I Found a City Where It Makes Sense to BUY (finally)

👉🏻 The TL;DR (5 minute read):

We’re back with another installation of the Rent vs Buy series and this week I am breaking down 3 new cities: San Diego, Austin, and the Hudson Valley!

In this newsletter I’ll be breaking down the math for Austin (spoiler alert: makes sense to buy) and if you want the juice on the other two, check out my latest youtube video!

🚨 BTW - it’s the last day of September! DON’T FORGET to work through your Monthly Money Review!! I don’t have a budget update this month because I am traveling but you can watch prior monthly reviews here.

And if you need a tool to use, check out the Personal Finance Dashboard or the Basic Budgeting Template! 

MONEY
The Math on Renting vs. Buying in Austin, TX

It’s no secret that buying a house in 2025 is ridiculously expensive.

Between sky-high interest rates, over-inflated prices, and continuously rising insurance and maintenance costs, the American dream of homeownership feels out of reach for most.

I’ve been running the math so you don’t have to - and so far, in most places I’ve looked, the argument for buying is pretty (financially) weak.

But alas - I found a city where it may make more sense to buy. And of course, it’s in Texas.

So let’s run the rent vs. buy math for Austin, TX!

As a reminder, a few important things to remember:

• This conversation is extremely nuanced

• Circumstance MATTERS - as does life stage

• It is usually more expensive to buy in the short-term

If you want to run the math on your own circumstance, check out my Rent vs. Buy Calculator!

The Case for Buying in Austin

I chose this house to evaluate for purchase in Austin. It’s about 1,200 square feet, 2 bedrooms, and recently built so it feels modern and fresh.

These are the assumptions I am making:

• 20% down on a $599K purchase price = $120K

• 5.9% rate on a 30 year mortgage

• 1.4% property taxes (from the Zillow listing)

• $2,400 annual home insurance (from the Zillow listing)

• 1% of the purchase price annually for maintenance

This brings the total monthly all-in payment to $4,214 or $50,571 in total each year (assuming we hold everything constant which is unlikely)

The Rental Comparison

I actually found the rental market in Austin to be pretty promising. Granted, I’ve never lived there and have only been to Lake Travis (not the city). But it felt like there were A LOT of very affordable options and you can get a lot of space.

I chose this house to compare it to - it’s in the same neighborhood, and it’s actually a little bit bigger but it felt like a comparable space to me.

I am assuming that rent increases 3% each year for 30 years, and that renters insurance is $300 annually.

Now Let’s Look at the Math

After 30 years, the math is pretty clear:

You spent $1.6M all in on the purchase, vs. about $2.0M to rent. So point blank it costs less to buy over time.

What I found interesting though was that it was still more expensive to buy for the first 8 years. If you invested that difference and let it cook for the next 22 years - your portfolio would reach about $1.1M - which is not chump change by any means, but if you have the opportunity to build equity in real estate AND continue to invest, then it’s worth considering.

What this tells us though is that if you ARE going to buy, from a financial standpoint you want to make sure it’s in a place you plan to stay!

Take a Closer Look at the Details

I dove into this a bit deeper, as well as ran the numbers on San Diego and in the Hudson Valley of New York on my youtube video this week! If you have (polite) thoughts or opinions, I’d love to hear from you!

💸 If you want to run the numbers for yourself, check out the Rent vs. Buy Calculator

💡 Not sure how much you can afford to spend on housing? Start by tracking your numbers in a tool like the Personal Finance Dashboard!

WEEKLY RECOMMENDATION

Your Worry-Free Spending Limit: This “0.01% rule” states that if you are torn about making a spending decision, if the amount of money at state is less than 0.01% of your net worth, don’t worry about it. The WSJ asked readers to share what their “worry free” spending limit was and honestly the answers surprised me!

RESOURCES
What’s Happening This Week at Break Your Budget

• This week on Don’t Depend on Daddy: We’re chatting about why your 20s are for testing and your 30s are for building. Enough with the pressure to figure out your entire life at 25! I’m SICK OF IT!! Enjoy your life, stop rushing milestones, and remember you have time ❤️ Just be responsible with it!

• More Rent vs. Buy Comparisons: If you enjoyed this newsletter and like analyzing the math on renting vs. buying, check out this week’s youtube video! Join the conversation and let me know if there’s a city or area you’d like for me to evaluate next.

LOOKING FOR MORE?
Check out ALL of my Money & Career Resources!

• Read by books, Own Your Money and Own Your Career!

• Take your financial power back with The Personal Finance Dashboard, my comprehensive money management tool!

• Up-level your career and get promoted with the Own Your Career Template!

• Just getting started on your financial journey? Check out the Basic Budgeting Template!

• Learn exactly how to put together a plan for your finances with the 4-Week Financial Plan!