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?