closing costs. 

Down Payment/Security Deposit
When buying a home, there are some good incentive programs available for first-time home buyers. However, on average, providing a 10%-20% down payment is typical — and it’s due at your closing. So for that $200,000 home, you’ll likely need another $20,000.

When you’re signing a new lease, it’s customary to pay a security deposit in addition to the first month’s rent. This deposit can be whatever the landlord deems to be necessary — equal to a month’s rent, dependent on how long your lease is, more expensive if you have pets, etc.

Property Taxes
If you’re purchasing a new home, be sure not to neglect taxes when you’re calculating your monthly costs. Property tax is based on the value of your home, your local and state tax rules, and other factors — and should definitely be a consideration in your decision.

Moving Costs
This one applies to both situations. The average cost to make a local move with a two-person moving team is — but if you’re moving more than 100 miles away, you’re looking at a higher price tag. It all depends on how far and how much you’re moving. 

You can make that process easier and more economical with PODS — a flexible option for both moving and storage. PODS delivers your container straight to your driveway, where you can pack and load it on your own schedule. If you decide to downsize to a smaller, more affordable rental while you wait for the market to turn in your favor, you can store some of your things in a secure PODS Storage Center until you’re ready to purchase your forever home and relocate permanently. 

Should you consider buying a home?

While there are definite advantages to renting, it’s not always the optimal choice. There are a few scenarios to consider that might mean it’s the right time to buy:

  • You’re financially secure and in a position to invest. Real estate is generally a good bet for ROI (return on investment), even in a bumpy market. 
  • You’re starting a family. Buying a home isn’t a prerequisite for having kids. But for some people, the old cliche of putting down roots is important — cliches are cliches for a reason, after all! — and contributes to a sense of permanence and security. 
  • You’ve found a home you love and the price is right. The housing market has been beyond volatile for the past two years, so if you find something you love that’s within your budget, go for it — before someone else does. 

Should you rent instead of buying?

Home prices are the main factor for many people in the rent vs. buy conundrum. As we’ve mentioned, the housing market has been on fire for the past two years, with May’s . The soaring costs are thanks to a few reasons, including pandemic-fueled, pent-up demand; a home production shortfall since the last housing crash; and ongoing supply chain issues that are dragging out the building process for new homes.

But some of those same factors are affecting the rental market, too. Apartment occupancy during the first quarter of 2022 set a record at almost 98%, . Rental prices surged, as well — up 15% or more since last year at the same time. 

So bottom line: Is it cheaper to rent or buy? And is renting a waste of money? It’s important to examine your financial situation before you make a decision about which path to take. And keep reading — we’ve got a tool to help.

A person holding a calculator and a pen utilizes the 5% rule to help determine if renting or buying is the best choice.

What is the 5% rule in the rent vs. buy home dilemma?

You can thank for this handy way to evaluate whether you’re financially equipped to rent or buy. Here’s how it works:

  • Multiply the cost of a home by 5%.
  • Divide that number by 12. 
  • This figure is your “break even” point. 
  • If the rent for a similar home is below that breakeven point, it’s smarter to rent. If it’s higher, buying is the way to go. 

The tool is like your very own rent vs. buy calculator — give it a try! Keep in mind, though, as we’ve mentioned, that buying includes property taxes and maintenance costs, plus the cost of doing business — interest rates, fees, and the like. 

Ready to ditch the rental life for your very own fixer-upper? Check out the PODS Blog for some great tips on surviving the chaos of remodeling, ideas for planet-friendly renovations, and renovations that can help boost your bottom line

Shannon Jacobs is a Tampa-based freelance writer and frequent contributor to the PODS Blog. She has lived in Atlanta, the Berkshires, and Nashville, but always returns to the warmth of Florida’s Gulf Coast.

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