On The Monevator, I read about how first-time homebuyers may be paying their mortgage well into retirement.
With their parents’ help, they generally buy their first home around the age of 31, but without any help, it’s around the age of 37.
(P.S. If you are interested in dipping your toe into investing but don’t want to be bored to tears or confused at every sentence, I highly recommend The Monevator. It’s full of British wit.)
In the comments, reader Lemondy wrote:
I think you should buy if you want the stability of owning your own home rather than having the flexibility of renting. A house would certainly be a poor investment for most people (highly illiquid, leveraged, most of your wealth into a single asset without diversity). Long-term trends in house prices and property being a reasonable inflation hedge are all this market has going – maybe that’s enough
I see his (her? :D) point and I don’t disagree with it, except for that little point about “stability” and “renting”.
I do enjoy stability.
In my love life, food choices and what have you.
Save the drama for your mama, I say!
But stability as a good point as to why we should buy a home?
Not sold.
As a renter, and perhaps a die-hard renter for life (who knows? I never say never), I almost feel like the word “stable” means “a ball-and-chain”.
I already wrote about why I rent instead of buying a home here, and why I think homes are not worth their purchase price.
So forget the cost-benefit analysis here for a second, and let’s focus on the word: “stable”.
Why a home is more stable
- The same place to come home to every night
- *No fear of being kicked out with your bags tossed into the hallway if you miss your rent payment
- You pay your set mortgage each month, depending on if you have a variable or fixed interest rate; your mortgage could go up or down
Why renting is just as stable in comparison
- We pay $769 for an all-inclusive studio in an area where a larger space costs $1600 in mortgage, plus utilities, home maintenance and home appliances, and building maintenance fees.
- It is also the same place to come home to every night
- *You can also be foreclosed upon and tossed out into the street if you don’t make your mortgage payments! Or choose to leave on your own accord
- You pay the market rates, and it usually goes up, but you can always move to bring it back down
I am not trying to argue that buying a home is not stable.
I am just saying that renting can be just as stable if you look at the comparisons being made.
I know people who have lived in apartments for 30 years and counting.
These huge, honking, old apartment buildings are not going anywhere, and they need tenants to fill them.
You can even negotiate your rent with them, if you manage to compare notes with your neighbours and realize you are getting shafted.
Plus, you can get utilities included & live in a very nice area for cheaper than it costs to have a mortgage.
We pay $769 for an all-inclusive studio in an area where a larger space costs $1600 in mortgage, plus utilities, home maintenance, home appliances, and building maintenance fees.
Our old apartment was as big as the $1600/month mortgage, and we paid $1250/month all-inclusive.
Take the $350 difference in the payments and invest it, and it is possible to end up with more money in the end as a renter than a homeowner who’s home’s value may have stagnated at a real return of 0%.
Why the stability of a home can become cumbersome..
What if you have to move suddenly for a job?
Suddenly, being tied down to a “stable” home is not so comforting any more.
Life happens, and things change at the most inopportune moments, even when you wish desperately that it wouldn’t.
Maybe you will be lucky enough to get the company hiring you to pay for the realtor’s fees AND the loss in value of the home just to get you to move, but that’s quite rare, and probably reserved for super elite, pie-in-the-sky executives.
In that case you have two options, neither of which are rosy:
- You are stuck selling your home at a loss (you have to pay fees: realtor & moving)
- You end up keeping your home & the mortgage, and renting an apartment as well
Of course, I am playing the Doomsday Reaper here, throwing out the worst scenario possible, and it does NOT happen to everyone, but it just happened to someone I know.
I’m sure many of you have been super smart, and made a tidy profit buying and selling your homes.
But as a renter, the flexibility to move any time we choose, on our schedule is worth much more than being rooted to a place.
Case in point: We don’t like where we’re living right now.
The pipes are horribly noisy at night and we’ve made the decision to pack and live in another city for the interim before moving again to our final destination for now (Dallas).
As renters, we’re outta here without a second thought.
Stuff everything into suitcases, pack it all into the car and off we go. La dee dah!
