The 10-Question Rent vs. Buy Checklist
10-question rent vs. buy decision checklist
| Question | Buy Answer Required | Rent Answer Required |
|---|---|---|
| 1. What’s the local P/R ratio? | Below 20 for buy to be competitive | Above 20 strongly favors renting |
| 2. How long will I stay? | 7+ years for break-even certainty | Under 5 years almost always favors renting |
| 3. Is the emergency fund fully funded? | Yes — homeownership requires it | Yes — financial resilience always matters |
| 4. Is down payment saved beyond emergency fund? | Yes — never raid emergency fund for down | Down payment stays invested in stocks if renting |
| 5. What’s the total monthly ownership cost? | PITI + taxes + insurance + maintenance | Just rent + renters insurance |
| 6. What are local home appreciation expectations? | Research 10-20 year local trends | Doesn’t directly affect renting math |
| 7. What’s the break-even calculation? | Run calculator — under 7 years is solid | N/A |
| 8. Does buying fit career mobility needs? | Would job change require selling soon? | Renting provides mobility flexibility |
| 9. What’s the investment alternative return? | 7% expected stock market return | Explicitly invest the down payment alternative |
| 10. What are the non-financial priorities? | Stability, school district, customization | Flexibility, lower commitment, geographic options |
Answers favoring buying: P/R < 18, stay 7+ years, emergency fund funded, down payment ready, monthly cost under 30% of gross, 3–5% local appreciation, break-even under 6 years. If 7+ of these conditions are met: buy. If fewer than 5: rent and continue building toward buying conditions.
Questions That Override the Calculator
Some questions override the mathematical analysis: (1) career requires geographic flexibility (military, consulting, academia) — always favor renting; (2) family health requires proximity to specific medical facilities that may change — rent for flexibility; (3) divorce or significant relationship uncertainty — rent until stability.
Run the Calculator as Item 7
The checklist tells you what you need. The calculator tells you if the numbers work.