Ever since I graduated from graduate school, my family has routinely asked me when I was going to buy a house. They are concerned about the money I am “wasting” by renting. They want to see me with an asset that will grow and serve as investment for the future. However, there are several good reasons why my husband and I choose not to own a home at this time in our lives.
- Homeownership is not always an investment. As the current market shows, owning a home can often be a liability. Consider how many homeowners are currently upside down in their mortgage or are fighting off foreclosure. In addition, many people have seen the value of their homes decline by 20 to 40%.
- Homeownership can be financially dangerous. I am a firm believer that people shouldn’t buy homes until they can afford them, which means that they are able to pay at least 20% down, have an emergency fund of 8 months or more, and can afford not only the mortgage payment, but the other expenses such as taxes and maintenance. My husband and I are not at that point yet.
- There is no flexibility. We would like to move closer to family within the next three years. Because we are renting, we can move when our lease ends. We have no obligation. However, if we owned a home, we would have to wait until our home sold (which in this market could take awhile), or we would have to be willing to drastically reduce our selling price.
- All repairs are our responsibility. If we own a home, all repair and maintenance costs would be our burden; they are not when we are renting. When the tile on the shower wall fell off and revealed that the tile had allowed leakage behind the wall, our landlord was responsible for buying a new tub surround, not us. When our parking space gradually turned into a sinkhole as the pavement gave way to the weight of the car, our landlord was responsible for the $3,000 fix, not us. Landlords usually have their own insurance. They can easily get Landlord House Insurance from CIA.
- The tax burden would be on us. We live in an area with expensive property tax that can range from $8,000 to $14,000 for houses in our price range. That equates to roughly $800 to 1,000 a month! I am thankful to avoid these taxes as a renter.
- Home insurance is more expensive. But there are ways to save on insurance for your home by checking out different companies. We are currently paying $100 yearly for renter’s insurance. Homeowner’s insurance would likely cost us 5 to 8 times that amount per year. Plus, we would be responsible for paying for all of the items not covered by homeowner’s insurance.
- Upkeep is our responsibility. We are a busy couple; I work from home and take care of the kids, and my husband is just starting his career, so he has to put in long hours. The last thing we want to do is maintain the lawn or hire someone to do it for us. As renters, we don’t have to worry about outside maintenance.
- Home heating is expensive. Our current lease includes heat, water, and trash in the rent. If we were to have to pay those expenses out of pocket, we could easily be looking at $200 to $300 per month in the winter months.
We do see home ownership in our future, just not now. We want to wait until we are financially solid enough to afford all of the additional expenses.
If you are currently a renter, don’t let other people make you feel bad about renting. You are not “wasting” your money; you have a roof over your head each month. If someone tells you that you are wasting your money, tell them that you are actually saving money by choosing not to pay all of the expenses that go with home ownership.
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