The last time we moved, we even brought furniture with us. We disassembled everything, packed it into the car and moved in 3 hours.
As homeowners, we’d have to mull and ponder over all the nuances of having to pack up our lives, sell our nicely matched furniture, sell the home, pay realtor’s fees and figure out how to make it work.
Second Case in point: My sibling bought a huge mansion in a city.
Now they have to move, because they got a better job in another city.
They are now carrying 2 mortgages, trying to move their stuff out of their old home, pack it into their new home, and then clean up their old home and sell it on the market for the summer.
What if the house doesn’t sell for a year?
My sibling is stuck paying for 2 mortgages. For a year. That’s $2500 for the old home they are trying to sell, and $3000 for the second home they bought, without waiting for the first one to go.
I personally would have moved my stuff into a storage unit, and rented an apartment month-to-month, to sell the first home, before buying a second…. but what do I know? 🙂
I’m just a young, inexperienced, home-shunning 20-something year old girl apparently. 😛
We are also self-proclaimed minimalists.
We can pack our lives into 3 suitcases and 2 carry-ons each, and we don’t need much space to live in.
It all contributes to our ability to save even more money.
They say that paying for housing can take up to 30% of your net income, and if you can save on such a large fixed payment, it can make a big impact.
But not everyone wants to live like us, and we get that.
We’re just offering a different perspective on renting, and that it can be really awful or really awesome.
So stability as an argument that can apply to everyone, doesn’t fly for us.
We find the flexibility in renting to be more of a benefit than the stability of having been rooted down into one spot because of a mortgage
….and physical asset that we cannot pack into our suitcases & move.
You have to assess the situation for you and your lifestyle
Don’t just assume it’s more stable.
Don’t be swayed by the fact that it’s a home in your name, versus a rented space in your name.
It all depends on the situation.
You HAVE to run the numbers for yourself, your city, your family and your lifestyle(s).
You may find out that you will save money, feel better emotionally, and happier in your own home.
… or like us, you may not.
Just a girl trying to find a balance between being a Shopaholic and a Saver.
I cleared $60,000 in 18 months earning $65,000 gross/year.
Now I am self-employed, and you can read more about 
im a bit late. But when you eventually retire, and if you are not sitting on a big lump sum I believe that you would prefer to have a paid for house and only property tax payments to cover instead of someone else’s mortgage, which is what rent is. What most retirees do is sell their paid for home and buy a condo cash (in my city ). Low maintenance for them, only fees and property taxes to cover.
While working, covering rent is quite easy. There is a reason why social housing is filled with elderly folks. A lot of them could not afford houses in their working years and can’t afford rent while retired.
SO consider a mortgage a downpayment on stability once retired, and when you have that mortgage kill it quickly.
I agree though rent does offer a lot more flexibility , which is good since work can take you anywhere in the world.
I usually tell friends don’t buy unless you are certain you want to setup roots in that area. Selling is expensive and unless you want to become a property manager leasing is not desirable.
Good point Greg. This is all assuming that your mortgage is paid and you
just cover utilities and so on. Unfortunately, my parents are near
retirement and still haven’t paid off the house. :
To me, buying a place is part of my retirement plan. It is paying for the majority of my housing expenses for the rest of my life upfront and then small bits in mortgage payments until I have paid the house off.
I don’t think 5 years would have been the break even point for us. I’ve been in my house for over 10 years and it finally feels like we are making out better vs the market pricing of rentals.
I like using my home as a way to diversify my savings (in the form of home equity), but I also can’t think of anything more stressful than having to sell a home after a layoff and pending relocating to a new area.
I don’t think there’s a reason to rush to buy a house if your rental is affordable. I think if you are living in a huge rental, then maybe home buying makes more sense, but if you’re single and you can get away with a studio or 1 bedroom, then I’d sock the extra savings away for a big downpayment on something later in life.
