Renting vs. Buying a Home: The 5% Rule

Business
Published on Jul 19, 2021
Please note that while this content is broadly applicable, it was originally intended for a Canadian audience.

You can't compare rent to a mortgage payment. This way of thinking about the rent versus buy decision is extremely flawed. Comparing a mortgage payment to rent is not an apples to apples comparison. In order to properly assess the rent versus buy decision, we need to compare the total *unrecoverable costs* of renting to the total unrecoverable costs of owning.

That may sound like a complicated task, but I have boiled it down to a simple calculation.

Referenced in this video:
The Case for Renting a Home – Part 1 - https://www.pwlcapital.com/the-case-for-renting-a-home-part-1/
The Case for Renting a Home – Part 2 - https://www.pwlcapital.com/the-case-for-renting-a-home-part-2/
The Case for Renting - https://www.pwlcapital.com/resources/the-case-for-renting/
The Credit Suisse Global Investment Returns Yearbook 2018 - https://www.credit-suisse.com/media/assets/corporate/docs/about-us/media/media-release/2018/02/giry-summary-2018.pdf

Read up on more investing advice, insights and white papers here.
https://www.pwlcapital.com/teams/passmore-felix/?utm_source=youtube&utm_medium=copy&utm_campaign=ben2019&utm_content=5percent

------------------
Follow Ben Felix on
- Twitter: https://twitter.com/benjaminwfelix
- LinkedIn: https://www.linkedin.com/in/benjaminwfelix/

PWL Capital Blog Post: https://www.pwlcapital.com/rent-or-own-your-home-5-rule/

Follow PWL Capital on:
- Twitter: https://twitter.com/PWLCapital
- Facebook: https://www.facebook.com/PWLCapital
- LinkedIn: https://www.linkedin.com/company/pwl-capital/

You can find the Rational Reminder podcast on
Google Podcasts:
https://www.google.com/podcasts?feed=aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNz
Apple Podcasts:
https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?mt=2
Spotify Podcasts:
https://open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=hjZNfLKuSjSeWX38GPqhVA
------------------