The Dream of Home Ownership is Wrong

by Jun 4, 2020Blog2 comments

Home Ownership. The American Dream. This is often a poor financial decision.

I will prove it to you with my own personal situation.

I often get a jaw-dropping reaction when I tell people that I rent our primary residence even though we own over 10 homes.  

“Why would you rent? Aren’t you just throwing away money?” These are the standard comments I always get from people. And they couldn’t be more wrong.

As a country, Americans often look down on renting. I always call myself the “trashy renter”   🙂

There are virtually no rent houses where my family lives. Renting is often financially beneficial and much cheaper than owning a home. It doesn’t make sense to me why more people don’t rent.

We (myself, wife and three kids under 6) rent in an extremely large master-planned subdivision in Austin, TX. We have 5,000+ homes in the sub-division, 4 swimming pools, a community center, and have a golf course a stone’s throw away. Entry-level homes are in the mid-$400’s, but the majority of the homes are in the $600k to $800k range with some creeping up on $1 million.  

As I write this in May of 2020, I am renewing my lease for another 2 years. I am pumped, as I love being a renter! Even though I bought my first house at 24 and my first investment property in my late 20’s, being a renter is great. This renewal will make me a renter for 5 straight years now.

“But Brian! You haven’t given me a reason yet!”

Well, let’s get into some numbers so you understand why I like to rent:

  • Our house’s value is $600k.
  • Our current monthly rent (years 4 and 5) is $2,900 per month.
  • Total rent paid in the first three years of occupancy: $101,400.

When you look at that three-year number it seems like a lot. BUT, what would those numbers be if I owned this house?

  • Down payment to buy this house – $120,000 + closing costs
    Side Note: that number literally makes me want to throw-up. I can go purchase a house in cash for that same price.  I just bought a house this past fall in Corpus Christi, TX for $120,000 and the monthly rent is $1,350 — that seems like a much better use of $120k to me).
  • Mortgage Loan – $480,000 
  • Interest Rate of Around 4% (and I have good credit)
  • Monthly Payment – $2,292
  • Monthly Taxes – $1,450 (2.9% property taxes in Austin)
  • Monthly Insurance – $200
  • Monthly HOA – $50
  • Total Monthly Payment: $3,992

If you look at the numbers above, you are paying $1,700/mo. on this house and you get zero for it. That amount goes to property taxes, insurance, and the HOA. 

The new monthly rent I just signed for is only $2,900/mo. My rent payment is $1,100 cheaper per month than if I owned the house.

I know what you’re thinking. And yes, I do miss out on my tax deductions from owning a home. But that doesn’t even come close to the monthly payment difference, the $120k down payment where I can no longer have that money working for me, and the cost of maintenance.

People often don’t understand how to factor maintenance into your home. A roof needs to be replaced every 20-25 years down here in Texas due to sun and other environmental factors. Air conditioners typically have 15-year lifespan. And that’s just two of the big-ticket items.

Our current rent home will need to have both AC units replaced soon and the roof is getting close to the end of its life. That wonderful bundle of maintenance alone will cost $30k or more. Averaged out over 20 years, you can consider it an additional $1,500/year to the cost of your home. Plus, once you get past the surface items like roofing and the AC units, you’ll discover the plethora of additional items like privacy fences, appliances, paint/flooring, sprinkler systems, gutters, windows… and suddenly you’ve added hundreds of extraneous dollars per month to your costs in home ownership.   

Is renting starting to sound better from a financial standpoint? 

I sure as hell hope so, because it is!

Remember the 3-year number for renting? It was $101,400. The 3-year number for owning is $263,712. If you remove the down payment, it is $143,712. That doesn’t even take into account any upgrades or repairs. It would have cost $42k more to own this home rather than rent it over the first three years.

From a non-financial perspective, one benefit my wife and I have personally enjoyed due to being renters is that “when is enough actually enough.”  While this home is very nice, it does look a little “rent-house-ish.” We are currently getting the landlord to replace carpet as it is old and dated.  It has cheap bamboo floors, dated tile, and the kitchen cabinets need to be painted and updated. I would much rather have grey or white quartz counter tops than black granite as well.

Will those items above make me happier? Maybe. But to what extent? Does that extra happiness justify an additional $100k cash spend?  Or, are we better off investing that money to create more financial freedom? I do have to admit… I hit my breaking point with the mid 2000’s beige paint and have actually repainted most of the 3,400 sq ft home myself to a more modern paint color.  

There is obviously intrinsic value of home ownership and in some areas buying is more practical than renting. Typically the higher the home price rises, the better deal it is to rent. If you look at the table below, I compare the numbers for my home and the home of one of my close friends. He lives about 5 minutes away and we each had the great idea to start renting at about the same time.  

One thing to consider on his rent price is that it also includes his pool maintenance and yard maintenance. He is on about 1.25 acres and has a massive pool, and that cost is probably $500 to $1,000/mo. Keep that in mind when looking at his numbers. 


As was already mentioned on the $600k house, the savings is almost $1,100/mo.  On the $1.2m house, the savings is almost $2,900/mo.  The larger house has even better monthly savings when you take into account that yard and pool maintenance are included. 

What could you do with an extra $1,100 to $2,900 per month? I used this to help launch my own business and now that the company is established I use it to invest more and create a larger retirement pot for my future self-down the road. How much extra will you make if you had never made that large cash down payment and bought more cash-producing assets?  

I love working and won’t retire young. However, I also love financial freedom and want the ability to retire young. I am sure I will purchase a home one day. For now, being a trashy renter is one way I am securing my financial freedom. I am investing our savings to add to our real estate portfolio and will continue to gobble up cash-producing assets that most likely will appreciate at a higher clip than a “fancy” house.

If you look at the numbers, renting isn’t so bad after all. Maybe you should consider renting too.


  1. Macy

    I absolutely love this perspective and this article! I shared it with quite a few people.

    • Brian Lang

      Thank you!


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