Over the last six years my family has enjoyed the blessing of being homeowners. Every part of enjoying a home was a blessing for us, but after selling our home a few months ago, we’ve decided to rent instead of buying a home. The decision may or may not be a permanent one.
If you’ve read much personal finance advice about renting, you’ll hear people talk about ‘how you’re throwing money away’ and how you’re ‘losing out on all that equity’ when you rent.
But, there are valid reasons to rent – reasons that can make renting appealing to anyone.
5 Reasons Why Renting Might Make More Sense than Buying
1. Renting costs are more consistent than homeownership costs.
When you rent, you have a much better idea of what your end of month house expenses will be. As a homeowner, you must be in a financial position to cover whatever small or large disasters may come upon you. One month you may just have a few minor expenses followed by a month when a major appliance breaks, or a storm destroys part of your home. If you don’t have an emergency fund or if you have a lot of debt, you’ll find the financial stability of renting provides a lot more emotional peace.
When you rent, your payment is the same no matter what breaks or goes wrong.
2. Renting involves less anxiety and provides a more financially stable environment.
We all know that house prices don’t just go up. I know a lot of people who are upside down on their house. The house that was supposed to be a blessing is now more like an anchor. While it is impossible to know what house prices will do in the future, you’ll be exempt from worry if you’re renting instead of owning.
3. Renting provides more flexibility.
Someone I know owns three houses – on ‘accident.’ They lived in city one and bought a house. When they moved to the second city, they bought another house. The third move resulted in a third house – even when the other two houses were unsold. There are certain careers that require a lot of moving. In those situations, renting provides much needed flexibility. Flexibility to quickly find a place to live and flexibility to easily move if and when necessary. If you’ve moved very much, you know that flexibility is priceless.
4. Renting may simply be your only option.
If you’re one of thousands of Americans who went into foreclosure within the last few years, then renting may be your only option. And that’s OK. Since generally the cost of renting is less than the cost of owning a home, this should be to your advantage. By renting, you should be able to free up any needed funds to pay off debt, begin to build up a savings account, and begin to rebuild your credit. If you’re in a situation where you’re forced to rent, recognize that there are definite advantages to renting over owning at this stage in your life.
5. Renting removes some expensive spending impulses.
If you own a home, you likely feel a certain amount of pressure (or desire) to make your house all it can be. Most homeowners have bucket lists of what they’re going to fix, improve, or remodel when they get the next raise. However, as renters you can easily shrug off those home makeover desires by reminding yourself that you don’t actually own the house.
Renting is not a bad financial decision. Depending on your situation and your circumstances, renting can in fact be a great decision.
Still thinking about buying buying a house? Here are some things to do before you buy.
Do you rent or own? What are some of the advantages or disadvantages?