Rent or BuyFrom apartments and cars to clothing and furniture, huge numbers of the "Recession Generation" (20- to 34-year-olds) are choosing to rent their possessions, according to Bloomberg.

It's understandable -- in the wake of the Great Recession, the jobless rate has topped 8% for three years, student-loan debt totals $1 trillion, and among those able to get jobs right out of school, the median starting salary is a measly $27,000. All while the real costs of many everyday goods have risen.

But does it actually make sense to rent long term, rather than buy?

Rent vs. Buy: A Home

I've written before about why buying a home isn't always the best choice from an investment standpoint. But buying a home is more than just an investment.

Because of low interest rates and home prices that have risen more slowly than rents, buying is now cheaper than renting -- a whopping 45% cheaper in the 100 largest U.S. metro areas, on average, according to Trulia.

So, from a purely based-on-the-numbers standpoint, right now it makes more sense to buy rather than rent. Except when it doesn't.

First, you have to qualify for a mortgage, which may not be easy for those drowning in student loans or who racked up credit card debt during their college years (or years searching for a job).

You'll also need to have a down payment, which, for most, is the difficult part. As Trulia's chief economist explains, "It may be 56% cheaper to buy than to rent in Denver, for instance, but it takes more than 8 years to save enough for a down payment there."

So while buying a home is clearly cheaper, it may not be a feasible choice if your finances are in turmoil -- or if you want the ability to easily move.

Rent vs. Buy: A Car

Cars are a different story.

As The Atlantic reports, "The typical new car costs $30,000 and sits in a garage or parking spot for 23 hours a day." Not to mention the maintenance, insurance, taxes, and refueling costs.

The freedom of being able to go where you want when you want may be vital for some. But for an urban-centric demographic, that freedom isn't always necessary.

Also consider that with low interest rates and a stalling used-car market, leasing is more attractive than it's ever been. Still, it's only marginally better than buying outright. That's why finding a used car and buying it makes the most sense if you absolutely need the mobility. For everyone else, a membership in a car-sharing program like Zipcar (ZIP) is usually the cheapest option.


Rent vs. Buy: Furniture and Clothes

The trade-off you make when renting furniture and clothes is paying a hefty fee to borrow items that you wouldn't otherwise be able to afford at all. Unfortunately, over time, you spend way more on these rentals than you would if you simply purchased the items to keep, with the added bonus of being able to sell down the road, if you choose.

Checking out the website for CORT (a furniture rental company), full home packages range from $218 to $551 a month -- equating to between $2,616 and $6,612 a year. That's a serious chunk of change for a budget-conscious young adult. Instead, you'd be better off checking out Craigslist, thrift stores, and other secondhand retailers to cheaply furnish your home.

As far as clothing rentals, one of the most popular sources is Rent the Runway, a service similar to Netflix (NFLX), which allows you to rent designer outfits for 10% of their retail cost for a four-day or eight-day period. It's certainly a way to save money for a one-time event (wedding, Christmas party, etc.) but here again, you're likely to find better deals at a local thrift shop or secondhand clothing store.

Putting It All Together

Financially speaking, in every case except for automobiles, buying usually makes the most sense for the Recession Generation.

But the trade-offs aren't minor: Owning means you sacrifice the luxury of being able to easily trade off to a brand-new, up-to-the minute item. And owning also limits the freedom that comes with not being tied down by things that are hard to sell.

Ultimately, you have to decide which is more important to you -- your money, or your freedom.

Which camp do you fall into -- do you prefer buying outright or renting? Tell us in the comments below.

This article was written by Motley Fool analyst Adam J. Wiederman. The Motley Fool owns shares of Zipcar and Netflix. Motley Fool newsletter services have recommended buying shares of Zipcar and Netflix, as well as creating a bear put ladder position in Netflix
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r.powel46

A loan is a financial transaction in which one party - the lender - agrees to give another party - the borrower a specific amount of money which must be paid back in full.

