Shawn Realtor Guy here from Portland, Oregon. With over 18 years in the business, I’ve seen my fair share of rent vs. buy debates. Today, I want to dive into something that’s been bugging me: most online rent vs. buy calculators are flat-out wrong—or at least incomplete.
They miss the one crucial number that lets you compare apples to apples. In this post, I’ll break it down using real numbers from one of my current listings, explain why owning isn’t always the slam-dunk it’s made out to be, and share my personal opinion on when renting makes sense. Let’s get into it.
The Problem with Standard Rent vs. Buy Calculators
Picture this: You’re eyeing a $460,000 home in Milwaukie, Oregon (yep, that’s one of my active listings right now). You plug the details into a typical online calculator—10% down payment, current property taxes, and all. On the renting side, it spits out an estimated $2,400 monthly rent. Factoring in a modest 2.5% annual increase over five years, your total outlay comes to about $151,382. That’s straightforward enough.
Now, switch to the owning scenario. The calculator shows a monthly payment of $3,681 (including property taxes) and highlights things like principal reduction ($26,450 over five years) and home appreciation (assuming 3.5% annually, totaling $86,336 in equity gain). It even combines these into a net “benefit” of $158,786 in green, making owning look like a winner. But here’s the kicker—and the reason I felt compelled to write this: Where’s the total payment over those five years for owning? It’s nowhere to be found. That $3,681 monthly? Multiply it by 12 months and then by 5 years, and you’re looking at $220,860 in actual payments. Add in your $46,000 down payment (that’s your cash upfront), and the real total spent is $266,860. As a realtor, I’m a bit embarrassed by how deceptive this feels. Consumers deserve to see the full picture right up front. These calculators gloss over the massive interest costs and the opportunity cost of that down payment. Interest alone is expensive, but without showing the cumulative spend, it’s hard to make a fair comparison. So, let’s fix that and run the numbers properly.
Apples-to-Apples: Comparing Total Costs Over 5 Years
Using the same $460,000 home:
- Renting: $2,400/month starting, with 2.5% annual hikes. Total over 5 years: $151,382. That’s money gone—poof, down the drain, as some say. But here’s the upside: No big upfront cash, and you free up about $1,300/month compared to owning (the difference between $3,681 and $2,400).
- Owning: Monthly payments total $220,860 over 5 years, plus $46,000 down = $266,860 outlay. Now, subtract the equity gains:
- Home appreciation (3.5% avg.): $86,336
- Principal paydown: $26,450
- Net equity benefit: $112,786
- Adjusted net cost: $266,860 – $112,786 = $154,074
See that? It’s basically a wash—$151,382 for renting vs. $154,074 net for owning in 5 years. If you’re disciplined and invest that $1,300 monthly difference (say, in the S&P 500 or another opportunity), renting could put you ahead in the short term. Think about it: That savings could go toward stocks, a business, or anything with better returns than real estate if you’re more comfortable in those markets. Of course, appreciation isn’t guaranteed. We’re assuming 3.5% based on historical averages, but 2026 could bring flat or even negative growth. No one has a crystal ball.
When Renting Wins (And When Owning Pulls Ahead)
Based on these numbers in our current 6% interest rate environment:
- Under 5 years: Renting is appears to be better (in the current 6% mortgage rate environment), especially if you’re not planning to stay put or deal with being a landlord after moving away from the city. The high monthly payments and upfront costs for owning don’t have time to pay off through appreciation and principal reduction. Plus, that opportunity cost of your down payment being taken.
- 5 years: It’s a break-even point. Not clearly better either way, unless you invest the rent savings wisely.
- Over 5 years (6+): Owning starts to shine. You’ll build more equity—appreciation compounds, and principal paydown accelerates. In years 6-8, you’d likely recoup more of your spend through asset growth. The longer you hold, the better it gets.
One more variable: Interest rates. If rates drop by 1% next year (fingers crossed), you could refinance and save around $370/month, dropping your payment to about $3,200. That could tip the scales, making owning look better even at the 4-year mark. But again, no guarantees.
The Bigger Picture: Inflation, Fixed Rates, and Long-Term Wins
Renting has its downsides too. Rents tend to rise over time—property taxes, insurance, and demand keep pushing them up. Even with potential dips in population or immigration, the U.S. remains a hot spot, and I don’t see rents plummeting. We’ve seen 10-15% jumps in recent years; expect steady increases.
Owning, on the other hand, locks in that 30-year fixed rate. Inflation works in your favor here. Today’s $3,681 payment? In 10 years, it’ll likely feel like less spent. Think about it: A high-end laptop costs $4,000 now, but in a decade, similar specs might run $6,000-$7,000 due to inflation. Your fixed mortgage stays the same, effectively getting “cheaper” over time. This is why homeownership is one of the best leverages for everyday folks like us. It’s not just an expense—it’s an asset that builds wealth, hedges against inflation, and offers stability.
My Final Thoughts as a Realtor
I’ve crunched these numbers myself, and it’s eye-opening how high rates make renting viable in the short term. Don’t buy into the “buying is always better” myth—run your own calculations. Always factor in the full owning payments: monthly mortgage x 12 x years planned to stay. Compare that to rent totals, subtract equity gains, and consider what you’d do with the savings. If you’re in the Portland, Oregon market and weighing rent vs. buy, hit me up. Call or text me at 503-515-4499 for a free 20-minute consultation. I’ll customize these numbers to your situation—no strings attached. Thanks for reading! If this helped clarify things, drop a like, share your thoughts in the comments, and subscribe for more real estate insights. Have a great day—see you next time.
Shawn Realty 