Here in my neck of the Midwest, it’s super common for recent college graduates to buy homes. Almost immediately upon taking a full-time job, I’ve seen numerous of my friends, colleagues and Facebook acquaintances buying homes around my city. Single people or couples, it doesn’t seem to stop anyone from buying around here. However, in some locations in my city it is way too expensive for the average twenty-something to own a home, which is upsetting because these are some of the most safe locations in the city I live in.
Unlike a lot of people my age, I have zero interest in owning property. Believe it or not, the majority of my family have been lifelong renters! That’s a pretty rare statement in this day & age. That choice seems to have trickled down into my life, but I’m glad because I’ve enjoyed renting most of the time. It’s been a great choice for me since I’ve been renting for the most part since I turned 18.
With no further ado, ten of my reasons to rent instead of buy!
- Lower Home (& Auto) Insurance: My renters and auto insurance are connected (and I’m sure my homeowner’s could be merged with my auto) so I have lower premiums due to a multi-line discount. That said, my renter’s insurance is $10/month and it covers floods. If I owned my home, depending on size and other factors, I’d be looking at a much larger monthly bill.
- Low maintenance: If I have a problem, I call the management office and they send someone to fix it for me. The washer or dryer died? I call the office and someone else fixes it! The air conditioner goes out? I call the office and they send technicians. The best part is that the cost doesn’t fall on me. As a homeowner, I would be the one to pay for and handle all repairs. I also don’t worry about maintaining a yard, but I live in a very urban area, so I wouldn’t have to anyways.
- Low utility cost: In my current rental, my utility costs are very low – usually less than $100/month. I pay for electric, basic internet, and that’s all. My landlord covers all other necessary utilities. If I owned property, I would be responsible for other utility costs.
- Property Values: In the area in which I live and rent, most homes sell for $300-400K. Obviously, the property value is very high here. If I owned property here, my mortgage payment would be over TRIPLE my rent. If I didn’t rent, I could not live here as my income wouldn’t be able to support it.
- Location: At my current rental location, I am within walking distance of my current job in one of the best food & nightlife areas of my city. The crime rate is also extremely low here, making it one of the safest locations in the city. I’m also less than a mile to two different grocery stores. Location is an extremely important factor for me. Renting here gives me safety, but also convenience.
- My Personal Debt-to-Income Ratio: This is something that’s relative to each person, but it is extremely relevant to me. When your yearly income is barely over what you owe in student loans, that doesn’t look good to mortgage lenders. I just don’t see the reason to add any mortgage debt on to the debt load that I already have.
- Length of Time I Plan to Stay: I like mobility. I tend to stay in places for about 3 years before I move elsewhere. Since I enjoy being in places short-term, buying seems counterintuitive.
- Minimalism: I don’t buy “stuff.” Therefore, I don’t have a lot of “stuff.” If I were to buy a home, I’d inevitably have more space to put stuff. If I bought a home, I’d have to buy the stuff to fill it – appliances, lawn equipment, a bigger bed, a better couch, etc. No thanks, my minimalist self will pass.
- Need for Paint & Decor: If you look at number eight, you’ll see that minimalism is important to me. I have no need, want, or desire to paint and nail things to all of the walls just to make it “my own.” I’d much rather spend my money on a few staple pieces that can be used and repurposed in various ways, rather than worrying about painting accent walls to match one piece of furniture or decor.
- A Home is NOT an Investment: Let’s say it again, a home is NOT an investment. Think about it, you plop down a large chunk of change to buy a home, but it’s future value is unpredictable depending on the market. Think about all of the extra fees, taxes, and maintenance costs that you incur over time. Then, when you want to sell it, you have to wait for a buyer to actually buy it. After that, you might be lucky to break even or profit on the sale, but don’t forget closing costs that will come out of your pocket as well. Too many “ifs” for me. I would rather put my money in an investment account that I can see the value of at anytime.
For me, the pros of renting FAR outweigh the pros and possibilities of ever buying a home.
Tell me in the comments: What are your reasons for renting instead of buying? Or, buying instead of renting?
*Part of Financially Savvy Saturdays on brokeGIRLrich, A Disease Called Debt and One More Broke Twenty-Something*
26 thoughts on “My Ten Reasons to Rent Instead of Buy”
You know, my husband and I are facing this dilemma right now. I’m active military, so we have the VA loan at our disposal, which means no down payment and no PMI. There are other benefits, but I found those first two the most appealing. We are in the Denver suburbs. The housing market here is out of this world – as is renting. But…. you can get a lot more home for your money if you buy. For what we could buy a home with – we easily spend more on renting. So… we are thinking of switching it up and buying our first home next spring. The bad thing is… we too have a debt load that equals our combined yearly salary. This is where we are torn. We have some time to get that number down, but I am still unsure which route to go.
I wish I could get more house in the part of town I live in. The majority of what is around me are high-rise condos and old Victorian style homes. As for you, sounds like you guys have a lot to consider! Good luck!
We only brought here because the costs of a mortgage fit within our budget, our 1 bedroom apartment cost us more in rent than the mortgage on our 3 bedroom 1 bath house! However, homeownership isn’t exactly a luxury to me either considering we had to “invest” in an $8,000 hvac system two weeks ago. I’m not going to think about it. But your reasoning is definitely on point. There are a lot of advantages to being a renter!
$8000 HVAC system?! Yikes, that’s just the bill I’m trying to avoid! I’m jealous that your mortgage was less than your rent! Wow!
