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Five Reasons I’m Happy I Rent

This article was written by in Featured, Real Estate and Home. 27 comments.

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

Updated March 11, 2011 and originally published March 8, 2011.

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About the author

Amber is the writer behind Blonde and Balanced, a blog about striking a balance in life, health, and money. When she's not freaking out about her upcoming nuptials, she's usually writing blog posts, working out, or near a calendar, crossing off each passing day in anticipation of warmer weather. View all articles by .

{ 27 comments… read them below or add one }

avatar 1 Ceecee

Sometimes it seems you don’t own a house, it owns you. Renting has more appeal all the time.

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avatar 2 TakeitEZ

I find renting more appealing as well. I would only buy a house if I knew for certain that I was going to stay in one location for the rest of my breathing years and not as an investment.

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avatar 3 tbork84

I am on the younger side of things and look at rent as a fixed expense as I start to build my net worth and savings. Plus living and working in and around Boston is not cheap. Luckily we were able to find a great place with superior live-in landlords, so for now, this definitely works. Meantime I can plan and save for eventually buying a house in the area.

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avatar 4 cubiclegeoff

The Boston area is definitely not cheap, and finding a decent place for a decent price is extremely difficult. I gave up.

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avatar 5 tbork84

I realize that I have a very loose definition of eventually. We are one of the places in the country that experienced the housing price bubble, but hasn’t had a very large correction.

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avatar 6 cubiclegeoff

That’s why I bought a house when I did. The Boston area will continue to have a demand for land, at least within 495. And there isn’t much land left to develop. That’s shown by the relatively small correction.

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avatar 7 cubiclegeoff

I got sick of bad landlords and places that were not great but cost a bundle. So I bought a place. It is cheaper than renting in my area for the space we get, and although I have to deal with some maintenance and other hassles, I don’t have to deal with too much noise from neighbors (seems like every place I rented, no matter what, had some noise coming in from neighbors, from hearing normal conversation to hearing the tv), a crappy landlord, a landlord that doesn’t respond to maintenance issues, and I can do what I want inside. Owning isn’t for every situation, but it was the best option for me.

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avatar 8 Sarah

Renting or buying really depends on a lot of individual factors. Right now, my fiance and I are renting. He’s getting his phd, and we don’t know where we might end up going 3-4 years down the road when he either gets a job somewhere or a postdoc position. Buying a place when we have a pretty good chance of having to move in the next few years just doesn’t make sense.

That being said, I do find myself looking forward to the time when we will own a home. We live in the middle of a city, so we have no yard, no place to have a real garden other than inside on our windowsills. We have to deal with noise from neighboring apartments. Our kitchen is tiny, and there are just so many things you can’t fit in an apartment that you could in a real house (for instance, a big ‘ol deep freezer).

Renting is the best choice for me now, and it does have its benefits (like that gym downstairs, and people there the pick up your packages), I know I’ll also enjoy many things about owning a place too.

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avatar 9 Anonymous

Of course, young people should not buy a home. But lifetime renting is not the solution. When I retire, I’ll have no mortgage. Lifelong renters pay for housing using their Social Security benefits, and elect politicians who promise to continue cost-of-living increases to cover housing increases. Housing costs should fall when you retire, not increase.

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avatar 10 gotr31

Interesting comment, I agree!

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avatar 11 tigernicole86

I’m prone to agreeing with this article because all through college and afterwards, I rentedor shared a house with friends. When there were 6 of house living in a 4 bedroom house and the rent was only $800/month including utilities, it was a way feasible option.Now, my boyfriend and I have found a house(and we too live in the midwest but the price of this house is really low even considering all the work we’ll have to put on it). I admit, apartments are easier but I’m excited to have this house now. :)

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avatar 12 Anonymous

One reason I’m happy you rent: I want to get into real estate investing.

No, but really, renting does make a lot more sense than people say. It’s easier to move, less expensive (generally) to heat and cool an apartment than a home, and not having to pay for repairs is pretty awesome if you’re looking to regulate your cash flow.

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avatar 13 Anonymous

I’m renting right now and loving it. I’m living in the city and never have to drive which is nice. But I am planning on buying a home soon. Just waiting for the right one to come my way.

