{
  "@context": "https://schema.org",
  "@type": "Dataset",
  "name": "Is renting really throwing money away compared with buying?",
  "description": "No. Owners also pay unrecoverable costs — mortgage interest, property tax, insurance, maintenance and transaction fees. On a $420,000 home at 6.5%, those unrecoverable costs run about $2,900/mo in year one, more than the $2,200 comparable rent.",
  "url": "https://www.revenuelab.fyi/answers/is-renting-throwing-money-away",
  "dateModified": "2026-10-01",
  "creator": {
    "@type": "Organization",
    "name": "RevenueLab",
    "url": "https://www.revenuelab.fyi"
  },
  "license": "https://creativecommons.org/licenses/by/4.0/",
  "keywords": [
    "Rent vs Buy Net Worth Calculator",
    "Down Payment Opportunity Cost Calculator"
  ],
  "distribution": {
    "@type": "DataDownload",
    "contentUrl": "https://www.revenuelab.fyi/api/public/page.json?path=answers%2Fis-renting-throwing-money-away",
    "encodingFormat": "application/json"
  },
  "json": {
    "type": "answer",
    "question": "Is renting really throwing money away compared with buying?",
    "shortAnswer": "No. Owners also pay unrecoverable costs — mortgage interest, property tax, insurance, maintenance and transaction fees. On a $420,000 home at 6.5%, those unrecoverable costs run about $2,900/mo in year one, more than the $2,200 comparable rent.",
    "tableTitle": "Unrecoverable costs: owner vs renter, year one",
    "columns": [
      "Cost",
      "Owner",
      "Renter"
    ],
    "rows": [
      {
        "label": "Mortgage interest",
        "value": "≈$2,040/mo",
        "note": "—"
      },
      {
        "label": "Property tax + insurance + maintenance",
        "value": "≈$893/mo",
        "note": "—"
      },
      {
        "label": "Rent",
        "value": "—",
        "note": "$2,200/mo"
      },
      {
        "label": "Buying closing costs (spread over 7 yrs)",
        "value": "≈$150/mo",
        "note": "—"
      },
      {
        "label": "Total unrecoverable",
        "value": "≈$3,080/mo",
        "note": "$2,200/mo"
      }
    ],
    "context": "This is the '5% rule' logic popularised by Ben Felix: an owner's unrecoverable costs are roughly property tax (~1%) + maintenance (~1%) + cost of capital (~3%) ≈ 5% of value per year. If rent is below 5% of the price ÷ 12, renting is competitive.",
    "methodology": "Assumptions (all editable in the calculators): $420,000 home (≈2025 US median, NAR), 10% down, 6.5% 30-year fixed (Freddie Mac PMMS range), 3.5%/yr appreciation and rent growth (long-run FHFA HPI / CPI shelter), 1.1% property tax, 1% maintenance, $1,900/yr insurance, 3% buy and 6% sell costs, 6%/yr investment return. Excludes mortgage interest deduction, capital-gains tax and PMI.",
    "dateModified": "2026-10-01",
    "relatedCalculators": [
      {
        "label": "Rent vs Buy Net Worth Calculator",
        "to": "/rent-vs-buy-net-worth-calculator"
      },
      {
        "label": "Down Payment Opportunity Cost Calculator",
        "to": "/down-payment-opportunity-cost-calculator"
      }
    ],
    "relatedReading": [
      {
        "label": "The 5% rule explained",
        "to": "/answers/what-is-the-5-percent-rule-rent-vs-buy"
      }
    ]
  }
}