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November 28 2013 at 1:51 AM Report abuse rate up rate down Reply
rleibo5486

Buying a car is usually less expensive than a lease because you build equity and with time ownership costs decrease. A lease has substancial upfront fees, taxes and sometimes closing fees. Quality used cars are expensive (due to depressed production in 2008 thru 2010). With manufacturer rebates and deals, sometimes new cars are less expensive than used. Zip cars are a great alternative, especially in large cities where parking costs are high and public transit is available. Understand that if an item is rented, leased, or loaned, the owner must make a profit. Lastly, if you expect to move within the next couple of years, renting makes the most sense as costs associated with the sales of property can be 5 to 10% of the value of the property.

September 20 2012 at 9:00 AM Report abuse rate up rate down Reply
1 reply to rleibo5486's comment
kate

Build equity in a car?

September 20 2012 at 11:16 AM Report abuse rate up rate down Reply
laedbac1

It is best to buy a home rather then to rent. Buy now. Its a great investment.

September 20 2012 at 5:40 AM Report abuse +1 rate up rate down Reply
nottenkamper

I too, have rented, own and had property to rent. Owning is the best way to go if you want to be yourself, and not follow others rules. I like pets, washing my car, planting flowers in my yard, improving the property, painting what and when I want, etc. Plus a tax break for interest and taxes for myself. If one likes to drive a vacation, and drive
on the weekends, please buy a car, and not lease. You will pay for lots of extra miles, and it is expensive. Garage sales have lots of used furniture, and most household items at a cheap cost. This economy has taught many of us to barter also (no taxes) for items we want. Time is also money, so exchange that for things you might want or need. I have friends and we exchange time, so we have freedom to do other things that further our careers.

September 19 2012 at 11:39 PM Report abuse rate up rate down Reply
nottenkamper

I too, have rented, own and had property to rent. Owning is the best way to go if you want to be yourself, and not follow others rules. I like pets, washing my car, planting flowers in my yard, improving the property, painting what and when I want, etc. Plus a tax break for interest and taxes for myself. If one likes to drive a vacation, and drive
on the weekends, please buy a car, and not lease. You will pay for lots of extra miles, and it is expensive. Garage sales have lots of used furniture, and most household items at a cheap cost. This economy has taught many of us to barter also (no taxes) for items we want. Time is also money, so exchange that for things you might want or need. I have friends and we exchange time, so we have freedom to do other things that further our careers.

September 19 2012 at 11:39 PM Report abuse rate up rate down Reply
RMS

I have been a tenant, an owner, and a landlord. The last time I rented was the day my landlady said I could not wash my car in the driveway. It has been my experience that I had a better class of neighbors when I owned, and had problem neighbors when I rented. Being a landlord is a lot of responsibility and headaches for not much return, I don't think I will ever be a landlord again. Ownership of a home gives you tax breaks that renting does not. I am currently between homes, but I will be buying again especially now with the depressed prices in the current market. As an owner, I don't have to worry about some landlord telling me I have to move because they are selling the house, and no one can tell me that I can't wash my car in my driveway !

September 19 2012 at 8:05 PM Report abuse rate up rate down Reply
colloc

I rented an apartment for several years while on a remote assignment, but as soon as I could I bought a house. Why? My house payments are $775 a month instead of $995 a moth for rent (my taxes are included in the payment). I can do what I want, hang pictures, paint the walls, etc. which I couldn't do while renting. I don't have noisy neighbors upstairs or beside me and I am getting 4 bedrooms, two baths and a garage for $220 a month less. I prefer to buy everything rather than rent.

September 19 2012 at 7:23 PM Report abuse rate up rate down Reply
Tom

If Obama wins then rent. If Romney wins then BUY!

September 19 2012 at 7:06 PM Report abuse +1 rate up rate down Reply
Al

iy is cheaper to rent you may pay 800 a month for rent but its better then 1220 a month than 4000 in taxes. now you tell me whats cheaper onless you want to pay 1500 a year to send someelse kid to school.

September 19 2012 at 7:04 PM Report abuse -1 rate up rate down Reply
MR MAN

THX FOR CLARIFYING THAT "SOME" NOT ALL OF "THOSE PEOPLE" ARE TRASHING & ROBBING OUR GATED COMMUNITIES WHILE WE'RE OUT AT WORK TO PAY THEIR SECTION 8 RENTS....FOR A MINUTE THERE I THOUGHT YOU WERE ONE OF THOSE PINKO LIBERALS.

September 19 2012 at 6:26 PM Report abuse -2 rate up rate down Reply