E3 - Does Renting or Buying Make More Sense in 2025?

Is buying a home always the ultimate financial milestone—or does renting sometimes make more sense?

In this episode of Before the Returns, Jaden Zubal breaks down the numbers and the emotions behind one of the most common money debates: renting versus buying. Using a real Utah example, we compare a 10-year renting scenario with buying the same home—and then add a third option: renting while investing the difference.

Episode Supporting Materials - https://bit.ly/4pLcoUB

💡 You’ll learn:

• Why the “American Dream” of homeownership became so ingrained in our culture
• The real 10-year costs of renting vs. buying a $750,000 home
• How equity growth changes the math for buyers
• Why a disciplined renter who invests the difference can actually come out ahead
• The broader lesson: success isn’t about rent or buy—it’s about the structure around your money

🔑 Quick takeaway: The house itself won’t make you wealthy. The structure you build around your money will.

Learn more at www.jadenzubal.com | Follow @jadenzubal | Join the *Before the Returns Weekly* newsletter

📩 Questions or ideas? Email: jadenzubal.wealth@gmail.com

⚖️ Disclaimer: This podcast is for educational purposes only. It is not financial, tax, or legal advice. Always consult with a qualified professional before making financial decisions.

Chapters

• 0:00 Episode 3 - Part 1 Does Renting or Buying Make More Sense in 2025? (Educational Breakdown)
• 1:38 Renting vs. Buying: Emotional and Mathematical Perspectives
• 2:58 Challenging the 'Buying is Success' Belief
• 5:28 The True Cost of Buying a Home
• 8:58 Comparing Investment Outcomes
• 11:58 Personal Experience & Broader Lessons
• 14:58 Conclusion: Structure Over Ownership

Transcript

Episode 3 - Part 1 Does Renting or Buying Make More Sense in 2025? (Educational Breakdown)

 [00:00:00] Hello and welcome to Before the Returns, the podcast where we discuss how money is not the goal. But purpose is the goal. I'm your host, Jaden Zubal. Um, like we've talked about in the past two episodes, what matters most isn't the return you hope for, it's the structure you put around your money.

Today we're gonna spend some time and talk about the idea of renting versus buying. This is a conversation I hear. Frequently from clients, friends just everywhere. I hear it multiple times a week. I've personally spent quite a bit of time considering this idea, listened to dozens of different proponents on both sides of the fence here.

So let's start with a little bit [00:01:00] of cultural background . Here in the United States of America it is. Pretty consistent that the American dream is to own a home and have that home be the place for your family, your friends, everybody to gather, right?

Whenever you think about the American dream and what that really is, it typically involves. Some form of , home ownership, and I certainly understand that. I agree with it. I've, my, I've spent my entire life with that same concept and that same idea in my head. And in all fairness to all of you out there, you know, when I 

Renting vs. Buying: Emotional and Mathematical Perspectives

think about.

Strategy financially there. There's really two aspects to it that I think are really important. You have the mathematical side of financial strategy, and then you have the emotional side of financial strategy. So today I'm gonna try to touch on both of those things. And come to some sort of general [00:02:00] consensus of when renting is better and when buying is better.

Okay. Because I think there is an argument to be made for both sides here. And again, I say that with the perspective of somebody who has invested in real estate now for a decade. I've owned homes that I've lived in, I've also rented in homes while I own homes that other people live in. So. There is certainly an argument to be made for both sides.

Now, where does this idea though of the American dream come from? Why is it so important that we all own the homes that we live in? Well after World War II? The GI Bill made home loans more accessible for returning soldiers. Combine that with suburban development and government incentives and home ownership quickly became the centerpiece of the American dream.

Owning a home wasn't just about shelter anymore. It became a symbol of stability, 

Challenging the 'Buying is Success' Belief

success, [00:03:00] and adulthood. So the idea was, and we've probably all heard this, but renting equals throwing your money away right now. That belief that buying a home is the ultimate mark of success, still shapes how we think about money today.

But when we actually run the numbers, the story looks a little bit different. And especially given the times that we're in today. So economically the, the, let's just say the overall economy that we live in today is a little bit different than it was four or five years ago, right? Buying a home four or five years ago looked significantly different than it does today.

