Ep. 225 – Renting Versus Buying For 2024 

 March 20, 2024

How to Buy a Home | Renting Versus Buying


Is it better to rent or buy in 2024? Here are a first-time home buyer’s tips on the pros and cons of renting versus buying for you in this episode. The average home price is around $400,000 today, with an average size of 1800 square feet. If you think you can’t afford the mortgage because you live paycheck to paycheck, David Sidoni has a tip for you. The way Pedro did in the previous episode, you can still buy a home with zero down payment. Don’t burden yourself with paying your rent forever. Think long-term and learn from this discussion!

Renting Versus Buying For 2024

Rent sucks. High mortgage interest rates suck. High home prices suck. What do you do? All this sucking makes me think of the face that you make when you suck on something sour like a lemon. Here comes my cheesy dad comment. Your landlord and the housing market are a big bucket of lemons. Let’s figure out how to make some lemonade.

What is up, my how to buy a homeys? How is everybody? A little cheesy from the beginning there. Cheese, lemons. It’s the end of the day. I’m hungry. In this episode, we are making lemonade out of the question, is it better to rent than buy right now? I am going to suggest as we get into answering this question that perhaps you think about maybe a dash or two of vodka in that lemonade because things can definitely seem a bit sour if you don’t have all the information and you’re looking at the crazy housing market.

I’ll even give you a little head start with that. When I got out of bed, it sounded like someone had stepped on bubble wrap as every joint in my body cracked because I am old. We are heading into the busy spring season of the housing market. Let’s tackle this origin story of questions first-time home buyers have about buying versus renting. Is it better to rent or buy?

As an old dude who has been doing this for eighteen years now as I record this, let me tell you exactly what I have seen when people come to me calculating the rent versus buy equation. Probably the biggest mistake, and it’s not their fault, it’s the way people present it to them, is they’re asking the question, is it cheaper to rent than to buy right now?

Is It Cheaper To Buy Or Rent Today?

That’s the mistake because you’re asking, is it cheaper to rent with my monthly payment than it is for a monthly payment to buy a home? People get caught up in the numbers of now and they see more logic in trying to time their first purchase based on that question of how much the monthly payment is going to be. Assuming that they’re going to be able to time a cheaper period somewhere in the future where the monthly numbers are more in their favor. Assuming that if they do that and work the timing, that is the best way for them to get a strong financial win, that makes sense.

Here’s the truth bomb. It is not mathematically true and never more untrue than when we are heading into an appreciating market. If you’re looking for information on that, check out episodes 211 through 214 to learn about supply and demand that’s going to be making that happen based on one thing and one thing only. Low inventory.

As always, you guys know that I’m here on your side, and in generations past, I see that there are some people who figured out that perhaps timing a purchase to have a better monthly equation made more sense for them. Those types of people were waiting for a dip in prices. That was the logical ebb and flow, the up and down of the real estate market. I tell you, even if you had a Marty McFly-style almanac, and it wasn’t about sports, it was about real estate and rent prices, for most people, if you had hindsight and you went and looked in the past waiting for a dip so that that monthly rent versus buy number was better for you, it still ends up not being as financially better in the long run.

Here I go again with my math and my facts to make my argument. I know I should be doing something crazy and something loud and nuts and different, but if people on social media are going to spew misinformation with crazy loud balloons and streamers about how it’s too damn expensive and they can’t afford to buy a home and it becomes a giant bitch fest, you guys know I’m not a fear monger. If they want to play the fear game, cool. I can play it, too, but I actually play it with facts.

Go back to Episode 223 on the potential renter’s economy that some people are talking about. That’s a scary fact. Do you want to play fear? That’s fear. If you look at how much it costs to rent per month versus how much it costs to own per month, of course, you’re going to look at those numbers and you’re going to think you can’t afford to do it, but the math says you actually can’t afford not to do it. At least look into creating a game plan.

We’re going to look at the math that they used based on what I call the present-day variables, and then we’ll see how they confuse that singular equation, that present-day formula and say, “That’s my answer right there,” as opposed to looking at the multi-layered complex calculations. Here it is. Is it currently cheaper to rent than to buy when it comes to your monthly payment? In 2024, if you’re asking me if it’s cheaper to rent a shelter than it is to buy one, for many of you people out there, the answer is yes.

