A couple of weeks ago, my mother sent me, my aunt, and one of my cousins this article from USA Today:
“Why your home is a worse investment than you think.”
Right now, my mother is renting a house while she figures out where she wants to live next. Last August, she sold her two-story home after falling and breaking her back in four places. She wasn’t sure where she was headed next, but she knew that she couldn’t be tied to a multi-story house as she got older. As my aunt and cousin responded to her email with “hell yes” and similar reactions, I realized we weren’t alone in our non-homeownership. But one of the things this article overlooks is the flexibility of renting. It’s not just about the financial aspect of owning versus renting; you can find many calculators online that purport to figure that out for you. But for Don and I, the reasons not to own a home stack up much higher than the reasons TO own a home:- Greater flexibility – Six months ago, my son was accepted into a much better school about an hour from where we were living. Initially, we’d though that we could commute, taking turns picking him up from school to share the driving burden. Two weeks into that, we realized we’d have to move – and gave our landlord 60 days’ notice that we were leaving. Thank goodness we had that option, and didn’t have to deal with selling a house, wondering if we could sell it for enough to pay off the mortgage, and prepping for showings. And, when we’re ready to move to the Keys, or travel for a time, we don’t want to have to wait for a good time to sell.
- Ability to adjust – As we run towards achieving our goals, we’ve debated moving into a much-less-expensive home to put more money into savings. We wouldn’t have that option if we owned our home. Our current rent isn’t cheap; but should we decide that we’re not hitting our goals fast enough, we could easily move into a less-desirable home for a time to amp up our savings.
- “House poor” – Growing up, my parents at one point owned an absolutely stunning home overlooking Lake Tahoe. However, between maintenance, insurance, association fees, and mortgage, they used to say they were “house poor” during that time, because too much of their assets and income were tied up in the house.
- Unpredictable expenses – In the last year as renters, we’ve had a hurricane damage several areas of our roof, and a dishwasher that went bad and took 400 square feet of flooring with it due to a leak. Neither of those instances cost us anything beyond our rent; but they cost the home owner plenty. Whether it’s a new air conditioning system, a new roof, a leak that causes foundation damage…homeownership comes with large-scale potential costs that could pop up at any time.
- More time – As a homeowner, I found myself constantly doing little projects around the house. It wasn’t unusual to spend a weekend tearing out the bathroom and replacing everything, or repainting the kitchen cabinets. Now, as a renter, I still do a lot of DIY projects – but they’re typically less intense, like painting curtain rods, and they’re not about improving the property’s value, they’re just about what I would like in my space. Not having to worry as much about home upgrades and modifications frees up time for other pursuits.
- Timing – As a homeowner, you can’t always sell when you want to, You may be stuck trying to rent out in a down market because you can’t sell, or worse, may be stuck living somewhere you don’t want to live anymore because you can’t sell.
Good for you! I wish I could have kept renting because of all the problems you detailed that are tied to buying.
Thanks Carissa! Every time something breaks, I’m grateful :).
Excellent post! I think it does depend on where you live. We rented for a long time and our biggest issue was having to move every two years because there is no such thing as a long-term rental here. But I definitely agree that there are major advantages to not buying!
Good point, Tammy – particularly for those who hate moving! I love and hate it at the same time; love the decluttering and taking an opportunity to rid ourselves of typically around half our stuff. We’ve also been lucky recently to have lived in rentals where we could stay for essentially as long as we wanted…