I don’t disagree with most of what you say in this post – but your arguments all seem to revolve around whether flexibility is more important than stability (which it very well may be for many folks in this day and age). You didn’t convince me at all that renting is actually just as stable as owning. You gloss right over the most important point – that rents usually go up – by saying “you can always just move” to get somewhere back in your price range. Rent going up most years (sometimes by leaps and bounds) versus being able to fix your mortgage payment is the very crux of what makes owning more stable than renting. You don’t have to worry about the price going up on you and being forced to move.
Plus many neighborhoods of mostly owners are more stable in general than neighborhoods of mostly renters (zoning doesn’t change as much, people stay put longer and therefore get to know their neighbors more, etc). Owning isn’t better if you need to be able to pick up and go, but it’s definitely more “stable.. “
I agree with this. It’s hard to make a case that renting is “stable” when your answer to raising rents is “just move”. Having to just move every year or two doesn’t feel very stable to me! 🙂
Additionally, if you’re not renting from a corporately owned property like a big apartment complex, you do have to worry about your property owner deciding not to rent anymore or deciding to sell their investment property – which means your stable home is no longer stable.
I totally buy the stability vs. flexibility point – and each person has to choose which is best for them. But I don’t buy that flexibility = stability.
I’m in the UK, and we have quite a national obsession with homebuying. I am still renting, and looking to buy (at the age of, yes, 37) but I can see there are lots of arguments in favour of renting. In Germany, for instance, renting is much more normal as a long term life choice than it is in the UK.
The big issue for me, though, is that I don’t want to be worrying about paying rent when I’m retired. I’d like to have my mortgage paid off and not have to come up with those regular payments every month, or deal with rent hikes when I have no way of increasing my income.
My rent was $665/month for my 2 bedroom/1 bath at 1,012 sq feet. in Texas. I took vacations to Thailand, Las Vegas, Key West and other places. With zero debt I decided to buy a house after 2 years. Found a nice place and with the mortgage ($660), homeowners insurance ($1550+a year), Property taxes ($3700 a year), closing cost ($6000), increased utility bill ($93 in Apt. to now $250+), Appliances ($2200), some minor repairs ($1100), Pest control and inspection ($2000), Furniture ($1800+) and other stuff like HOA and school taxes, phone, cable ect. needless to say I won’t be taking any vacations for a long, long while.
But It’s cool I have my own place now and I pay rent to the bank instead of a landlord.
My suggestion is if you know you are going to have a steady income for the next 30 years buy a house, because it will eat through your savings like Pac-Man.
We bought a house in August 2010 and we love it. It’s eating up most of my money right now, but that’s normal first-year expense. And we’re pimpin’ it HARD with a killer modern fence and some new pieces of furniture. After it’s all said and done, home is where you want to spend your time… it’s where you live. Also, if you know some ball-park figures, you can get a good break-even point of reference here at NY Times interactive. http://www.nytimes.com/interactive/business/buy-rent-calculator.html
I always find it odd that people think they are “throwing away” money when they rent. When renting you always are paying fair market value. When buying a house (unless you pay cash) you are paying double (mortgage plus interest) for something over 30 years (not including maintenance, taxes etc), and in the end you may or may not actually have equity in it 30 years down the line. I don’t feel like I am throwing away money.
I love renting. I live in the best location (for me – downtown) and found a place that includes all utilities including cable. For me, owning is just ridiculous. My parents live next door to a hoarder and yet can do nothing because of it, the city says unfortunately there is nothing they can do. If my neighbourhood changes or I hate my neighbour, I can leave by the end of the month. I have access to transit, community and all amenities are literally within walking distance to my house. I don’t need a car because EVERYTHING I need is within 4 blocks of my house. I save more money because I am living cheap (and SMALL!) and don’t need to fill my space.
My husband (then boyfriend) and i bought our home (without our parents help) when i was 23 and he was 27. it is the best decision we ever made. instead of paying someone else every month we pay ourselves. we bought when the market was low and plan to stay until the prices go back up. we are also in a great location and the metro is going to be one mile away in a few years. for us there is no comparison to apartment living.
There’s arguments on both sides, but in the long run buying a house wins.