In 2020, it wasn’t, but the map has changed. However, if you’re asking me, is it currently better to rent than to buy? Not cheaper per month, but better for you, for most of you out there, in the long run, even in the medium run, I’m not talking 30 years from now, I’m talking 4 or 5, 10 years from now, the math shows a different picture.

The monthly “savings” that you get as a renter are far outweighed by the wealth accumulated, with the benefits of becoming the master of your domain and owning a piece of the largest payment that you make each month. It’s that magic equity and the math of a fixed monthly payment compared to the ever-rising rental payments in this new landlord corporate economy.

The monthly savings you get as a renter outweigh the wealth accumulated with the benefits of becoming the master of your domain and owning a piece of the largest payment you make each month.

Let’s start with the math and then I’ll get into some theories and philosophies. For this particular equation, I’m going to be super fair and conservative. I’m even going to use the lowest common denominator so you can see for yourself that this mathematical equation is built in actual data and facts. It’s not a bait and switch. I’m not telling you, “Let me do the math for someone.” You find out later I’m talking about someone with $100,000 saved, a killer salary and an 800 credit score.

Equation Of Renting Versus Buying

No. This equation of renting versus buying lowest common denominator, someone living paycheck to paycheck, barely making rent and having a tough time saving. I’m betting that you are somewhere between the bait and switch, $100,000 saved, great job, 800 credit score, ready to rock and this lowest common denominator. I keep saying that because I’m doing the math analogy.

Realize, if you are above the lowest common denominator, somewhere between paycheck to paycheck, can’t make any savings, barely making rent, and $100,000 saved, you’re probably somewhere in the middle. You’re going to have even more options when you see that this lowest denominator actually has options where the math also works for them. The average home price right now is around $400,000 with the average size of that home being approximately 1,800 square feet. To purchase something like that, you’re going to go all in 5% down 7% mortgage rate, PITI is going to cost you about $3,100 a month. That’s approximately.

At the same time, the average US rent for a 900-square-foot apartment, half the size, is about $1,800. Let’s say you’re living paycheck to paycheck and $1,800 is a stretch for you, but you want to live in that average starter home of $400,000. You look at that $3,100 a month price tag and you realize, “I pay $1,800. I got to pay $3,100 to buy that starter home. I’m saving $1,300 a month here. That’s a better deal for me.” For those of you not following math, $3,100 minus $1,800 is $1,300. O

Here’s where the variables come in. If you’re living in that 900 square feet because you’re living paycheck to paycheck and you can’t buy the $400,000 home because $1,300 more a month is way too much to stretch, then you’re sitting there going, “Forget it. I’m done. I’m going to save up. I’m going to wait for interest rates to come down or prices to come down, and then I can figure this out when I’ve got a little bit more savings and, most importantly, when that math is better on my side.”

I’m totally on your side, but I think people haven’t given you the full math. Here’s the math. What could you save? If you’re living paycheck to paycheck and you’re paying out $1,800 a month in rent? Let’s say you get crazy motivated and figure out a way to cut back on your budget and save $500 a month. This means that now, let’s say that you magically got the savings for a down payment and closing costs. You would be cool going from $800, $500 more to $2,300 a month. That’s saying you would be cool to go out and buy a house right now if you could do that, but you don’t have that.

What we’re going to do is you don’t have the savings. $2,300 a month would still be a stretch and there’s no way in hell you can hit that $3,100. You decide that right now because you don’t have the savings and it doesn’t matter because if you did, you could only stretch to $2,300 and $3,100 too much. Now you decide renting is cheaper than buying for my monthly spreadsheet. I’m going to stay renting, waiting for a dip in the prices or the rates until owning has a monthly number that gets closer to what you can afford right now, which is about $2,300.

Hopefully, then, you’re getting some good advice from someone and you decide, “Maybe I want to buy someday, so I’m going to start saving.” Instead of paying that $2,300, since that doesn’t get you anything anyway, you’re going to scrimp and save $500 a month like you’re practicing to pay that $2,300 in the future. What does that savings mean for you for a year while you’re waiting?

$500 a month, $6,000 a year. I hope you can follow that math, homies. Cool. Let’s call that your down payment savings account. That’s your first year, but what happens if we end up doing it for two years? The math, even for the lowest common denominator, paycheck to paycheck buyer with no savings, this math coming up kills the, it’s cheaper to rent versus buying because the equation only thinks about the monthly expense now.

