Should You Rent or Buy Right Now? This Money Expert Says Only One Is the ‘Superior Option’
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Laura Beck
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Molly Sullivan
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The rent versus buy debate usually has predictable answers. Real estate agents tell you to buy. Landlords want you to rent. But when a successful real estate investor says renting is the better choice right now, you should probably listen.
Graham Stephan, who built his wealth through real estate investing, dropped a bombshell during a recent conversation with financial expert George Kamel. Despite owning multiple properties himself, Stephan thinks most people should be renting instead of buying in today’s market.
Here’s how he broke it down.
The Numbers Don’t Lie About Today’s Market
Stephan approaches the rent versus buy decision like an engineer solving a problem. He looks at the actual costs of buying versus renting, factors in opportunity costs and adds a premium for the flexibility that renting provides.
“When I look at the cost of buying versus renting, to me, it’s just the cost seems to make the most sense renting, unless you’re planning to live there long-term and you’re planning to put down roots or it’s an emotional decision,” Stephan explained.
This isn’t coming from someone who hates homeownership. Stephan has made millions in real estate. But he’s also honest about what the current market actually looks like for regular buyers.
The math has shifted dramatically since 2020. Markets that used to favor buying now heavily favor renting when you crunch the numbers objectively.
Why a Real Estate Investor Stopped Buying
Perhaps the most telling part of Stephan’s analysis is his personal behavior. Despite his real estate expertise and access to deals, he hasn’t bought any property since 2020.
“Not since 2020. 2020 was the last time I bought real estate,” Stephan said when asked about his recent purchase. This speaks volumes about his assessment of current market conditions.
Stephan explained that he looks at potential deals daily but can’t find anything that makes financial sense. The opportunities that built his wealth simply don’t exist in today’s market for most buyers.
The Markets Where Buying Makes Even Less Sense
Stephan pointed out that some previously hot markets have seen significant corrections, but that doesn’t necessarily mean they’re good buying opportunities now.
“You have places like Austin that are down 20%, 25% for the peak. You have places in Florida, Miami got hit pretty hard, but those areas also went up so much,” he explained.
Even with these price drops, the fundamentals still don’t work for most buyers. The hyped markets are becoming less hyped, but every other market remains relatively expensive compared to renting.
This creates a situation where very few opportunities make sense when you run the numbers objectively.
The Long-Term Exception to the Renting Rule
Stephan isn’t completely anti-buying. He acknowledged that homeownership can make sense under specific circumstances.
If you’re planning to live in the same place for 20 to 30 years, the math starts to shift in favor of buying. The longer timeline allows you to absorb the transaction costs and benefit from potential appreciation.
“If I’m planning to be in this house for 20 or 30 years, I’m probably going to buy. But if I say, well, I know I’m going to be here for five to 10 years. The cost of renting is this. The cost of owning is this,” Stephan said.
He also factors in the opportunity cost of the down payment and the premium you pay for being stuck in an illiquid asset when you can’t freely move.
The Golden Handcuffs Problem
One of the most interesting points Stephan raised involves people who bought homes with ultra-low interest rates during the pandemic. These homeowners are now trapped by their own good fortune.
Many people who planned for their current house to be a starter home now can’t afford to move because they’d have to give up a 2.6% mortgage rate for something much higher.
This creates what economists call “golden handcuffs;” you’re stuck in a situation that looks good on paper but limits your flexibility and life choices.
Why Flexibility Has Value
Stephan places a premium on flexibility that most people don’t factor into their housing decisions. When you own a home, you’re locked into that location and responsible for all maintenance and repairs.
Renting allows you to move for better job opportunities, change neighborhoods if your needs shift or avoid the headaches of property maintenance. In today’s rapidly changing economy, that flexibility absolutely has financial value.
This is especially important for younger people whose careers and life situations are probably going to change over the next decade.
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