Okay, so is buying a home really the ultimate mark of success, or is that fulfilling more of the emotional side of the strategy and not always fulfilling the mathematical side Now? For this comparison, we're really gonna just look at today [00:04:00] and the environment that we're in today, right? If I were to do this five years ago, it would be a little bit of a different answer, and probably five years from now it's going to be a little bit different as well.

So it's really important to, um, look at your numbers and where you're at, uh, in the current environment before you make these kinds of decisions. I'm gonna try and keep this as straightforward and simple as possible while also being accurate with the details. And I'll make sure to link all of this either in the show notes, provide some sort of PDF download, something that, um, can give you the details of this example.

Alright, let's take a look at this here. So, if we had, using Utah where I'm at a typical five bedroom, three bathroom house, and you were to rent that, let's say that rent in year one started at $2,800 a month, and I'll assume that the rent goes up every year, just to be fair. So you're getting an increased rent expense each year, and we'll look at a 10 year comparison.

So by the time you get to the end of that 10 [00:05:00] years, you would be paying a little under $3,700 a month. Now, if we did that, we'd pay around $385,000 in rent over a 10 year period. So that's a big expense, right? $385,000 out the door. In 10 years. Now, let's compare that though, to buying the same home. So that five bedroom, three bathroom house here in Utah, it's probably valued 

The True Cost of Buying a Home

around $750,000.

Okay? There's gonna be a lot of fluctuation in that, depending on the area that you buy in, depending on how new the home is, the upgrades, all that kind of stuff. But for the sake of this comparison, it's probably around 750,000. Let's assume you put in a 10% down payment. So $75,000 goes in right outta the gate.

We won't even include closing costs. All of the extras in this comparison here, uh. Now your mortgage payment, if [00:06:00] you had a $675,000 mortgage, so after your down payment at 6.5%, which is pretty close to today's rates before principal and interest would be around 4.266 a month. If you take into account your taxes, um, your interest, your maintenance, you know, all of the, the things that we should be paying attention to.

Probably budgeting more for around $5,300 a month. Okay, good majority of that is the actual princip principle. Interest, taxes, and insurance. But then I budgeted a few hundred dollars a month in there for maintenance to take care of the property since you own it. On average, people are spending at least a couple hundred dollars a month between things they wanna do to their home just for upgrades and changes and little things here and there, or actual maintenance, maintenance expenses that do come up over time.

So over 10 years, you'd have roughly [00:07:00] $639,000 in expenses for that home. Plus you put 75,000 in upfront. So you will have spent around 714,000. Now that covers everything, right? That's your down payment, that's your actual mortgage expense. Um, that's maintenance, budgeting. Hopefully that's enough for all your maintenance.

Uh, again, I tried to be really conservative with these numbers here. And then it also includes your property taxes and your insurance. Okay. So on the surface, buying costs almost twice as much as renting in that first decade. And towards the end of the episode, I'm gonna, I'm gonna recap a few things here and it, it's really important to remember this is a 10 year window that we're looking at.

Okay? So next we need to look at. That that was oversimplified, right? So now we need to remember when you buy a home, you also have equity growth, meaning your home goes up in value over [00:08:00] time, and you're also paying the mortgage down. Okay, so you're kind of getting equity in two different ways. Now I made again some big assumptions here.

So if we assume that homes in Utah have appreciated around 5% per year, and they continue to do that over the next 10 years, that $750,000 house that you bought will be worth around 1.2 million in 10 years. Okay? Mortgage Balance after 10 years. Maybe right around 5 75. So you've paid a good chunk of that down.

Which means you have now $647,000 in equity, okay? So your net cost would be the 714 that you spent minus the 647,000 in equity. So you have a cost. Over that 10 year period of $69,000. So direct comparison to 

Comparing Investment Outcomes

buying versus renting. [00:09:00] In that example, if you did it for 10 years, you will spend on the rental 385,000, give or take on the purchase 69,000.

Okay, so that looks pretty good for buying a home. But again, we are still leaving part of the picture out here. This is where. We start to look at, okay, as a business owner, as an investor, as somebody who wants to invest and wants to grow their wealth. Now we're gonna look outside of the emotional aspect of owning a home, and we're gonna look at, well, what if we were to take the 75,000 that we put down on our home and take the difference between the 2,800 we were paying in rent and the 5,300, give or take a few dollars there on your home expenses.

