overspending to saving a quick guide to financial wellness

Renting or Buying

The path to picking the perfect property

Part 4 | Reading Time: 9 minutes
By Ian Bin
You’ve read the title and come looking for the one true answer for this age-old question, but I’m going to have to burst your bubble a bit. The truth is, there is no one-size-fits-all answer when deciding between buying and renting a property. It can be confusing and stressful when deciding what to do, and if you need help, the sheer number of options can be overwhelming. It depends on a bunch of complex and very personal factors, but the goal of this article is to help you identify what pros and cons to look for when renting vs. buying.
Before we get too deep, let’s review some of the advantages and disadvantages of renting vs. buying. Let’s start the journey on paper so you can be prepared for when that time comes. Of those “complex and personal factors”, some of the biggest include your current income, location, local real estate market, and your specific needs and wants for your desired living space. Having a tool like the Rent vs Buy tool in the 3Nickels app can help you visualize the tradeoffs and understand which type of home you can feasibly afford to buy or rent.
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Advantages of home-buying

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You own the property

If buying a home is your goal, property ownership is a good advantage. After buying a house, you own the property, which means you can customize it however you want and truly make it yours. (Be sure to check with city regulations and Homeowner Associations before you get too crazy with the custom builds!) If specific living space needs are high on your priority list, owning is likely the way to go.

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It can be an investment

Home ownership can be a long-term investment. You have the potential, in the long run, to sell it for more than what you bought it for. Remember though, this is potential and not guaranteed, and the payoff in the end may not outweigh the financial burden of a mortgage while you are paying it off.

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There are tax advantages

On top of some of the obvious advantages, owning a home offers tax advantages as well. Homeowners can typically deduct mortgage interest and property taxes thus reducing their overall tax burden. This financial benefit can make owning a home more affordable in the long-run in certain situations.


You get stability

Another reason why owning a home might be for you is stability. While living in your own house, no one can change any rules and your mortgage typically doesn’t change by any significant amount, especially on a fixed mortgage rate. The amount you pay monthly will remain constant, so it’s easier to plan out your finances for the long-term.

Downsides of home-buying

Looking back at what we’ve covered so far makes it seem like buying is the way to go; however, home ownership has its downsides:
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Unpredictable expenses

Unpredictable home maintenance and repair costs can affect savings quickly. For example, if major repairs are needed (i.e., the roof, any heating or AC issue, or most issues related to plumbing) you could be in for a steep repair bill.

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It can be costly

Moving into a home can be costly and usually requires a significant initial sum of money to buy the house, known as a down payment—on top of real estate agent fees. Be sure to read any contracts involved in the buying process.

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It can be a long process

Buying a house is a potential long-term investment. Once you purchase a home, it won’t be a simple process if something like a new job requires a move. The entire buying and selling process can take months or even years.


Property tax

Property taxes, another expense that is often not discussed, will cost you extra—over and above the expense of your mortgage. Property taxes are a tax paid on property owned by an individual or other legal entity. 1

Advantages of renting

On the other hand, renting has its own set of advantages and disadvantages. Among those advantages:
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There's extra flexibility

Renting provides flexibility, especially for those still figuring out their long-term plans. Renters can move without the hassle of selling a property, making it a suitable choice for individuals with an ever-changing lifestyle or those who prefer not to be tied down to a specific location. Check with a rental property’s lease agreement before you sign anything. Some property owners require a minimum stay (6 months – 1 year).

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It can be more affordable

Renting can offer a more affordable alternative in hot real estate areas where home prices may be high. Also, renters are not responsible for property taxes, homeowners insurance, or maintenance costs; these are typically the landlord’s responsibility. This can free up additional funds for other purposes, such as saving for the future or investing.

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It can be a good alternative in an unpredictable market

Another aspect to consider is the current state of the housing market in your current location. Real estate markets are constantly changing, and it is crucial to assess whether it is a buyer’s or a renter’s market. If housing prices are high and the market is competitive, renting may be the way to go until the market stabilizes or becomes more affordable for buyers.

Downsides of renting

However, renting is not without its disadvantages.
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Rent can increase

Your landlord can increase the rent at agreed upon times in your lease. This makes costs unpredictable and complex to plan for the long term. Be sure to read your lease agreement and check to see if you’re in a rent controlled area.

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No tax benefits

Unlike owning a house, as discussed above, renting a property has no tax benefits. With renting, unlike a home, there is no possible higher return on value than what you paid for because you don’t own anything.


Customization requires approval

Apartments/rental properties also offer minimal freedom with your design choices, and any changes to your house or your apartment likely need a landlord’s approval. This may even include changes like pet ownership, as many apartments have a no-pet policy.

