Ramit Sethi ran the numbers on his own moves across San Francisco, New York, and Louisiana. Renting at $3,000/month cost him less than owning at $6,400/month when you add taxes, interest, maintenance, and opportunity cost. He invested the difference and came out ahead.
Sometimes it can actually be a better financial decision to rent than to own. Let me explain, because a lot of people listening are going, this guy just said, the sky's green. This makes no sense. Let me give you an example. I've lived in San Francisco, New York, Louisiana. Three very expensive cities. Sure, in each of those cities, it was cheaper for me to rent than to own. When I lived a few blocks from here, let's say that my rent was $3,000 a month. I kept a very close eye on the market. There was a building right next to me. Me. Same square footage, same view, same number of bathrooms and bedrooms. It would have cost $6,400 a month to own. When I factored in all the phantom costs, taxes, interest, maintenance, opportunity cost. So I didn't want to own. I didn't want the maintenance. I just said, I'm going to keep renting. I took the difference and I invested it. And I made way more than I ever would have made owning. So what's my message? It's that you need to run the numbers on the biggest purchase of your life, and you should never feel guilty about renting.
