Buying a place to call home is a complex decision for almost everyone. In addition to working out your finances, you have to find a place on the market that works for your needs. This could include anything from the quality of the property itself to the neighborhood it’s in. But is making this complex decision even worth it for you? We don’t know your unique situation, but here are some general things to consider.

Location, Location, Location

Where you live probably makes the biggest difference in how much your potential home will cost. Heavily populated areas like major cities mean high demand for housing, and with only so much land to build on it means prices skyrocket. In areas like San Francisco and Manhattan, the average home costs over $1,000,000! In this situation, even if you have a sizeable down payment, you’re in for a lot of debt.

How much debt? Let’s assume you live in a major city and want to buy a home downtown for $1M. You have 20% saved for a down payment and get approved for an $800,000 mortgage. The lifetime of the mortgage is 30 years with a fixed interest rate of 4%. By the time you pay off your home, you would have spent $1,574,955 with interest and your down payment included. This equates to a monthly mortgage of $3,804.

But those aren’t the only expenses that come with being a homeowner. You’re responsible for paying your realtor (if you use one), property taxes or condo fees, maintenance, and optional insurance. Assuming your property taxes are 1%, and you budget $3,000 per year on maintenance (includes lawn care, snow removal, plumbing, roofing, etc.), your total now jumps to $1,964,599. Is that worth it for you?

Return on Investment

If you think the value of your home will eventually exceed the costs, you don’t need to be too worried, right? Not exactly. In finance you always need to be thinking about your ROI. So, what would the value of our $1M home be in 30 years?

Similar to the stock market, real estate prices are volatile and it’s impossible to predict exactly what will happen. But for this example, let’s assume an average annual appreciation rate of 6% (above the U.S. average). Over 30 years, your home would be worth $5,743,491, meaning you gained $3,778,892 after expenses. That doesn’t seem too bad, but it only equates to an annualized return of approximately 3.64%.

As you can see, even given an above-average appreciation rate, buying a home probably won’t be enough to substantially grow your wealth. So what can you do if you want to make the most of your money?

Renting and Investing the Rest

An increasing number of people are opting to rent instead buy. There are certainly non-financial reasons for either argument, but we’ll take a look at the decision from a purely financial perspective. Let’s start with an example.

Let’s assume rent for a $1,000,000 home is $3,400 per month and rent appreciation is 4% annually, about average in San Francisco. Over 30 years, you would have spent $2,288,265 on rent, so about $300,000 more than owning a home by our examples. However, you still have that $200,000 down payment and an additional $400 per month you’re saving on your mortgage that you can invest anywhere.

Let’s assume you invested that over 30 years. If you were to invest in the stock market with Emperor and receive our average annualized return of 16.85%, you would have gained $32,273,121 after expenses. That’s a substantial difference and is why many billionaires opt for the stock market over real-estate.

But don’t just take it from us, according to real estate data firm Attom Data Solutions, most Americans live in areas where it’s more affordable to rent than to buy. This is largely due to two factors. Home prices rising faster than wages, and home prices rising faster than rents.

At the end of the day, it’s your decision to make based on your unique situation. But if you’re looking to substantially grow your wealth, owning a home might not be the best option for you.