A Rent vs Buy Comparison for Kids and Teens
This video performs a rent vs buy comparison in a simple, concise way for kids and beginners. It could be used by kids & teens to learn about renting vs buying, or used as a money & personal finance resource by parents and teachers as part of a Financial Literacy course or K-12 curriculum.
Suitable for students from grade levels:
- Elementary School
- Middle School
- High School
The topics covered are:
- Should you rent or buy a home
- When is renting a house the right choice
- When is buying a home the right choice
Should you buy a home or rent it?
There is no right answer – there are pros and cons to both.
Renting has minimal upfront costs, no hassle of maintenance, and gives the freedom to move easily if needed.
But you don’t build any home equity, cannot make home improvements, and run the risk of rent increasing over time.
Buying lets you build home equity, allows you to make any changes you like, provides a sense of stability and pride, and helps build strong community ties.
But it comes with high upfront and recurring costs, responsibility of all repairs and maintenance, and a long-term commitment.
The decision ultimately depends on your financial situation as well as personal circumstances.
Renting or Buying: When is renting a house the right choice?
Renting is often considered a waste of money as you are making monthly payments but not owning a property. But renting can actually be a great option.
If you are someone in your 20s, who has just started working and is not ready to “settle down”, renting gives you the freedom and flexibility to move around and even try different neighborhoods where you can’t afford to buy a home.
Renting can give you a lot of peace of mind if your job requires constant relocation, your job is unstable, you have moved into a new city, you are paying off other debt, you are in the process of building a good credit history or you are saving up for a down payment.
As a rule of thumb, if you don’t plan to stay in the home for at least the next 5 years, it’s better to rent.
Rent vs Buy: When is buying a home the right choice?
Buying a home is often what everyone dreams about. It gives pride of ownership, and brings a sense of stability.
It’s a place where you can put down roots, design and decorate the way you want, and stay for as long as you’d like. It also builds equity and long-term wealth, which can be passed on to your kids through your will.
But it’s a major decision that is as much financial as it is emotional. It shouldn’t be taken lightly, as it can impact your financial health, lifestyle and personal goals for years to come.
In general, if you’re starting a family, have a good stable income, can afford a down payment, and want to settle down in one place for a long time, then buying a home is probably right for you.