Homeownership is grand, but it's something you want to get into with both eyes open. And besides, there are plenty of compelling reasons to rent instead of buy. I don't regret purchasing my home, but there are little incidentals that will blindside you if you're used to living in an apartment. Aside from that, owning a home is also a big lifestyle change. I love being a homeowner, but here are 5 super compelling reasons to rent instead of buy.
When I worked in NYC, we got ridiculous Christmas bonuses at the hedge fund where I was employed. RIDICULOUS. So large, in fact, that we joked about how everyone started shopping for newer, bigger, apartments in January because of the yearly Christmas cash influx.
My colleague Jen, (who is a now a famous author, mentor and friend) thought the idea of owning a home was ridiculous. I began slowly warming to the idea and she strongly discouraged me against it.
“Lauren, houses have roofs that leak, and heaters that break.” She'd say.
“But renting is so expensive!” I countered.
“Yes, but you pay for the luxury of not having to worry about those things.”
And you know what? It turns out she was right.
Here's five big reasons you may want to rent instead of buy.
You Want Flexibility
I think that this is the go-to argument for renters. Even a 12-month lease is more flexible than a 30 years mortgage. If you plan on relocating in the near future (for work, for family, or just ‘cause) renting is the way to go.
Have to move on short notice? Many landlords will allow you to buy out of your lease or sublet if you need to break your lease agreement – which in my experience is much easier than trying to sell your house!
You Aren’t Responsible for Maintenance
If you aren’t that handy with a wrench, you can rest easy knowing that your landlord should take care of any repairs your rental property needs. When you own a home it becomes your responsibility to fix, replace, and pay for those repairs yourself. And you can bet that any DIY mishaps you make will mean calling in a professional.
Does renting cost more? Sure. But as my friend Jen says, “you pay for the luxury of not having to worry about those things.
You Have an Irregular Income
Irregular incomes can be a huge deterrent for homeownership. Although mortgage payments are as consistent as monthly rent, and sometimes more affordable than renting, you don’t have to worry about property taxes or escrow payments as a renter. Apartment complexes also will sometimes bundle utilities for you or have discounts on services such as cable or internet.
Since you’re not responsible for maintenance or other related upkeep, you’re less likely to drain your emergency fund on your home. This makes renting a surprisingly helpful strategy for saving money for other expenses.
You Want to Skip Your Commute
I am super lucky to have the ability to work from home, but I know some of you are still braving traffic every day. If you are spending hours each day trapped in the car commuting to work, you could potentially save big by renting. But how? Consider how much money you spend on gas each month – not to mention the time or strain on your vehicle.
If you work in an area with an apartment complex or rental homes nearby, consider moving closer to your office. The flexibility aspect of renting (see #1) will allow you to do this!
Beyond the savings in gas, it’ll drastically reduce the amount of time from work to your bed at the end of the day. Although you may miss out on the charms of suburban living, renting can also give you the opportunity to live in places you wouldn’t typically consider. You may find that you love city life!
You Aren’t Financially Ready to Buy
If you’re hesitant about buying a home, you probably should rent. Homes are a huge financial responsibility and can end up costing even more if you aren’t prepared or don’t do your research. Think about it this way: the upfront costs alone of buying a home are usually tens of thousands of dollars.
Compare that to the upfront costs of renting, which typically include security deposits, pet deposits, and any move-in fees.
Before you buy a home you typically need to have plenty of savings as well as a stable job and good credit. While you work on achieving these goals, renting can be a great option for you.
Like this post? Get more first time home buying information in my book, The Millennial Homeowner: A Guide to Successfully Navigating Your First Home Purchase, now on Amazon. Click here to get your copy!
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