Should you rent or buy in Las Vegas, Reno, or Henderson? Compare monthly costs, long-term wealth building, tax benefits, and break-even analysis to make the smartest decision for your Nevada housing situation.
RENTING
After 5 Years:
BUYING
After 5 Years:
Total Net Worth Gain: ~$133,000
Based on $400K home, 3.5% down FHA, 7% interest rate, 30-year term, 3% annual appreciation
Property taxes: ~1.13% Nevada average | Maintenance: 1% of home value annually
Beyond monthly payments, both renting and buying have additional costs. Understanding these helps make informed Nevada housing decisions.
Annual Rent Increases
Nevada landlords typically raise rent 3-5% annually. Over 10 years, $1,800/mo rent becomes $2,500+/mo. No ceiling on increases.
Moving Costs
Average $1,500-3,000 per move (truck rental, deposits, time off work). Renters move every 2-3 years on average = $5K-10K over decade.
Security Deposits & Fees
First month + security deposit + pet deposits + application fees = $3,000-5,000 upfront each move. Money tied up, may not get full deposit back.
Lack of Control
Can't customize home, at mercy of landlord for repairs, risk of non-renewal forcing unexpected move. Instability has opportunity costs.
Opportunity Cost
Money paid in rent = $0 equity. Could have been building $50K+ equity over same period. Lost wealth-building opportunity.
Pet Restrictions & Fees
Pet rent $25-75/mo + deposits $300-500 per pet. Many rentals ban certain breeds. Homeowners: no restrictions, no fees.
Closing Costs (One-Time)
2-5% of purchase price. $400K home = $8K-20K closing costs. BUT: seller concessions can cover most/all in Nevada market. Ask lender.
Maintenance & Repairs
~1% of home value annually = $4K/year on $400K home. However, builds equity unlike rent. Plus tax-deductible if rental/investment property.
Property Taxes
Nevada: ~1.13% effective rate (below national average). $400K home = ~$4,500/year. Tax-deductible if itemizing (saves $1,000+/year).
HOA Fees (If Applicable)
$50-300/mo for condos/planned communities. Covers amenities, landscaping, exterior maintenance. Many Nevada homes have $0 HOA.
Homeowners Insurance
$1,000-1,500/year Nevada average. Covers structure/belongings. Compare to renters insurance ($200/yr but $0 coverage for building itself).
Mortgage Insurance (If <20% Down)
FHA: 0.55% annually on loan amount = ~$180/mo on $385K loan. Removable via refinance once 20% equity. Protects you as much as lender.
Paint, remodel, landscape as you want. Renters need landlord approval for any changes. Owning = your castle, your rules.
Homeowners stay longer, building neighborhood relationships. Kids in same school district. Stability benefits mental health & family.
No risk of landlord selling, not renewing lease, or raising rent excessively. Your payment locked for 30 years. True stability.
Most Nevada homes have yards, garages, storage. Rentals often limited space. Ideal for families, pets, hobbies, entertaining.
DIY improvements increase home value. $10K kitchen update can add $20K value. Renters: improvements benefit landlord, not you.
Paid-off home = asset to pass to children. Generational wealth. Rent creates $0 legacy, homeownership builds family future.
Bottom Line: In Nevada's appreciating market with relatively affordable home prices and rising rents, buying makes financial sense for most people staying 3+ years. Even with 3.5% FHA down payment, homeownership builds $100K+ more wealth than renting over 5 years.
See What You Can Afford to BuyStop renting. Start building wealth with Nevada homeownership.
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The "break-even point" is when accumulated costs of buying equal renting, factoring equity gains. After this point, homeownership becomes financially superior.
Average break-even: 33-36 months. Strong appreciation (3-4%/year) and moderate rent prices make buying favorable quickly.
Slightly longer due to higher home prices, but strong appreciation still makes buying worthwhile by Year 4.
Rapid growth market - tech influx driving prices up. Break-even lengthened by higher entry costs but still favorable long-term.
Slower appreciation but lower home prices. Buying still wins over 5+ year horizon due to equity building and fixed payments.
Lower down payment = faster break-even. FHA 3.5% down means less upfront cash, reaching break-even quicker than 20% down conventional.
Example: 3.5% down on $400K = $14K vs 20% down = $80K. That $66K difference invested elsewhere or saved shortens effective break-even.
Nevada historically 3-5% annual appreciation. Higher appreciation = faster break-even. Even 2% makes buying superior to renting within 3-4 years.
Math: $400K home appreciating 3%/year = $12K Year 1, $12.4K Year 2, etc. After 3 years: ~$37K equity from appreciation alone.
Nevada rent increases average 3-4%/year. Fixed mortgage payment looks better every year as rent climbs. Accelerates advantage for homeowners.
Example: $1,800 rent today = $1,854/mo Year 1, $1,910 Year 2, $1,967 Year 3. Mortgage stays $1,450. Gap widens annually.
Planning to move in 1-2 years? Renting may be better (closing costs, transaction fees eat equity). Staying 3+ years? Buying wins decisively in Nevada.
Rule of Thumb: If staying 3+ years in Nevada market = BUY. Less than 2 years = consider renting or short-term housing.
Mortgage interest & property tax deductions (if itemizing) reduce effective cost of ownership. Renters get $0 tax benefit. Shortens break-even for buyers.
Savings: $25K/year in mortgage interest at 24% tax bracket = ~$6K annual savings. $500/month effective reduction in housing cost.
Total Rent Paid (5 yrs)
-$114,000
Equity Built
$0
Tax Savings
$0
Home Appreciation
$0
NET WORTH CHANGE:
-$114,000
Total Payments (5 yrs)
-$140,000
Principal Paid (Equity)
+$55,000
Tax Savings (5 yrs)
+$30,000
Appreciation (3%/yr)
+$64,000
NET WORTH CHANGE:
+$149,000
WEALTH GAP AFTER 5 YEARS: $263,000
Nevada homeowner builds quarter-million dollars more wealth than renter over same period
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