I’m re-assessing my current living situation, so I’m very interested in the pros and cons of renting and buying. Ultimately, I love to have a little plot of land that I could say is mine, however, I want to be sure that I’m making an informed and sensible decision when/if I go for home ownership. I’m finding the most challenging aspect of renting in my particular area is that long-term rentals are next to impossible to find. Most places around here rent only on short (weekly) term basis or only rent until the house is sold. It’s an odd market at the moment (in this area) which may or may not change based on what happens with one major employer in the future.
At least living at home is relatively stable! 🙂
I bought my first home (a small condo) when I was in my early 20s. Nearly ten years later I am on the verge of owning my current home free and clear. Instead of throwing away money on rent, I’ve been able to pay down my mortgage, and now I have an asset as a result of my hard work. In the very near future I won’t have a monthly housing payment. In the longer term I could sell the house to free up the equity, or I could choose to rent it to others. Neither option would have been available to me had I been a long-term renter myself. In my case buying a home gave me a nice mix of stability and flexibility — I haven’t been accountable to any landlords, but I moved once when the time was right (sold the first home and bought the second, carrying the equity forward with me as I went).
I like having a home. We’re actually renting it out at the moment and our rent just covers the mortgage, taxes and insurance and nothing more but I’m happy with that. Renting is more flexible but I like having something that my money is going towards. Renting is not just throwing away money because it is a benefit but I prefer to have something more concrete. It leads to more stability over time, in my opinion.
Interesting and all, but I have to say you are very young and may well alter your stance a little as you reach other life and work stages.
Once more, many of your arguments only pertain to the US/Canada (well, that’s logical!) but not everywhere in the world has such a volatile real estate market.
We rented for far too long – all the money that could have been invested in solid property – gone. Well over 50000. If we had been single, no kids, changing jobs, wanting to travel, like you, ok.
But it’s important to provide stability for kids. Sure, you can move kids around, how exciting… I grew up in 3 countries, with 4 different languages, 10 different homes, 5 different schools – I did NOT want that isolating and unsettling experience for my kids. The only home I had was one of my grandmothers, who has been in her house 74 years and seen the value rise from 800 to 100000, she is 95 and we will lose home when she goes.
Thankfully we now finally have a home of our own. We bought a special, small home at a very reasonable price we will always be able to afford (in this country you do not pay off a mortgage, that is tax madness), even when we retire. If we need or want to move anywhere temporarily or permanently, we can easily rent it out with this excellent location and being “special” (230 yrs old) and we have limited stuff that is easily stored if necessary. And eventually, our kids, now only one of 3 left at home, will inherit it and profit from our wise investment that no failing bank can screw up.
The younger two kids love their “home” and return eagerly, the eldest, who we had to move round rentals – she married young and bought a home of her own.
Stability is maybe more important than you may think at this point. Just saying from a little farther down the line…!
Love the discussions I find here regularly though!
I feel very validated that you gave this argument! Lots of my friends have been buying lately, but I feel completely content paying a monthly rent and not having to worry about a) suddenly having to move to another city, b) flooding in the basement, c) so many unexpected household repairs that they all have to deal with!
I totally agree
I think you have some really great points- but I also think a lot of this depends a LOT on where you live.I will say up front that I do sometimes worry that when we graduate and want to move, we won’t be able to sell and we’ll end up double paying or selling at a loss.
That being said, for us buying really felt like the better option.
-we pay less for our mortgage (plus condo fees) than we did for rent. We use the same utility companies. Granted, we rented in one of the more expensive apartment complexes in our area, but many of the others were old with crappy appliances, loud, bad neighborhood, etc.
-our condo is about 100sq feet bigger than our last apartment. We don’t NEED that extra space, but it’s not like we’re paying for a mansion for 2 people. Because it’s a condo, we also don’t have to worry about the yard or exterior problems. If an appliance breaks, we will have to deal with it, but on the other hand, we can update whenever we want.
