Renting vs. Buying

IAH
Aug 19
2 min read

When deciding whether to rent or buy isn’t just about comparing monthly payments. It’s about the bigger picture: your lifestyle, your financial goals, and where you see yourself in a few years.

When buying makes sense

You plan to stay put.

Most experts say it takes at least 5–7 years to make buying pay off once you factor in closing costs and moving expenses. If you see yourself putting down roots in Little Rock or North Little Rock for the long haul, buying could build equity instead of paying rent that doesn’t come back to you.

Your income is steady.

Owning a home means steady mortgage payments plus maintenance and the occasional surprise repair (like an AC unit that quits in the Arkansas heat). If your job and income are reliable, you’re better prepared to handle those costs.

You can afford the true cost

A good rule of thumb is to keep housing costs under 28% of your gross income. Even if a bank says you qualify for more, staying within that limit helps you live comfortably without being “house poor.”

When renting makes sense

You need flexibility.

Maybe your career could take you to Fayetteville or even out of state in a year or two. Renting keeps you mobile without the hassle of selling a home.
Your costs stay predictable.
Rent may rise occasionally, but you don’t have to budget for roof leaks, plumbing repairs, or property taxes. That’s your landlord’s responsibility.
You want to invest elsewhere.
If renting in Arkansas costs you \$1,000 less per month than owning, you could put that difference toward retirement or other investments that may grow faster than local real estate values.

A numbers example

Say renting in Little Rock costs \$2,000 a month and buying a comparable home costs \$3,000. If you invest the \$1,000 difference instead of putting it into a mortgage, and it grows at a 7% annual return, you’d have more than \$175,000 after 15 years. That’s the kind of long-term tradeoff worth thinking about.

Bottom line

Renting isn’t throwing money away. Buying isn’t always the smartest move. The right decision depends on your timeline, income, and goals. What matters most is being prepared—whether you’re thinking about signing a lease or starting the journey to homeownership.