Multimillionaire Tori Dunlap Says ‘Renting Is OK’ — Why She and Other Millionaires Choose To Rent Instead of Own
Written by
Nicole Symon
Edited by
Caitlyn Moorhead
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You often hear that homeownership is a key step on the path to long-term financial security and wealth.
After all, according to the Federal Reserve System, homeowners have a median net worth that’s nearly 40 times greater than a renter’s. However, buying a home isn’t always the best option, and it doesn’t guarantee financial success.
Multimillionaire Tori Dunlap, founder of Her First $100K, explained her decision to rent instead of buying a home in a reel on her Instagram. She can afford to buy a home but chooses not to for reasons that may also apply to your situation — even if you’re not a multimillionaire.
Here’s a breakdown of Dunlap’s perspective on renting versus owning a home.
Renting May Be Less Expensive Than Owning
Dunlap currently rents a home in North Seattle, an expensive area where home prices average close to $900,000. If she were to purchase a similar home in that area, her monthly housing costs would go up instead of down.
There’s a misconception that owning a home is always cheaper than renting, but that’s simply not true. Newsweek reports that nationwide, the monthly cost of owning a home is 37% higher than it is for renting an equivalent living space. In major cities, the cost discrepancy is even greater.
People often compare rent to monthly mortgage payments when they’re deciding between renting and buying a home. In this comparison, owning may seem cheaper, but only because the mortgage payment doesn’t accurately reflect your total monthly housing costs as a homeowner. Homeowners also need to consider insurance, property taxes, repairs and more.
Before you decide between owning and renting, make sure you understand your expenses in both scenarios. You can make an informed decision only if you know each option’s costs and possible complications.
Renting Comes With Certain Luxuries
Dunlap also prefers renting because it offers more flexibility and peace of mind. She isn’t committed to a particular location beyond the end date of her lease. She doesn’t have to worry about home maintenance, because that’s the landlord’s responsibility. These are things that are important to her.
“In 2021, I actually packed up my entire apartment, ended my lease and traveled and lived out of a suitcase for eight months,” she said in an interview with Business Insider.
That was possible only because she didn’t have the responsibilities a homeowner would have. When you own a home, you’re generally responsible for all of the upkeep and management of your property. If you don’t want the stress or time commitment of handling those things yourself, renting might be the better option.
How To Decide Between Renting and Buying
To help you determine whether buying a home is the right choice, Dunlap recommends considering these three questions:
- Do you want to own a home, or is it just something you think you should do?
- What will your total cost of homeownership be?
- If you’re going to take out a mortgage to buy a home, how strong is your credit score?
You shouldn’t buy a home just because it seems like “the right thing” or a “smart investment.”
“I have friends who have moved a half hour outside the city and ended up selling their houses a year later because they couldn’t see any friends or have their social community anymore,” said Dunlap. It turned out that homeownership was incompatible with their preferred lifestyle.
If you don’t have strong credit, it’s worth working on your credit score before buying a home to get a better mortgage rate. Even a slightly lower rate can save you thousands of dollars over the life of your loan.
Renting or buying is a personal decision, and these three questions may help you reach a more informed decision.
Dunlap also noted that renting is a choice for her, but it isn’t for everyone. Many people have to rent because homeownership is inaccessible. She mentioned the student debt crisis, a lack of paid family leave and minimum wages that haven’t kept up with the cost of living as obstacles to buying real estate.
Before you buy, make sure homeownership supports your long-term goals and your lifestyle.
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