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This is a guest article by Amber, the writer behind Blonde and Balanced, a blog about striking a balance in life, health, and money. Blonde and Balanced was included in my list of personal finance blogs you can trust.

Old-school financial gurus sometimes claim that renting is wasted money or that renting doesn’t provide a return on your investment. But renting is starting to gain a little more street cred in light of the recent housing market crisis. Sure, renting doesn’t provide a return on investment, but it also doesn’t come with that risk of loss like home ownership does. There are pros and cons to both types of housing, but many people are realizing that renting isn’t as financially criminal as we used to believe.

I’ve been sending off a monthly rental check for about 5 years. Renting isn’t part of my long-term plan, but it has been a great tool that helped me find my financial footing before taking the leap into home ownership. In fact, I plan to buy a home within the next couple years, but, until then, here are just a few reasons why I’m happy I rent:

Cheap rent. I realize this is not the case everywhere (just ask that “rent is too damn high” guy), but, here in Kansas City, rent is relatively cheap. My rent expense accounts for just 9% of my net income (living with someone helps, but when I lived alone, it accounted for about 21% of my net income). This allows me to save a substantial percentage of my income, putting me in a better position to (hopefully) throw down an awesome down payment when I do buy a home.

Falling home prices. For many of us Midwesterners, buying a home has always been a feasible option –- we don’t have those crushing home prices that you see in some cities. But even around here, housing prices continue to drop, just in time for me to buy my first place. If I had purchased a home right out of college, I probably would have paid more, gotten a higher interest rate, and stretched my finances way too thin. Now, my dream home is well within my financial reach – quite possibly at a fraction of the cost.

Preparing for home ownership expenses. I’m beating my future broken air conditioner to the punch by creating a home maintenance savings account now rather than relying on credit cards when I’m a homeowner. I refuse to become house poor — ever. I believe that premature home ownership is one of the biggest causes of getting buried in debt (I’ve been down that road and I don’t even want to go back). Plus, I want to enjoy decorating, landscaping, and making my new house a home without stressing about spending beyond my means. Having a decent down payment is great, but the financial burdens of home ownership are more than just paying the mortgage.

Financial stability. When I first started renting, I was in debt. I had an $18,000 car loan. I was living paycheck to paycheck. I often worried if I could pay my rent. I was spending more than I earned. Eventually, I wised up and straightened out my financial situation and renting is the tool that allowed me to do this. It wasn’t renting that taught how to be financially smart, but renting is such a small financial burden – in comparison to owning – that it allowed me to fix my finances instead of digging myself into a deeper hole. Had I jumped into home ownership when my finances were so messy, it would have been a heck of a lot harder to dig myself out of that disaster.

No strings attached. While my homeowner friends have spent many weekends on home maintenance activities, I spent my early twenties traveling and enjoying free weekends. Not to say that homeowners can’t have fun, but I’m pretty happy that I spent most of my twenties without the responsibilities of home ownership. I know building and maintaining your own home is rewarding, and I can’t wait to do that in the future, but let’s just say that I wouldn’t have been that great of a homeowner at age 23.

What are your thoughts on renting vs. buying?

Flexo’s note: As a long-time renter, I see the value of renting for many people — more than those who may realize. Contrary to what real estate agents and some financial planners believe, the house you live in is not a good investment. You also can’t ignore the costs of owning a home that build up over your lifetime, and these costs are almost never figured into the “cost basis” when people sell, as they should.

Photo (Kansas City Library): calebdzahnd

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