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When considering whether to buy or rent a property, objectively evaluating each option’s advantages and disadvantages should be your top priority. Look at your own potential and compare that with what is available in your area. There will always be tradeoffs with every decision you make, but making informed decisions can reduce these tradeoffs and help you trade away the things that might not be that important to you. Buying provides stability, potential appreciation, and tax benefits, while renting offers flexibility and financial advantages in particularly high real estate markets.
Use all the information you can gather. You can never be too informed, especially about something that can potentially cost hundreds of thousands of dollars. Below is a quick and simple cost comparison between buying and renting in Reno, Nevada as of month year.
Renting vs. buying infographic comparing a $650,000 house with a 30 year fixed mortgage and an apartment for $1350 per month.
Renting vs buying comparison of house and apartment in Reno, Nevada
Looking at the table above, the total cost is much cheaper to rent an apartment. However, owning a house means holding an asset worth a substantial amount of money. This asset can then grow in value. So, while the cost is more, the house is an asset you own, and the house can eventually increase in value, offsetting the cost while an apartment does not.

It is also important to note that the current market is different for every city, and these costs specifically apply to Reno, but at the very least, knowing these costs and what to look for can get you into the right mindset for the future. All the ongoing costs were calculated using the average price for the state itself. This does not cover every expense that comes with renting or buying and is more to give a general example.

The average rent in Reno for a 1-bedroom apartment was $1,325 as of July 2023,2 compared to the average mortgage payment a month of $4,367. This was calculated by taking the average price of a home in Reno, which in this case is $650,000. 3 Then you use the average down payment of 6% of the original cost. 4 Finally, you take the average 30-year fixed mortgage rate to get your monthly payment for a house. 5
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After figuring out the main costs, we now have to add in monthly costs like utilities and renters/homeowners insurance. On the renting side, the utility cost came out to $338 a month6, and renter’s insurance came out to $11 a month.7 The state average monthly ongoing costs for a house includes $91 for home insurance, $377 for maintenance, and $381 for utilities. 8 These costs are the average for the state of Nevada for 2023. While these are not all the costs, this is used to give a general idea of some of the monthly expenses you will likely experience.


1 Kagan, Julia. “Property Tax: Definition, What It’s Used for, How It’s Calculated.” Investopedia, 19 Dec. 2022, http://www.investopedia.com/terms/p/propertytax.asp#:~:text=Property%20tax%20is%20a%20tax,the%20owner%20of%20the%20property. 
2 Zumper. “Average Rent in Reno, NV and Cost Information.” Zumper, http://www.zumper.com/rent-research/reno-nv. Accessed 11 July 2023. 
3 “Reno, NV: Realtor.Com®.” Realtor.Com, http://www.realtor.com/realestateandhomes-search/Reno_NV/overview#. Accessed 11 July 2023. 
4 “Average down Payment on a House: Here’s What’s Typical.” Average Down Payment On A House: Here’s What’s Typical | Rocket Mortgage, www.rocketmortgage.com/learn/what-is-the-average-down-payment-on-a-house#:~:text=The%20average%20first%2Dtime%20buyer,National%20Association%20of%20REALTORS®. Accessed 11 July 2023. 
5 “Today’s Mortgage Rates: Bank of America.” Today’s Mortgage Purchase Rates | Bank of America, promotions.bankofamerica.com/homeloans/todays-rates/mortgage?subCampCode=41473&dmcode=18099642983&cm_mmc=CRE-SD1-_-Google-PS-_-Bank_of_America_Home_Loan-_-Brand_Core__642983&gclid=CjwKCAjw-7OlBhB8EiwAnoOEkykNBH4szau3NrTEqJ3qxkC_ji93fJFOPobEAG-YJ0sv0A5dBFd5VhoCiycQAvD_BwE&gclsrc=aw.ds. Accessed 11 July 2023. 
6 How Much Do Apartment Utilities Cost by State? – Rentcafe Rental Blog, http://www.rentcafe.com/blog/apartment-search-2/money/apartment-utilities-breakdown/. Accessed 11 July 2023. 
7 Fitzpatrick, Mark. “The Best and Cheapest Renters Insurance Companies in Nevada for 2023: Rankings, Reviews and Rates.” MoneyGeek.Com, http://www.moneygeek.com/insurance/renters/best-cheap-renters-insurance-in-nevada/#:~:text=Average%20Cost%20of%20Renters%20Insurance%20in%20Nevada&text=Nevada%20renters%20insurance%20is%2019.0,average%20of%20%24159%20per%20year. Accessed 11 July 2023. 
8 Clever Real Estate. “Buying a House in Nevada? Find out How Much It Will Cost You.” Clever Real Estate, 3 Dec. 2022, https://listwithclever.com/cost-to-buy-house-nevada/. 

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