In terms of what happens when we move- I’ve kept an eye on how quickly similar condos sell in our neighborhood- and most of them sell very quickly. No one can say what will happen with the housing market over the next 5 years or so, and it is a risk. But there is a high turnover of graduate/medical students, residents, and other medical center personnel in our area, and many of them are looking to buy these small condos. And at our last apartment, to break a lease early, you had to pay half of the remaining months plus a fee, and to rent by month instead of in a long term lease, you had to pay 1.5X the market rate for the unit, IF no one else wanted to sign a long term lease on it.
So, I don’t see buying as “more stable” than renting, but for us it seems like a better fit where we live right now.
I like Monevator too. I’m totally not averse to renting – the big downside is the dog – not easy to rent a place with a pooch. BUT, I do have to say that I’ve made out very well on my fixer-uppers and that’s led to the financial independence…
Quite honestly, I would have been scared out of the market and wouldn’t have bought with the price increases that were seen down in the States in the early 2000’s. It shocks me that so many people bought at the time and are underwater now. It’s like buying a stock at the peak – just don’t do that. (To be honest, I’ve thought of picking up some cheap property down in the US).
Having said that, I’ve never bought a house as a place to live, only as a non-taxable revenue earner. I like making money on my habitat.
come on now, hindsight is 20/20. Those of us who bought near the peak didn’t realize we were buying near the peak. It was just as likely back then that the market would keep going up and up before it dropped or leveled off. My rationale at the time (besides being ready to buy a house was) “if it goes up another 10%, I am priced out of the market completely”.
Same with buying stocks. You don’t KNOW when a stock is peaking until AFTER it’s gone down!
For us it was the same price or maybe even a little to cheaper to buy than rent. For one, we were able to sneak in at the end of the 8k first time homebuyer tax credit (which on a 94k home is almost 10% back to us). Our mortgage/insurance ended up being $630 which is what the average 1br apartment in the area is going for. To rent a house we would have been looking at $700plus. Even if lose some money on the house when we sell 4-5 years down the road, we will still be getting the majority of our money back, whereas if we had been renting, we’d be getting nothing.
Well. We bought our house in 2004 at the ages of almost 34 and almost 36. We bought not quite at peak, but our house is worth about $200,000 less than we paid for it (not counting what we put into it), but at least we aren’t underwater in our mortgage.
I don’t regret buying, because I love my little (2BR, 1 BA, small old) house. And I love my neighborhood. But. Financially, it wasn’t the best decision. Our mortgage was $4000 a month (now with refi, $3200). After the tax advantages, you’re looking at $3000/month at first or now $2400/month. Our prop taxes are $6500 a year, plus there is maintenance.
Rent on a similar home would be $1800-2000, and our rent at our old duplex (slightly smaller but with a 1/2 garage) was around $1650, and would probably be $1750 right now.
We would be better off financially NOW if we had continued to rent, and that would likely be true for another 10 years. Renting is a risk because mortgage locks you in to a monthly payment. I really wanted home ownership before I owned a home, but renting has its advantages. The worst part about renting for us is that it was NOT a “renter’s market” when we were renting. My hubby’s 1st 1BR apt was fine. We upgraded to a 2BR, but then they raised the rent $330/month. Then our next apt, they decided to sell and we had to move out. So, we had bad landlord karma. If you get a good landlord, you are golden. Our last one was great, but we didn’t stay long enough to find out. I miss the extra 1/2 bath.
Looks like I’ll be a long time renter since for me renting outweighs buying.
I’ve discovered this as well. Our rent and utilities are well under the cost of a mortgage + all the goodies that come with home ownership. Most mortgages won’t allow you to be in the healthy budget bracket of 30% for housing, today it’s 50-60% of a person’s budget causing them to be “house poor”. After a 6 mos lease we got a month to month deal, in a two family (which pays someone’s mortgage not a corporation). I spent most of my youth maintaining my parents house, and I have to honestly say, for the returns they got. It was NOT worth the work. We went from 1200 sf to, 2150 sf to, 2400 sf to 3600 sf! I can say in all that time we did not need that much space. We moved quite a bit as well, and each one cost us thousands even though we did it ourselves. No one thinks about the little things they have to do or buy when they go into a new home, or thinks about the cost to replace things to sell it. I also busted my butt and gave up summers (I could have been travelling, getting an education, volunteering, working for money) to sell our homes, cleaning/scrubbing/repairing/staging/ lighting/rinse & repeat, only to watch a Realtor walk away with a commission fee larger than an income I’ve ever received just for bringing a client, showing the house and doing the paperwork. As an adult I’m burned out on taking care of a house, and I won’t buy one until I have cash to do it.
