It has been a long-held belief that you haven’t actually made it until you own property. Buying your own house was considered the next step to “adulthood” after moving out of your parents’ house and talking some girl into settling down with you. Home ownership is the key indicator of stability and security because, no matter what, there’s a little piece of the world that’s all yours.
Financial advisors will also tell you that buying is the way to go. You’ll get equity on your home, which you can then access whenever you need some extra money. When you buy, every penny you put into your house comes back to you. When you rent, you’re just throwing money away. That’s the common sense thought anyway.
The thing is, while buying does have its advantages, there are also a lot of advantages to renting. In fact, in some cases there are more advantages to renting than buying. So hang up on that mortgage broker and read on.
3 Advantages of Renting:
1. Renting is actually cheaper than buying.
Sure, when you rent an apartment, that money lines your landlord’s pockets, but not for long. As a renter you are responsible for rent and utilities. As a homeowner you are responsible for the down payment, mortgage, utilities, taxes, yard upkeep (either the cost of supplies or paying someone else to do it), and condo or homeowner association fees if you live in a community that assesses them. You’re also responsible for the cost of all maintenance and repairs. And replacing appliances as they crap out on you.
2. You have more flexibility.
When you buy, you’re pretty much tied to your property and you don’t have much room for sudden moves. If you want, or need, to move into a new place you still have to deal with the old one.
For example, let’s take a look at Bob and Jim. They both work at a tech company in San Francisco. Bob owns a condo and Jim rents a unit in the same building. Both were recently promoted to run the company’s East coast operations in Washington, DC.
Before he can move to DC, Bob either needs to put his condo on the market, or he needs to rent it out. Either way, he still has to deal with his home in San Francisco on top of finding a place to live in DC. Not only that, but he could be paying the condo fees and mortgage, on top of whatever he’s paying to live in DC, until he can unload the place.
Jim, on the other hand, only has to worry about giving notice, finding an apartment for rent in Arlington, VA, or one of the other areas surrounding DC, and figuring out what to pack. He’s on the road to DC with a lot less stress and expense than Bob.
And jobs aren’t the only reason you might need housing flexibility:
· You could discover (after you bought) there are serious structural problems or maintenance issues.
· You could discover that you have violent and dangerous neighbors. (This happened to a buddy of mine after he bought. His next door neighbor liked to have crazy all-night parties that always entailed brawls, and always left his pit bull outside to roam into neighbors’ yards.)
· You could simply need more space.
Whatever the reason, there are a lot fewer strings attached to a rental than to a property that you own.
3. Better amenities.
Sure, you could buy a house with a pool and join a country club or gym, but you’ll also have to pay extra for those amenities. Many apartment complexes have those things on-site and they’re included in the rent. (And you’re not responsible for maintaining them.)
Even when they’re not included in the rent, you can often benefit from proximity. For example, renters in urban areas can find great fine dining options close by, and sometimes even inside their own buildings. Sure, people who own condos in those buildings also benefit from those amenities, but they might also have higher fees (like condo fees), and are still tied to the properties if they ever decide they want to move.
Now I’m not saying renting is perfect. As a renter you have limited control over your living space. Paint the walls a bold color? Might not be allowed. Bring Fido along? Some landlords don’t allow pets. And there is also the fact that you are at your landlord’s mercy. For example, if something breaks, you have to wait for the landlord to fix it or fix it yourself.
But if you value having the flexibility to move whenever you need to, and you’re not quite ready to deal with all the responsibilities and financial obligations associated with home ownership, renting could be your best option.
[Image: Cincy Project]