What if we were to take that difference and invest it? Okay, so if we do [00:10:00] that now we have, again, 75,000 initially invested, and I said that we would invest this and get an 8% return. So pretty conservative actually, when you look at almost anywhere that you could invest your money, that grows to $162,000.

Over the same 10 year period. Now we also have what we are saving between our home expenses and our rent expenses. Okay? So the difference is $2,530 in year one, meaning $2,500 per month for that first year. And then that, that difference, um, starts to shrink a little bit because I assumed our rent is increasing, right?

And your mortgage payment shouldn't. Really increase much other than changes in taxes and things like that. So investing that month, that monthly savings at 8% grows to 402,000 over the same 10 years. So your total in investment return [00:11:00] there is $564,000. And again, this is assume assuming an 8% return, subtract the rent that we paid.

And the renter now ends up with a net positive of $179,000. So what's our takeaway from this? And again, I hope this wasn't over complicated. It's, it's really intended to just show we hear people all the time talk about how renting is better or buying is better, but there's never any real detail behind it.

Right. I'm trying to give just enough detail here. That we can see it, it really does depend on the scenario. Um, because in the, on that high level surface picture, it looked like buying was a lot better. But then when we dive into this a little bit, um, essentially what it comes down to is if the renter is disciplined and invest the difference.

They actually can come out more than $240,000 ahead of the homeowner after 10 years, right? Because the homeowner was negative $69,000. 

Personal Experience & Broader Lessons

Still [00:12:00] the renter was positive, $179,000. Over that 10 year period, and again, let's tie back into the 10 years now. So if you plan to live in that home for more like 20 or 30 years, you might start to see some bigger advantages with the home ownership.

But even at that, if you're a disciplined renter, you may actually do better across the board as a renter. So. Let me give some additional story and context to this. I personally rent the home that I live in currently because this example that I just shared is very, very close to the example of what put me as a renter today.

Two years ago, I was living in a home that I owned. I chose to sell that and I have since acquired four other rental properties. That we have rented out. So I'm still getting the benefits of home ownership from the aspect of those properties do appreciate. Um, but I [00:13:00] also take in rent and so there's a little bit of income from that as well.

Right now, the rent that I pay allows me to live in a home that fits my lifestyle, accommodates my family well and. I'm paying close to half for my rent as I would be for the mortgage payment because of the environment that we're in, right? So broader lesson here is that renting isn't failure. Buying is also not guaranteed success.

It's not really about where your money goes, but it's it's more about the structure behind it and what you're going to do, right? It's the same idea as how. Um, if any of you have ever listened to, like Dave Ramsey for example, there's a lot of things that I don't agree with about what Dave Ramsey says.

But there are some things that that do make sense, and that can even be applied to some of what we'll talk about here. Well. One of the things that I don't necessarily agree with is when he says, buy term and invest the [00:14:00] difference. However, if we take that, that idea and that concept, and we turn it into what we're talking about here, we could say rent and invest the difference, right?

Because I'll get into this in a future episode, but I think of term insurance as renting your insurance. That's what you're doing there. Right. And there's a time and a place for that. There's a time to rent your insurance. There's a time to spend money on that because it fulfills the emotional need, even though there's, there's something you're missing out on there from a mathematical standpoint.

So now in this broader concept of real estate, really what we're looking at is when you rent, you can now invest the difference between. What you would've been paying for a mortgage and what you're paying for rent, right? Just as we saw in this example. And you can typically get a little bit better return and a little bit better outcome, but it does require some strategy and some discipline, right?

It's 

Conclusion: Structure Over Ownership

not just gonna happen all by [00:15:00] itself. So to kind wrap up this, this episode and this conversation, uh, you know, in the coming weeks and the coming episodes. I'll get into some of that backend structure, some of what I call family banking which is really one of the clearest ways I found to cont to create control, purpose and structure with money.

Just like we saw in the episode today, the house itself won't make you wealthy. It's the structure you build around your money that will, okay, so. Money is not the goal. Purpose is the goal. If this helped you think differently about renting versus buying, share it with a friend or leave a quick review, it means a lot to us.

It helps grow this channel, grow and expand what we're trying to do here and the message that I'm hoping to give to to our listeners. So with that, thank you so much for joining and we'll see you on next week's [00:16:00] episode.