$6,000 a year is $12,000 at the end of two years. No, it’s not because you’re going to get a rent increase. I’ll be very conservative for this example, and assume that you only got one rent increase in two years, which was only $100. Wouldn’t that be nice? For this example, I’m doing it that way. $100 times 12 payments is $1,200. Instead of $12,000, $6,000 twice, your new savings is down to $10,800 for two years.

In those same two years, how much did you spend in rent? $1,800 times 12 months. That’s $21,600. $1,900 times 12 months, that’s $22,800. In total, in two years, you spent $44,400 on rent. That’s money that made your landlord richer and that you’re never going to see a return on. As we talked about, it doesn’t matter. You’re stuck. You can’t afford it. You can’t afford $3,100 a month, so what are you going to do?

Not to rub salt in your wounds or to pour into your lemonade, but unfortunately, according to the predictions, you’re going to miss out on at least 10% of appreciation and the price of the home if you’d bought a home here in the spring of 2024. For the data behind that number, why are we thinking 10% at the minimum? That’s episodes 211 through 214 for the forecast.

How to Buy a Home | Renting Versus Buying
Renting Versus Buying: You will miss out on at least 10% of appreciation and the home price if you buy a home here in the spring of 2024.


You lost $44,400 in rent, and your $400,000 home that you would’ve purchased, it would’ve got 10% equity. That’s $40,000 in equity. You paid out $44,400 and you lost $40,000 in equity. In this two-year plan, it’s cheaper monthly to rent than to buy, but you lost $44,400 in your landlord, $40,000 in equity, but again, you’re looking at me going, “It doesn’t matter, David. I’m super glad you have a show and you think you’re cool, old man. I can’t afford $3,100 a month. It doesn’t matter.”

Once again, I’m going to show a possible answer with math right now for this lowest common denominator scenario because I want this revolution to help everybody. Some of you out there are not in this situation, but some of you are, and I want to make sure that everybody has a chance at this. For those of you who are in a better situation than this, I, unfortunately, hear too many of you talking to friends and family are reaching out to me and saying, “This isn’t going to work,” because you’ve bought into the present day rent versus buy equation, the present-day hype.

“It’s way too expensive. Renting’s way cheaper than buying right now.” Unfortunately, I think a lot of people get caught up at that and they outsmart themselves. The math I’m about to do right now is the worst-case scenario, and I love helping the worst-case scenario, but I know that many of you right now are not in the worst-case scenario.

Maybe you already pay $3,000 a month in your rent. Maybe you have some savings, you have a 401(k) you can pull from, maybe you can afford more a month and you’re a good saver. Maybe you’ve been thinking about this for a long time, but you’ve never actually run your own numbers. Some of you out there might even be lucky enough to get a gift from parents, friends, or other relatives to help you out with the down payment because each of you is totally different.

I will show you what I’m going to use this $ 1,800-a-month person in the 900-square-foot apartment. First of all, let’s not forget that a 900-square-foot apartment at $1,800 a month is half the size of the $400,000 average home in the same neighborhood. $3,100 a month is a lot more, but of course, you’d end up getting double the size of your living space. Instead of trying to make that big leap, which makes the monthly leap, $1,800 to $3,100, how about instead of trying to make the big leap from an apartment to a starter home, maybe looking at the more reasonable option that would help get you in the game? This is where we talk about the stepping-stone property and using that as a strategy.

Instead of making the big leap from an apartment to a starter home, maybe looking at the more reasonable option would help get you in the game.

Unicorn Team

A $300,000 condo or town home that’s going to cost you $2,500 a month. I know you’re still like, “That’s still too much. $700 more a month. Plus, Dave, I still got to save the down payment and the closing costs. It’s $700 more a month. What am I going to do?” In the last episode, we learned about Pedro. He bought a home with zero down that was not a VA loan, which most people usually use for it. He had a special loan program for regular first-time home buyers that happened to be happening at the time that he bought his home. How’d he find out about that? He had a unicorn lender who had the experience to know about this loan product being available and found out that Pedro was qualified.

Let’s say that that works in the scenario. What if you could get a condo for $300,000, zero down and you got the seller to give you a credit that you could use for a 2-1 mortgage interest rate buy down? That would mean that in the first year because it’s a 2-1, it goes down 2 points from 7% to 5%, and then the payment would be $2,100 for the first 12 months, and the second year the payment would be $2,300. The second year at $2,300, that’s at 6% and somewhere in the next couple of years, before it jumps up to 7% in the third year, you’re probably going to be able to refinance into the 5%, maybe even lower.