When you pay a mortgage you are paying TWICE the retail price of the house. Paying rent you stay within a healthy housing budget, which keeps your cash flow free to invest in other forms of assets, and you never pay too much for a house by paying interest.In todays market a primary residence is not an investment, and owning a rental property or a primary with a secondary IS.
30 years ago owning a home was a great investment, but for my generation the 20 somethings? People want their cash cow and left us out of the market, with incomes that are not in sync. I’m not going to buy something I can’t afford.
Renting is one of the most stable, easy, reliefs I’ve experienced. Our land lords love having us here, because we are ideal tenants and I don’t have to lose sleep at night trying to figure out how to not starve this month.
@sarahmoriah
Thank you so much for commenting. While reading your comment, it almost seemed as if you were taking my thoughts straight out of my head. I couldn’t agree more.
What some of the commenters are not realizing is that the PRESENT is a gift, the future is not promised to us, and it makes more sense to be happy now living within our means than struggling and stressing to make a mortgage.
I would rather be able to do all the things you gave up (traveling, volunteering, putting my money into experiences rather than a physical building, etc.) instead of paying off a liability that I’m HOPING will provide a nice return when I sell it in the future.
You mentioned “Plus, you can get utilities included & live in a very nice area for cheaper than it costs to have a mortgage.” But what about areas where the cost to rent is the same if not more than what a monthly mortgage payment? I think that’s a different sort of argument and factor to include regarding stability. It’s hard to justify the cost of rent when I could pay just as much towards owning my own place. The only thing preventing that right now is the amount needed for a down payment. I live in a city where 20% down is quite common.
I think that the appeal for me to buy a home is that
1) I grew up in the countryside. There are very few renters in the countryside.
2) Chances are, your home value will go up if you stay there a long time for inflation alone, and you usually pay interest on mortgages faster than they accumulate.
3) Once you sell your house, your money comes back to you.
And right now is just a bad time to sell your house because of the economy. If it gets better, then owning a home would be more appealing to more people.
My neighborhood is under rent control, and payments rise just 1-2% a year. Also, (and I think this is true in a lot of places, though i know my area is known for renters rights), they can’t just kick you out for no reason – it is very strict. We are now month-to-month, though the point about not being able to get out of lease really is a different thing – it is probably cheaper to unexpectedly get out of a lease than to unexpectedly sell a home!
It is hard not to agree that owning a home can provide you stability as far as where you live goes. But unfortunately, you can’t guarantee the same stability in all parts of your life. If you lose your job or your spouse or you something compels you to want to move to a new part of the country, your home is a burden. But if you want to stay in one place for some time (and life allows you to do so), owning a home can be right for you.
Home prices, over the long term, historically track inflation. I will not be buying a home in SoCal until this chart tells me it’s a good idea: http://www.housingbubblebust.com/OFHEO/Major/SoCal.html Historically, homes are still overpriced, even though they’ve gone down a lot.
You’ve made some excellent arguments for renting!
When it comes to flexibility to get up and go, I think there is a difference between buying a house and a condo. I bought a condo a few years ago and had to leave for close to a year due to project I was working on in another city. I was able to rent out my condo within 3 days. The rent covered my mortgage and condo fees and when I completed the project, I had a home to come back to. Of course, this would have been more difficult with a house.
From an investment perspective, your home is likely to appreciate in value over time. The value of mine has increased significantly in 5 years. Of course I had to put some work into it, but it was worth it.
