Are you a renter who is thinking it might be time to buy a home?
We can understand your sense of urgency. Homeownership is a valuable and meaningful goal, and you’re getting there. Right now, we want you to be aware of where the financials land and how the market might be making it more difficult to buy. Renters are in a much stronger position now than they have been in quite some time. Our advice? Leverage the current market conditions and keep saving for your home purchase for when the market begins to shift.
Here’s a look at the math that’s driving our recommendations to tenants in Johnson County, Kansas.
Takeaways:
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The Break-Even Goal: When Does the Home Purchase Become Worth the Money?
Here’s the essential question for any homebuyer: how long do you have to stay in the home you’ve bought in order to recoup what you’ve spent on it? We’re assuming you’ll spend what most homebuyers are spending now: between $300,000 and $400,000.
The answer right now? About 10 years.
That’s not even the point at which you’ll earn money off your investment. It’s going to take a decade just to break even. Let’s take a look at the numbers:
- We can estimate, based on 2025 data, that a home purchased now will have a median sale price close to $400,000, a mortgage rate between 6.3% and 6.7%, a tax of 1.7%, and 4% transaction costs.
- We’ll assume that this house appreciates at roughly 4% through the years, but it’s worth noting that this is a big assumption.
- Appreciation rates can vary significantly from year to year based on market factors. Look no further than the past five years for proof: Home prices climbed an average of 9.4% in 2020, 17.9% in 2021, 10.5% in 2022, 1.1% in 2023, and 4.5% in 2024, averaging 8.68% during this period.
- Still, assuming a home with a conservative annual appreciation rate of just under 4% and a down payment of 10%, it would take a homeowner 10 years or more to recoup their costs. Even if they double their down payment to 20%, it would take them eight years to reach their break-even point.
Our hot take, based on years of experience in the rental market and the real estate market? There are better times to buy.
Costs Associated with Buying vs. Renting
Why is it more financially smart to continue renting now?
Here are the things you don’t have to pay for.
- Down Payments
Not having a down payment is one of the most practical reasons to continue renting. Buying a home typically requires 10–20% upfront, which can easily translate into tens of thousands of dollars. In contrast, renting usually only requires a security deposit and first month’s rent; significantly less capital out of pocket.
- Maintenance and Repairs
Another advantage of renting is avoiding maintenance and repair costs. Homeowners are responsible for everything from roof leaks to appliance failures, which can be unpredictable and expensive. Renters, on the other hand, typically rely on the landlord to handle these issues, making monthly housing costs more predictable and easier to budget.
- Real Estate Taxes
Renting also allows you to avoid property taxes, which can be a significant and rising expense for homeowners. These taxes vary by location and often increase over time, impacting affordability. As a renter, those costs are not your direct responsibility, helping you maintain more predictable monthly expenses and better control over your budget.
- Decreasing Values
Renters have to worry about their rents going up, but they don’t have to worry about losing money on their real estate investment. Renters are insulated from the risk of declining property values. While homeowners may see their equity shrink during market downturns, renters can simply choose whether to stay or move. Even if rent increases occasionally, you’re not exposed to large financial losses tied to market fluctuations or long-term property depreciation.
Benefits to Renting in Johnson County Right Now
And here are some of the benefits to your status as a renter:
- Flexibility
Flexibility is one of the biggest advantages of renting. You can choose where to live based on lifestyle, commute, or changing priorities without the long-term commitment of ownership. Lease terms give you control over how long you stay, and when your needs change, it’s easier to relocate, downsize, or upsize. Whether your job shifts or your family grows, renting allows you to adapt quickly without the costs and delays of buying or selling a home.
- Access to Amenities
Renting often provides access to amenities that would be costly or impractical to own outright. Many rental communities include features like fitness centers, pools, co-working spaces, and maintained outdoor areas. These shared amenities enhance quality of life without requiring large upfront investments or ongoing maintenance costs. For renters, this means enjoying a higher standard of living and convenience, while avoiding the financial and time commitments that typically come with owning and maintaining similar features in a private home.
We support growing homeownership in our community. But, in today’s market, continuing to rent is often the more financially strategic choice. With high purchase prices, elevated interest rates, and substantial upfront costs, it can take up to a decade for a buyer to truly break even and recover their investment.
During that time, renters can preserve cash, avoid major expenses, and maintain flexibility as their needs evolve. Rather than tying up capital in a long-term commitment with uncertain returns, renting allows for smarter short-term financial positioning while you build savings, monitor market conditions, and wait for a more favorable opportunity to buy.
Interested in talking to us about what this means for your personal financial goals and the future of homeownership? We’d love to dive into the details based on your personal experience and present situation. Please contact us at Key Partners Property Management. We love working with tenants and with owners in Johnson County, Overland Park, and Olathe, Kansas.