That would mean you’re locking into a payment somewhere around $2,100, $2,200 to $2,300 that you could live with for the rest of your life. This is the math for the fictional paycheck-to-paycheck person who’s waiting to save up to buy someday, even though there are options. I said it before. You don’t know what you don’t know. It’s an option for, I don’t know, maybe a 1,200 square foot, two-bedroom condo and townhome that they could buy in the next few months with a payment that they could handle.

They would start saving that $44,400 in lost rent that would’ve happened over the next two years. They could start putting it towards their own future, not to mention 10% on a $300,000 condo in the next couple of years. That’s $30,000 in equity. Yes, it’s cheaper to stay in your 900-square-foot apartment and not buy a single-family home double the size. Is it better? Is it going to make you more money financially in the long run? The problem with rent versus buy is people get caught up in the actual monthly payment math, and they don’t look at the long run.

I figured all this out off the top of my bald ass head and I figured out how to at least give an option to a person living paycheck to paycheck with no savings and maybe they can’t get the zero down. Maybe they have to save up for a few years, but great, at least now, they’re on the right track doing the savings. As the market shifts and adjusts, they’ve got a unicorn team with them to help them shift and adjust with it and take advantage.

That’s what I could do off the top of my bald ass head. Imagine what the right experienced pro could show you in your situation, which is likely somewhere above this lowest common denominator, a paycheck-to-paycheck scenario. This is just math. There are tons of other philosophies, financial theories and not to mention emotional reasons for people letting the fear trap them into staying a renter longer than they want to be.

Several years ago, even before the show started, I read an article from a Harvard study looking at the financial side of owning versus renting, just the straight numbers from these Harvard nerds. They listed these five fiscal reasons for owning versus renting. This one was interesting. Not a lot of people talk about this. It’s the best-leveraged investment available to you. Economists love to create mathematical theories on investing, saying how to “use other people’s money” to make money.

Leverage is not only the best way to push a rock. You stick the stick in it and you do the caveman thing. Leverage is the best way for you to invest because it means less capital investment for you; thus, you can get into the game earlier. The second thing they said is you are paying for housing whether you rent or buy. That’s simple. I’ve been saying that forever. In this economy, that’s why I’m discussing buying a home with you as a rent replacement strategy instead of your HGTV dream shopping. I know that sounds like some sour ass lemonade, but that’s the way you got to buy in this particular economy.

How to Buy a Home | Renting Versus Buying
Renting Versus Buying: Leverage is the best way to do any investing because it means less of a capital investment for you.


The number three thing from the Harvard Report, home payments are a forced savings account. Some of the money you pay monthly goes towards your principal, not a lot at the beginning, but eventually it does. Your home grows like any other investment or retirement fund, and it historically averages 3% to 4% a year. It’s a forced savings account. Number four, they mentioned the tax benefits. As I said, this is years ago. Tax laws have changed, but one thing policymakers love to do with the laws is try to help homeowners.

There might not be a ton now as many as there were in the past, but you never know. They could come back. Check with your tax person to see how homeownership could positively affect your tax situation. Number five, another one that people go, “What? I never knew that,” but it’s true. The data’s there. Buying a home is a hedge against inflation.

Everyone thinks that inflation crushes everything in the economy. The one thing that stays stable during high inflation times and the numbers is that they’re right there in black-and-white housing. When inflation is hit over the last 75 years, home ownership is the one asset that either stays right even or is appreciated during these giant times of economic suffrage. Is that right? No. Isn’t suffrage women’s right to vote? I know that. Why did I even say that?

There’s even more data to help ease your fears and stop thinking that these present-day monthly numbers are something that can defeat this data. I’m going to drop the knowledge and the truth bombs with more math in a moment, but please, this is the time of the show when I ask you if this is helping you in any way, please go to Spotify or Apple and write a review for the show.

The revolution is going. We’re helping people from $175,000, $200,000 all the way up to $2 million and $3 million. We want to help as many people as we can. Please take the time and write a review. I know it’s stupid, but if there are no views, there are no followers, and there are no subscriptions on shows. The more reviews we have, then the Spotify and Apple and podcast gods think that I actually know what I’m talking about.