Also, when renting, you’re the mercy of your landlord. They can usually decide when they want you to leave, what upgrades they’ll make, etc. A friend of mine was told to leave her apartment because the landlord wanted his daughter to move in (apparently this is completely legal).
Renting is for short term if your job requires you to move often, which imo is very adventurous & mobile. I have a stable 9-5 with 0% traveling, I still like owning. However I want to own a space that is just right for the # of people living in it, for now it’s 2. I do NOT want a mansion with 3000+ sq feet. To me, 500 – 700 sq ft is so cozy & perfect for a couple, now with up to 2 kids, 1200 is enough. I have little possessions, so I don’t need a lot of space. I think of my job as my 2nd home, do I get to enjoy my house (admire the 20 ft ceiling, the loft, the sun room etc if I had a mansion) when I get home? Not really, by the time I get home, I’d be so exhausted, I cook, do some errands and exercise, then get ready for bed. It starts all over again the next day. . . with a bigger mortgage for a manse, I’d be more stressed out financially than enjoying the features of the house.. .
I agree that the commenter shouldn’t have used stability, but I don’t think you’re really considering every point here FB. Renting really isn’t that flexible as you usually have to sign a lease when you rent (very few places have month-to-month situations for precisely the reason you stated above: these places need tenants). Rents can be just as variable as you the owner can raise his rent when he feels like it and you either have to take it or leave it. You can negotiate your rent down sure, but that’s not likely. It’s just a possibility. In that same vein, owners can re-finance, which in today’s day and age is definitely looking more possible.
I’m shocked you didn’t mention the main point of owning vs. renting: you’re booking an asset. Every mortgage payment is decreasing that liability (mortgage) and increasing your equity in your home. With rent, you are literally going on a $1,000 shopping spree every month. Money thrown away and that isn’t coming back to you, except in the form of a home.
I think that if someone is considering a home vs. renting, they should consider their needs. How much space do you need? Location? Once you answer those questions, you will easily find the point where you can no longer afford to rent because it just might surpass your mortgage payments or vice versa.
I have a post coming out on Monday – Why it’s better to buy than rent. 🙂
If it works for you, then renting is great. I 100% believe in buying a home though for educational purpose as much as anything.
I feel that the power of your argument was kind of lost in the bias FB. Perhaps you should distinguish that a number of your arguments aren’t renting vs. owning, they’re minimalist renting vs. owning. Most of the people I know who bought homes moved the contents of a fully furnished apartment into a fully furnished home. No one sold their furniture when they moved (and it certainly isn’t nicely matching), and “figuring out how to make it work” was something we did moving between rentals as well.
Obviously in both cases if you don’t pay you get booted, but a big part of the stability argument that wasn’t addressed here was the fact that as an owner you don’t have a landlord telling you to move out in a month or two because they need the space (more likely to happen in basement rentals than apartments, but still happens). You basically remove a middleman as an owner, which increases your stability.
You have a lot of valid points here, especially having to sell a home at a loss or being stuck with 2 mortgages at once (or, heaven forbid, both at the same time like my parents had to do), I just feel like a lot of the message was lost.
I just want to say I’m still excited you’re moving to my city!!! Also, when I do buy a house (which shouldn’t be for a long time), I plan to do it with at least 20% down or more, and on a 15 year mortgage. There’s no way I’m paying for a home until I retire!
The appeal for me to own is that I’d like to be able to renovate a bit. Have nicer counters, a better bathtub, and create a small dance studio… I haven’t found a landlord who’ll do that without paying, and it just isn’t worth the cost of me putting it in.
I don’t want a house for the space; if/when I buy, it’ll be a condo (hopefully without too many condo fees).
Great points about renting! My husband and I bought a house when we got married because we thought ‘that’s just what you do’, and ‘why keep throwing money away on rent’, well our house is now worth half of what we paid, we don’t live in it anymore because my husband got a job abroad, and every month I have now have the stress of hoping my renters make their payment on time and don’t decide to skip out suddenly. I loved our house, but boy do I regret it.