If renting costs weren’t so expensive where we were, we would definitely consider it. Being a homeowner adds up and it takes a lot of time (on my husband’s part;)) to maintain that yard. If I were single, there is no way I would be able to handle all of the responsibilities without going crazy!
Yes, the maintenance of a home would be overwhelming for me all alone. I barely have enough time to clean my own 1 BR apartment! 😉
Sounds like you have good, solid reasons why renting makes sense for you. As for me, I’m an owner, but of a condo, so there’s at least a bit of compromise in that I don’t need to worry about outdoor maintenance and I have access to facilities like an outdoor pool.
As a condo owner, do you have crazy HOA fees? Many of the condos around here have great prices, but they add on HUGE HOA fees. I almost considered buying one at one point, but then I the HOA and building fees turned me off!
Our HOA fees are $250/mo, pretty reasonable for the area and the amenities I think, but definitely another thing to consider. Also we have the occasional crazy HOA rule, like no gas or charcoal grills on the patios. So I basically have a giant George Foreman grill on my patio that serves as my barbecue.
The lowest HOA fee I saw in this neighborhood was $450! That’s like paying TWO rents in my opinion!
Hi! This is a really interesting blog post and I enjoyed reading it as we are currently in a dilemma of wanting to own our own property but simply not having an option but to rent! I think all your reasons are really valid but my one issue with renting (here in the UK) is that at any point you could get 2 months notice and be forced to leave! With lots of cats this can be an issue when rentals allowing animals (let alone children) are few and far between! 🙂
I love not having to deal with structural issues/boiler issues/emptying the septic tank! But I wish we had longer tenancy agreements in the UK and then I could breathe more easily!!
Oh wow, 2 months notice?! That’s wild! I understand that if you have animals things can get trickier!
I’m in a similar situation – now that we’re a few years out of college, everyone seems to be buying homes. While I’m still renting. Though I often feel envious when I see Facebook posts about someone’s new house, I have to remind myself that I don’t want to add a mortgage on top of my student loan debt. If I stick to my current debt payoff plan, I’ll be debt-free by 2018. At that point, I can decide if buying a home is right for me.
Thanks for sharing these reasons why renting is better than owning. They made me feel much better about my current situation!
Good for you on being debt-free by 2018! That’s awesome! 🙂
Buying made more sense for us, but rentals tend to be higher than mortgages here and we aren’t moving any time soon. We’ve also had success turning our former homes into rental property, so for us, they really were investments.
That’s awesome that you were able to flip your homes into rental property! Buying can have its perks!
We ended up buying because even with homeowner’s insurance, and higher utilities, the cost came to be significantly less (to the tune of $500 a month) than renting. We were renting for slightly less, but commuting 2-3 hours a day (each) – which was miserable.
We’ve been in our new house for two months, and I don’t regret it at all. I love it. Being 4 miles from work, paying about the same as we were to rent far away, is totally worth it. I get to see my kids. I have a tiny little yard. I love it!
Maintenance is a relevant point. There were a few things with this house that needed to be fixed, but I negotiated for the seller to put a new roof on the house, which was a major expense. The other things were able to be handled by my stepdad, who’s a contractor.
All-in-all, it was the right move for us, in our area, at this time.
That’s a great story about buying! In this particular area, I don’t see that kind of thing happening. I’m glad buying was a positive experience for you!
I’m all for renting too. Mortgages are too permanent for me right now and I’m also a fan of my minimalist lifestyle.
I’d rather do things and go places than have stuff! That’s kinda the same mantra I’m using for my apartment too! 🙂
Mobility is definitely one of my reasons for renting, I’ve lived in 4 different states in the last 5 years. Now I don’t plan on moving again anytime soon, but I do travel a lot in my current job and not having to worry about home maintenance makes it easier. There is no yard I have to take care of and when I do have issues I can just call the apartment maintenance office to get it fixed.
The lack of maintenance is a SERIOUS selling point, IMHO.
Ooh this is interesting! Because I’m currently renting (in the UK) but can’t wait to buy! I do understand all your reasons above, except the last one about home buying not being an investment. I think it can be. Yes there are fees and maintenance to pay when you buy a home, but providing you do actually pay the mortgage off, one day you’ll own the home. The only costs afterwards are running costs and it will be an asset that you can sell if you want to. Over long periods of time, properties generally do increase in value (at least in my experience)! My vision for buying a home is long term as I don’t want to chop and change, so this is probably influencing my view.
Sorry Broke20Something! I tend to disagree with a lot of your reasons. 🙂 They are good from one perspective, but for building long term wealth, real estate is the fastest way to do it. I’ve written a lot about this and have found that there is no faster way to build both equity and cash flow. Of course I am talking about buying and then turning them into rentals, so maybe there is where we can agree. ;D Thanks for writing, and do consider my idea!
Passive Income Dude
Sorry I missed this comment earlier! The good thing about this blog world is that we all come different walks of life. I think your idea about buying property is a great idea if that is where you want to invest money and build wealth. For me, I don’t see owning property as a good life choice in the line of I work I do. It’s all mostly temporary, so the permanence of ownership does not sound appealing or sustainable in my life. So I’ll stick to renting. 🙂
Broke20Something, sounds good 🙂 and you bring up a great point in that everyone’s situation is different. I’m still holding out for you to come around to real estate ownership when the time is right! Take care,