Renting and investing, or buying — which builds more wealth?
Not "which is cheaper per month" — which leaves you with more net wealth after 20 years, accounting for what a renter could invest instead of a down payment.
Enter your rent and the house price you're considering to run the simulation.
Questions people actually ask
- What happens to the down payment in the renting scenario?
- It's invested from day one, growing at your assumed investment return for the full comparison period — since a renter never spends it on a house, treating it as spent (rather than invested) would understate the renting path's wealth.
- Why might buying still lose even if rent keeps rising?
- If your assumed investment return is high relative to property appreciation, the renter's invested down payment and monthly savings can out-compound the buyer's home equity, even while paying steadily rising rent — this is exactly the trade-off the year-by-year chart is built to show.
- Should I just trust whichever number is higher?
- Treat it as one input, not the whole decision — this doesn't account for the non-financial value of owning (stability, no landlord risk) or renting (flexibility, no maintenance responsibility), both of which matter in practice.