6 Advantages of Renting Instead of Buying Your Home

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We live in a financial world where renters are looked down upon by their ‘superior’ house-owning friends. They scoff, “You’re throwing your money away.” They brag, “My house is worth $5,000 more than I paid for it.” They exhort, “You really need to get into real estate.  That’s where the money is.” Unfortunately, before long…

We live in a financial world where renters are looked down upon by their ‘superior’ house-owning friends.

They scoff, “You’re throwing your money away.”

They brag, “My house is worth $5,000 more than I paid for it.”

They exhort, “You really need to get into real estate.  That’s where the money is.”

Unfortunately, before long renters start to listen to the lies homeowners tell.

Two False Reasons People Say You Must Buy a House

1.  First Home-buyer tax credit of $8,000

Quick.  Time is running out.  Go buy a home and save $8,000.  While that might sound like a Real Estate commercial, it is actually a stimulus program currently offered by the US government.  While the $8,000 credit sounds appealing, you should only buy a house when the time it right.

How do you know the time is right?  Ask your checkbook.  If you make a preemptive move to buy a house before you are ready, you will pay more than $8,000 worth of regret, stress, and possibly even interest payments.

2.  Homes make a good investment

Truth. Homes are only a good investment when the value of the home increases.

Truth. Home values occasionally decrease.

Your solution – make your home a home and make your investments an investment.

The primary function of a home is a place to live.  If you make a profit when you sell your house that is great.  But, if your home provided you with a good place to live and you lost money when you sold it, that is fine because it gave you want you needed – a home.

Too many homeowners become real estate speculators instead of house shoppers.

The decision to buy a home involves more than a good online calculator

I’m skeptical of any generic online information.  Seriously, why do so many people entrust their lives to a few numbers that a calculator spits out?  The lie is that if it makes sense on paper – if the math adds up – then it must be the best decision for you.  This, however, is not true.  People who only follow the advice of others will continually make bad money choices.

While there are other big ticket items you might want to buy, it is not bad to rent a house or apartment.

My Personal Experience:

My wife and I purchased our first home more than six years after we were married.  In many ways we were in a unique situation because I was a youth minister so our housing was provided by the church.  For that I am extremely thankful.

Some will say that I should have been building equity by owning my own home.  However, having the parsonage for those those two years saved us from our own stupidity.  Who knows what crazy thing we would have done if we started looking for our own housing?

Looking back I have absolutely no regrets about waiting six years after marriage to buy my first home.  I love being a homeowner.  I do, on the other hand, know a lot of people who bought a home early because it ‘made sense’, but now they have serious regrets.

The decision about renting or buying needs to be about your situation in life, your preferences, your dreams, and yes, even the math.

There are advantages of renting a house or apartment instead of buying.

6 Advantages of Renting

  1. You budget is more predictable. Homeownership lacks predictability.  You do not know when the hot water heater will break, when termites will infest your home, or when your foundation will crack.  Each of these emergencies require money to fix.  When you rent you pay a set dollar amount every month.  Regardless of the repairs needed you still pay the same amount.
  2. You have time to save up money for a down payment. You need to be disciplined in order to do this so perhaps every month you should set up an automatic deposit into a savings account.  In the long run this could provide some significant interest payment savings.
  3. Flexibility. When you are first starting out your marriage it may be difficult to know where you will settle long term.  Renting offers the opportunity to move as needed and when needed.  You might not be planning to move, but as a renter that becomes a more viable option.
  4. Less Responsibility (apartment). This may only apply to apartments, but I miss the days when the lawn and the repairs were someone else’s responsibility.  I enjoyed just leaving town without needing to find someone to watch the house.
  5. Emotional Peace. I have debt allergies.  I love the debt-free lifestyle.  The idea of having a debt (yes, even a “good debt”) doesn’t sound appealing.  So many people have so much debt that they are upside down.  So many people complained and suffered when housing prices dropped.  These are all concerns that the renter avoids.  How do you put a price tag on emotional peace?
  6. Time to get smart. I made some dumb money decisions when I was first married.  Looking back now I’m actually amazed that I didn’t make worse choices.  Renting gives you time to grow a brain before you buy a house.  Renting allows couples to get a clear sense of what they want to own and how much they want to spend.  Some lessons can only be learned with time.

Which do you think is better – homeownership or renting?  Do you think there is a standard right answer for everyone?

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About Craig Ford

Craig is a full-time missionary in Papua New Guinea who writes Money Help For Christians and Help Me Travel Cheap, a frugal family travel blog. He is the author of Money Wisdom From Proverbs, has a Masters of Divinity degree, and (most importantly) eats homemade pizza with his family every Friday night.

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  1. MBAbriefs says

    I think it really depends on your personal situation. I’m currently renting a house after owning two other homes and I like the idea of being able to move to another area without having to worry about selling a house. If I lose my job due to the economy it will be easier for me to relocate to find another job. I also agree with all your other reasons, there’s less stress when you’re renting because if the furnace goes out or the roof leaks I don’t have to worry about huge unplanned expenses. Just because you can get a mortgage payment that’s lower than your rent doesn’t mean you’ll be saving money by owning a home.

  2. Mrs. Money says

    I don’t think there is a standard answer for anyone. I bought a house almost 3 years ago becuase I thought it was a good investment, etc. and now I’m regretting it because I want to move but don’t want to lose a ton of money! 🙁 Plus, it is so much work to own a house!

  3. Craig Ford says

    Wojciech,
    Sounds like a smart move to me – waiting until “we feel we’re in a position to buy”.
    I think a lot of peole who prematurely rushed out to buy a house might just look back in a few years and and regret their choice.
    Keep it up!

    Traciatim,
    Re: Comment #1
    Thanks for your comment.
    While I might not be able to convince you, each item I listed is 100% true based on my experience. If, however, your experience is different that is fine. I wish you all the best with homeownership. By the way, I am a homeowner. I have been a long time renter. Both are awesome options – depending on your situaiton in life. See Wojciech above. He is a genious because he knows what is best for him now. He does not listen to talking heads but judges and evaluates the situaiton based on his own finances, goals, and preferences.
    Re: Comment #2
    In your example of the pump, you had to take money out of your emergency fund. If someone does not have an emergency fund they might not be ready to buy. They might need to rent – predictability.
    I’m not anti-homeownership. I’m simply informing renters that they are not financial morons for renting (as some people insinuate). There is a time and a place for everything. If I rushed the timing when I bought my first home I KNOW I would regret it today. But, now I have absolutely no regrets (See Mrs. Money below).
    This post simply claims that homeownership is not for everyone and that, in fact, there are advantages of renting – at least six.

    @fredct
    Awesome. I couldn’t have said it better myself.
    Actually, I’m on vacation and it is driving my wife CRAZY that I’m on the computer right now so I’m glad you properly defended each point because it means I can get back to my vacation sooner.
    Clap, clap, clap. I applaud you.

    @MBAbriefs
    Excatly, “depends on your personal situation”. I completely agree.

  4. Brad Castro says

    You overlooked another advantage of renting – you’ll never be tempted to wallpaper anything. Wallpapering can place a tremendous amount of strain on a relationship, especially if you’re attempting to apply it in a small, confined space, like an entry way.

  5. Realitycheckgirl says

    Nope not all repair bills are factored in. As a previous landlord and homeowner i can tell u that if i had factoref in all the repair bills i had that would have generated a $1,800k monthly rent in a neighborhood where the highest u can go is about $1,500 if u wanted to rent it out and not have it sit for months. So yes landlords often have to swallow the costs of unexpected repairs that can run much higher like foundation, sewer, electrical, hvac, roof etc

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