Is renting really “throwing money away”?
It’s the advice everyone in New York has heard: stop renting, start building equity. But when we looked at the actual numbers, the answer was more nuanced than the old rule of thumb suggests.
In the video above, we compare the true cost of renting vs. buying an apartment in NYC, using real data rather than gut feelings.
What we looked at
The full cost of owning: Mortgage payments are only part of it. Common charges, property taxes, maintenance, and closing costs add up fast.
The cost of renting: Rent is predictable, but it rises over time. We factored that in.
The opportunity cost: A down payment tied up in an apartment can’t be invested elsewhere. For many people, that matters.
The breakeven point: How long you’d need to stay for buying to come out ahead.
Why this matters if you have equity compensation
If you’re paid partly in RSUs or stock options, your income can be lumpy, and your wealth may already be concentrated in one company’s stock. That changes the rent-vs-buy math. A big down payment funded by vested shares has tax implications and affects your overall risk. This is a financial planning decision, not just a housing one.
The bottom line
Neither renting nor buying is automatically “right.” The better choice depends on how long you’ll stay, your cash flow, your tax situation, and what else your money could be doing.
