Rent vs Buy 2026: Does Renting and Investing Build More Wealth?

Does renting and investing beat buying in 2026?

For many households, the honest answer is: it can, but only if the renter actually invests the savings, month after month, for decades. That is the core argument in a recent video from Michael Bordenaro Clips, which claims that a disciplined renter can finish roughly even with, or ahead of, a homeowner at retirement age.

The reasoning is simple. In most large metros, renting a comparable home costs less than owning it. If the gap goes into stocks instead of vanishing into lifestyle spending, it can compound into a large portfolio. The creator's own example shows a buyer and a renter both reaching about $1.1 million at age 65. That is a tie, not a rout, and the details matter a great deal.

Below, we lay out the numbers from the video, test the assumptions and explain who the strategy suits. This is general information, not personal financial advice.

The numbers the argument rests on

Bordenaro leans on a handful of figures. Some come from public sources, others are his own assumptions.

The rent-versus-buy comparison comes from Realtor.com research, which regularly tracks the cost of renting versus buying a starter home. The gap in the video works out to roughly $930 to $1,000 a month, which the creator rounds to $1,000. Local conditions matter: the video says renting is cheaper in all 50 of the largest metros, but your own city may differ, and the gap shifts as rates and rents move.

The stock-versus-housing comparison also deserves context. A 3.7% annual gain in the national median sale price and an 8.3% annualized total return for the S&P 500 are not like-for-like measures. Median sale prices can shift with the mix of homes sold, and stock returns assume dividends are reinvested and no money is withdrawn.

The 30-year example, step by step

The video builds a scenario around a 35-year-old and a $340,000 starter home.

The buyer. Puts 10% down and pays about $2,600 a month, covering a 30-year mortgage at 6%, property taxes, insurance and maintenance. If the home appreciates 4% a year, it would be worth about $1.1 million at age 65 and fully paid off. Bordenaro calls 4% generous, noting that many markets are seeing flat or falling prices and that inflation has outpaced gains in some places. The arithmetic checks out: $340,000 growing at 4% for 30 years lands a little above $1.1 million.

The renter. Pays $1,670 a month, with rent rising 3% a year, and invests the monthly difference, about $1,000 in year one. At an 8% average annual return, the creator says the portfolio would reach about $1.13 million by 65. He adds that real-world long-run returns have been closer to 10% to 12%, so the result could be larger.

His conclusion: the two end up in a similar place on paper, but the renter holds liquid investments while the owner holds a house. He also argues that a "paid-off" home is not free, because property taxes, insurance and repairs continue for as long as you own it.

Why the creator thinks equity is harder to build now

Bordenaro makes a second argument: the old case for homeownership has weakened. Entry prices are high, he says, and even the strongest markets are seeing annual price gains of about 5% to 6%, down from 10% to 13% earlier. If gains slide to 2% or 3% and then 1%, he argues, owners lose ground to inflation.

He also challenges the idea of a home as a "forced savings account." Historically, that was the safety net for people who never invested otherwise. With slower appreciation and higher carrying costs, he argues, the safety net is thinner.

On the broader market, he says housing has been in a prolonged slump since 2022 and describes it as the longest downturn he has seen. That is his characterization, and national indexes differ in how they measure it. For related data, see our reporting on falling homebuyer demand and seller price cuts and the rise in underwater mortgages in some states.

What "smart renters" actually do

The video stresses that this is not a passive strategy. It describes several habits:

• Rent below your means. One couple deliberately chose a cheaper, smaller or older place than they could have afforded, so they could invest more.
• Negotiate. When local rents are soft, successful renters ask landlords for reductions and are willing to move if the landlord refuses.
• Start early. Compounding rewards time. A young renter who invests from the start has decades of growth working for them.
• Invest at least $500 a month. Bordenaro sets this as a rough benchmark. Saving less can still help, he says, but may not out-build a homeowner.
• Hold through downturns. The strategy fails if the renter pulls money out when markets fall.

He also shares an example of financial planners who budgeted about $6,000 a month for a roughly $940,000 purchase, lost bidding wars and found homes needing work. They chose to keep renting and redirected cash to a college savings account, retirement accounts, a brokerage portfolio, new furniture and cash reserves. Their stated goal was to be financially sound whether they own or not.

Where the argument gets weaker

A fair reading needs some counterpoints. Several are acknowledged by the creator; others are worth adding.

Discipline is the whole game. A mortgage is a mandatory monthly investment. A renter's investment is optional, and behavioral research and common experience suggest many people spend the gap instead. Bordenaro admits this is why traditional advice favors buying.

Leverage changes the math. The buyer in the example controls a $340,000 asset with $34,000 down. A 4% gain on the full home value is a much bigger return on the down payment than the headline appreciation rate suggests. A fuller comparison would also let the renter invest that $34,000 and closing costs, which tilts toward renting. The video's simple version does not model either side of this precisely.

Costs rise for renters, too. Rent increases are unpredictable, while a fixed-rate mortgage payment on principal and interest does not change. Taxes, insurance and upkeep do rise for owners, as the creator notes, but the core payment stays put.

Taxes and housing stability. Homeowners may benefit from tax rules, including the federal exclusion of up to $250,000 of gain on a primary-residence sale ($500,000 for married couples filing jointly) when requirements are met, per the IRS. See also our look at proposals to expand that break. Owners also gain control over their space and protection from landlord decisions.

Past returns are not a promise. Stocks have outperformed housing over long stretches, but they can fall sharply and stay down. An 8% average does not arrive as a smooth 8% every year.

Retirement housing risk. The renter still needs somewhere to live at 65 and beyond, and rent may keep rising. The video's point that home equity can be "trapped" is fair, though owners can also downsize or use options like reverse mortgages, which carry their own costs and rules.

What this means for you

If you are a prospective buyer. Compare your all-in monthly ownership cost (mortgage, taxes, insurance, a realistic maintenance budget of your own) to local rent. If the gap is large and you are unsure about staying five to seven years or more, renting while investing deserves serious consideration. If you plan to stay long and can afford both the home and retirement saving, doing both is often the strongest outcome. Check current rates through Freddie Mac's Primary Mortgage Market Survey, and see why rates matter in our piece on why the housing market is frozen.

If you are a renter. The strategy only works if the savings are automated. Set up automatic contributions to retirement accounts and a diversified brokerage account on the day rent is paid, before the money can be spent. Consider negotiating at renewal when your local market is soft.

If you already own. The takeaway is not to sell. It is to avoid becoming "house poor." Maintain an emergency fund, keep contributing to retirement accounts, and treat your home as one asset among several.

For anyone weighing this seriously, a fee-only financial planner or a reputable rent-vs-buy calculator can model your specific rate, tax bracket, down payment and time horizon.

What to watch next

Three variables decide whether the rent-vs-buy gap widens or narrows. First, mortgage rates: the video notes rates have climbed from the 6% used in its example to about 7%, which raises the buyer's monthly cost. Our coverage of the 10-year Treasury yield explains why. Second, local rents: if rents soften while prices hold, renting looks better; if rents rise faster than ownership costs, the balance can shift back. Third, home price growth in your own metro, which can differ sharply from the national picture.

The bottom line from the video is a useful one even if you disagree with the details: the real goal is to be financially sound whether you rent or own. A home is not automatically the best investment, and renting is not automatically wasteful. The winner is whichever path you can sustain, with an honest comparison of the numbers in your market.