If you’re looking for a unicorn team yourself, HowToBuyAHome.com. All the stuff is there and it’s all free. Reaching out to a unicorn, same thing, free. You check them out. If you like them, great. If you don’t, whatever. I don’t care. There are three different phases on the website. You can get the starter kit, ask me an individual question, or say, “I’m ready for a unicorn.”

My last thoughts on rent versus buy are before I go home and call it a day. Many of these thoughts and philosophies are old like me and they’ve stood the test of time. Most importantly, they stood the test of hindsight. Running the numbers and proving the math works. I know that the math sucks in 2024, but one thing that has historically been there is that no matter who you are when you’re buying a home, the first 3 to 5 years of your mortgage payment, if you think that sucks, the good news is that’s the worst it’s ever going to feel because it’s fixed.

You’re also going to feel better about it because you’re young and you should, hopefully, be making more money as you get older. Rents always go up, but your payment’s always fixed. That widening gap between the rent that you paid and that fixed, continual, long-term payment, that’s going to make things feel easier as the years progress.

Another thing is equity in the home is the number one way for the middle class to accumulate and grow wealth of any kind. This is for anybody. If you want to live a nice, chill, balanced life, you don’t want to be some fatty entrepreneur, you want to have a simple life, a balanced life, the sooner that you exchange your biggest monthly payment, your payment to a landlord, for payment to yourself and your own future, the more equity that you will have to cash out later.

How to Buy a Home | Renting Versus Buying
Renting Versus Buying: The sooner you exchange your biggest monthly payment to a landlord and exchange that for payment to yourself and your future, the more equity you will have to cash out later.


Buying into a home is a forced savings account. You create that equity and the equity is acquired for the people who want to own a home, have a job, and make a payment. This is the number one way for the middle class to accumulate their wealth. If you are a little more aggressive or you’ve got bigger plans than that, cool. You can use this first home as that stepping stone. I heard Barbara Corcoran say, “You’ve got to get a trading card. You got to get your first trading card,” and maybe you end up using the ADU principles from a few episodes ago or other investing principles to accumulate wealth. All those investment plans and strategies all need capital to begin. Your first trading card is your home. The sooner you start, then the actually the larger your stepping stone will become.

If you’re a little more aggressive or have bigger plans, you can use this first home as that stepping stone.

It’s something that maybe you could work with the next 3, 5, or 10 years. Finally, I tell everybody this, which I learn every day, you don’t know what you don’t know. I’m not saying that you don’t know that this is easier than you think. Come on down, buy a house. It’s nothing. No. It’s something. I’ve seen in the past that a lot of people, because they don’t know what they don’t know, end up going into deep, dark, freaky, harsh places in their minds, and they get more scared than they should.

In this new economy, you absolutely owe it to yourself to be informed and not scared. Protect yourself. Fear paralyzes your mind. In this case, it could paralyze your bank account. I’ve been helping people do this for many years. My helping first-time home buyers is an adult. The one thing that I’ve heard over the years of helping people is, damn, Sidoni, if I had known all this, I could have quit renting years ago. Now you know. No more excuses. You can do this.


Important Links


This podcast was started for YOU, to demystify things for first time home buyers, and help crush the confusion. After helping first timers for over 13 years, I knew there wasn’t t a lot of clear, tangible, useable information out there on the internet, so I started this podcast. Help me spread the word to other people just like you, dying for answers. Tell your friends, family, and perhaps that random neighbor you REALLY want to move out about How to Buy a Home! A really easy way is to hit the share button and text it to your friends. Go for it, help someone out. And if you’re not already a regular listener, subscribe and get constant updates on the market. If you are a regular and learned something, help me help others – give the show a quick review in Apple Podcasts or wherever you get your podcasts, or write a review on Spotify. Let’s change the way the real estate industry treats you first time buyers, one buyer at a time, starting with you – and make sure your favorite people don’t get screwed by going into this HUGE step blind and confused. Viva la Unicorn Revolution!

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You Might Also Be Interested In:

Ep. 234 – Interview With Yadi and Victor – Dreamed Of Homeownership And Found A Way
Ep. 230 – NAR Lawsuit – The New Rules For Real Estate And How To Buy A Home – PART 1
Ep 229 – What Is A Unicorn Real Estate Team?
Ep 228 – Interview With Andrew And Melissa Who Did NOT Need 20% Down To Buy And Bought Their First Home In A Matter Of Weeks!