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  • Writer's pictureSang Han

Between buying and renting (Zillow Talk #2.)

Updated: Dec 19, 2021

Disclaimer: This is a very personal review of a real estate book that I've been very impressed with. Please be advised in advance that all data shared is from the book.

These days, many people who are currently renting a house start considering buying a house due to the historically low interest rate. And many of them ask me if they should buy or keep renting a house.

The second chapter of the book talks about that part.

Chapter 2. Stats and the City

In almost of cases, buying a house is a smarter option than renting in the "long term". However, it will matter how long that "long term" is.

Therefore, the book also explains that knowing "how long you will live in that house" is the most important factor to make a smart decision to buy or rent.

In the book, the moment when buying and selling make more profit than renting is called "Buy-Rent Breakeven Horizon". The following table shows the Breakeven Horizon of each major city in the United States.

Chicago (where I am living now) for instance, big Data Analysis shows that buying a house is a better decision than renting if you plan to live for more than 2.3 years (as of 2014).

In other words, when you are wondering whether to buy a house or rent a house in the future, calculating your own breakeven horizon will give you a clear guideline.

Then, how do we calculate the Buy-Rent Breakeven Horizon?

In fact, it is very simple. Most of the real estate sites have one for you. Of course, this book introduces the calculator. The link is below.

For me, I prefer the calculator provided by because it gives more insights and detailed analysis. The link is below.

I wish this blog help lots of forks out there who are thinking about purchasing a house.

As always, please feel free to reach out to me if you have any questions or need any help in real estate. Thank you for reading my blog.

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