MYTH# 9: Rent vs Buy Calculators

Reality: Most of these calculators are overly simplified and seriously flawed.

An economic analysis of the leading calculators found numerous problems. Some fail to include basic costs like maintenance, insurance or property taxes. Others leave out the transaction costs of buying and selling a house.

Almost all of them assume you will itemize your tax deductions, when only 34% of all taxpayers actually do. Most do not factor in the returns you could earn by investing your savings instead of using it as a down payment. We posted a blog article about how you can invest wisely by renting an apartment in the long run.

The end result is that consumers who rely on these tools may make one of the most important decisions of their lives based on misleading data.[18]

The Bottom Line


Apartments offer maintenance-free, hassle-free living.


When you rent, you can relocate for job opportunities without incurring the cost of selling a house.


When you rent, instead of tying all your wealth up in a single investment, you can invest in a variety of stocks, bonds and mutual funds. In fact, you can still invest in real estate through Real Estate Investment Trusts (REIT), either individually or in REIT mutual funds.


Today’s apartments offer amenity packages that rival (and often surpass) single-family houses as well as access to new technologies that may be unaffordable in single-family houses.

Apartments often are located in neighborhoods with convenient access to transportation, employment, retail and entertainment.


Renting allows you to use your “down payment money” for other investments, to start a small business, to travel, or even to change careers.

“We wanted to be free of the responsibility of a homeowner and to be able to invest all of our money in the business. Apartment living is ideal because it is maintenance-free, convenient and worry-free.”

Rose and Gary Trousdale

Sports Management

Business Owners

Phoenix, Arizona


18. “Rent vs. Buy Calculators: How Helpful Are They?” Research Notes, National Multi Housing Council, June 29, 2001.

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