3 reasons it can be smarter to rent, even if you can afford to buy

Prospective homebuyers should have conviction about where they want to live, said Kamila Elliott, a CFP based in Atlanta and a member of CNBC’s Advisor Council.

For example, would they enjoy living for several years in a particular city or suburb, or in a specific neighborhood? If they had relocated for a job, would they still want to live there if they lost that job?  

If the answer to any of those questions is no, renting is likely best, said Elliott, co-founder and CEO of Collective Wealth Partners.

“If you can’t commit to being there [at least] three years, don’t buy,” said Elliott.

Flexibility is a big plus for renters, Boudreaux said.

For example, if you move to an unfamiliar place, “renting can be a nice pathway,” he noted, in order to avoid buying and then discovering you don’t like the location.

The benefits can be both psychological and financial.

Home prices can be volatile, making it more likely a buyer wouldn’t make a profit if selling after just a short period of ownership, Elliott said.

Upfront transaction costs like realtor’s fees are also generally “very expensive,” making it harder to break even on a short-term home purchase, Boudreaux said.

There’s also a certain lifestyle benefit to renting instead of buying, advisors said.

Renters don’t have to deal with the “nuisance factor” of scheduling appointments with landscapers and exterminators or paying for home repairs, Elliott said. That’s typically a landlord’s responsibility.

“You don’t have to worry about fixing the dishwasher, garage door, or HVAC unit,” Elliott said.

Depending on the building, renters may feel safer if there are additional security cameras or a doorman, or get convenience and social benefits if there are amenities like a gym or pool, she added.

Conversely, a house may be the right lifestyle choice for someone who wants a big yard with a nice garden and room for a dog to run around, Boudreaux said.