- I’ve watched so many friends buy homes this year, and it tempted me to do the same.
- I asked financial advisors if I should and they recommended it, but I decided to keep renting.
- I don’t want the responsibility of homeownership, I like moving around, and I’m OK paying more right now.
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Over the past year, many of my friends decided to ditch renting and buy homes. As I watched them go through the process of finding a realtor, getting a mortgage, and closing on their very first homes, I couldn’t help but think about how much I don’t want to follow in their footsteps, at least right now.
I enjoy renting at this stage in my life because I like having the flexibility to pack up and move to a new apartment if I’ve outgrown the space or the city. I’m also so focused on a handful of other financial goals (from funding my retirement accounts to having a healthy investment portfolio) that I don’t want to allocate money toward a down payment, mortgage, and all the other expenses that come with buying a home.
Even though I’m firm on this idea of not buying a place, seeing my friends do it made it tempting. I decided to do some more research and speak with financial planners and advisors. They shared convincing advice in favor of buying, but I am still choosing to ignore it. Here’s why.
I don’t want more responsibility
When you own a house, there’s a lot of time, energy, and money that has to go into maintaining it. I’m just not eager to edit my schedule to incorporate any of those things right now.
Financial planner Tony Grenier says that buying allows you to be more responsible not only with your finances, but also with your tangible assets.
“When you own something, it gives you the responsibility of taking care of it, maintaining it, so it can last long. After all, it is you who will spend more money fixing it if it gets broken,” says Grenier.
Of course, there are benefits that come with that responsibility (equity, or passive income if you decide to rent the place out), but those benefits don’t outweigh my desire to not take on any more responsibility right now.
Instead, as Grenier shares, renting gives the responsibility to the rightful owner.
“That is why when something goes wrong with the thing we are renting, be it a house or [a piece of] equipment, we call the owner to fix it,” says Grenier.
I don’t want to stay in one place
The idea of settling down is something that I know I’m not ready for. I’m excited by the idea of my lease being up at the end of the year so I can search for another spot to live for a year or two and then move on.
Joseph Favorito, a financial planner, says that the benefit of buying over renting is simply about building equity.
“If you can afford to come up with enough of a down payment, plan to stay in the same place for a long time, and the cost of a mortgage will be not much more than renting, then it usually makes sense. Especially while financing costs are so low,” says Favorito.
While the equity that can come with investing in a house makes me tempted to buy sometimes, it’s not enough for me to want to put down a lot of money for a place to live, especially since I know I won’t stay long.
Favorito agrees that makes sense.
“If you don’t plan to stay in one area for a long period, and being a landlord (by renting out the place) isn’t practical for you, then renting isn’t always a bad idea,” says Favorito. “You don’t want to buy a place and then be forced to sell it possibly for less money at an inopportune time. Real estate, like any investment, should be a long-term investment. If you’re renting and saving money every month, you’re still building equity in your savings. So renting isn’t always bad.”
I’m OK paying more to rent
An interesting argument for buying is that you have more fixed costs over the year, since you know what your mortgage payments will be, whereas your rent can easily change (depending on your landlord or a new place you move to).
“Renting a property gives you the freedom to move around and not worry about maintenance costs, that’s for sure,” says financial advisor Christopher Liew. “However, there’s also the possibility of your landlord increasing your rent and possibly evicting you if you fall behind on payments.”
That’s why Liew recommends buying, since you no longer have to worry about your rent increasing every year.
“Also, buying a place of your own allows you to take out a second mortgage should the dire need arise,” says Liew.
I understand how that makes sense, but not for me. I’m OK with paying a little more every month in rent as a compromise for not having to take on more responsibility, stay in one place for a while, or take on a mortgage. At least not right now.
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