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avatar 14 Anonymous

Everybody in this post is just giving subjective reasons why to rent or not. I myself am more pragmatic, for me it comes down to personal finances first. I rent because I don’t plan to live in this same city for more than 3 years and running the numbers it was clear that renting was the best option.
Run the numbers by yourselves using the NYT Calculator:

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avatar 15 Anonymous

As a military member, my wife and I move frequently. We know many people who insist on buying despite the gypsy lifestyle that being in the military creates: moving frequently. We have not bought, and have been glad. We’ve seen other military members foreclosed upon, in short sale situations, and even unable to sell and forced to rent for a great deal less than their mortgage payment while funding two households. Its led me to develop more of a pragmatic view of housing. We won’t buy until we either have an extremely viable “investment” property that we could easily rent for supplemental income after departing the area, or when we move somewhere we intend to settle down long term. You’re very right. A home is not an investment, its just a place to live. Having too much equity tied up in your house and not enough liquid assets only made the economic collapse of 2008-2009 worse than it needed to be.

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avatar 16 Anonymous

I’m with Tony^ on this one. I would definitely buy a house right now if my employment let me do it. unfortunately, I move roughly every two years… Renting gives me the flexibility to live close to my work locations and leave after my lease is finished. This isn’t to say that I never want to settle down with my family though. I can’t wait for that stage of life but right now, renting is clearly the best option for me.

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avatar 17 skylog

i currently rent, and i have no problem with it in any way. when my situation allows it, however, i will certainly look into buying as i do have the feeling that i am not “getting anything for my money.”

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avatar 18 Anonymous

I have owned a home since I graduated college (bought my first house at age 23). For me, it did a great deal toward helping me mature and become a responsible adult. I also paid down the mortgage very aggressively on that first house and sold it in 2010 yielding a huge chunk of cash. Owning so soon has put me on the path of becoming financially independent.

I have some rentals also, and I am currently in the process of buying more, so I definitely don’t look down upon anyone that rents – I need them! I am currently actively scooping up more rentals.

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avatar 19 Anonymous

Great Post! This is yet another example that there are almost NO hard and fast rules when it comes to Personal Finance.

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avatar 20 rewards

“Sure, renting doesn’t provide a return on investment”

I don’t know how you can make this blanket statement given the opportunity costs of owning a home. While renting, I’ve been able to invest the money I’ve saved from not having to pay for mortgage interest, property taxes, home owners insurance, higher utility bills, repair bills, and time spent personally dealing with repairmen. Those investments have provided a nice return on investment.

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avatar 21 Anonymous

@Rewards She is correct in saying there’s no ROI directly associated with renting.

@Flexo You were spot on with your “the house you live in is not an investment” article. Corelogic announced today that 23% of Americans are underwater on their mortgages. I hope they all know how to swim : /

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avatar 22 wylerassociate

i’m renting an apartment for right now, my wife and I are saving up to buy a house in the next 12-18 months. It all depends on a person’s lifestyle and what they want.

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avatar 23 Anonymous

Renting is where I want to be right now as the housing market continues to deflate. Especially here in San Diego CA. It is easy to buy a home that is way over priced. Thanks for the valuable insights.

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avatar 24 Anonymous

I like the points you make here about being financially responsible in relation to renting. Sometimes the “American Dream” of owning a home has gotten some in trouble. The truth is renting can help with keeping our financial goals in check. The current housing/buyer’s market proves too that it’s not always worth the investment, especially those needing to sell their homes right now.

It’s not that home ownership is bad, but it is important to be smart about it. Renting can help to keep debt down and help make good financial decisions.

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avatar 25 Anonymous

There’s pros and cons either way. Renting is a good option if you’re not financially able to buy a house. It’s the time to save up your money and fix your credit to get ready for future home ownership.

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avatar 26 4hendricks

I have owned a home since I was 19. I still traveled, and had fun – but I also was able to sell 3 of my homes and to live with no mortgage on our primary home, and have a weekend home in the mountains. Where we live rent is as much as a mortgage payment. Yes home values have dropped, but we really stayed with in our means. You have a good argument – but it just wasn’t for me.

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avatar 27 Anonymous

We have done both and though this is a purely personal decision, I can say that renting is better for us. Not that there is none with renting, but there is a lot of instability with buying, particularly regarding financing, home repairs, expenses, etc. Especially in this market, home ownership is not flexible. If your situation changes, it is not easy to sell your house in most areas or you may be underwater, making it impossible for the time being . This may change in the future, but I do not want to be held hostage by a house. But as mentioned, this situation could be different according to each person and their individual desires, needs, and financial situation.

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