Pretty much from the moment we start breathing and listening and talking and living and watching the things that go on around us, we get hounded by this notion that we haven’t made it until we have stumped up thousands of pounds, tied ourselves into a thirty-year loan and become a homeowner. Seriously. Reminders that this is successful are everywhere. We hear it from our parents, we hear it from society, we see it in romantic movies and we see it celebrated on social media when – one by one – our friends post those generic photos of them holding a set of keys up in front of a door.
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Millennials choose to rent for a reason. Here is a list of reasons that could make renting your next home a better personal decision than buying.
As such, we are led to believe that renting (that dirty word) is just a pitstop we all must take on our path to buying. After all, why would anyone want to chuck their money away on rent when they could be chucking that money at something with equity?
However, thanks to the impossibly high house prices, bidding wars (caused by it being a sellers market), stupidly high taxes, and a cost of living that is now so grotesque: more and more people are battling just to get by. Millennials are buying homes like the generation before. The “Renting Is Bad” narrative has changed. A lot. We’re talking about that age-old American dream of a lovely house in the suburbs, with a white-picket fence and a rocking chair on the porch being put on hold due to the high prices, and who knows for how long.
As far as we can see, though, this decision is not a bad one. Quite the contrary, in fact. It seems to be a super-duper smart decision. Of course, the stigma of renting hasn’t quite vanished into a puff of smoke just yet. So, to help those that are still sat on the not-so-white picket fence, we have pulled together a list of reasons that make renting your next home a way better personal decision than buying.
Reasons To Rent
(Spoiler alert – they are not all financial)
Buying Is No Easy Path To Walk Down
We read a poll recently that said buying-slash-selling a home is more stressful than a) filing for bankruptcy, b) getting a divorce and c) losing a loved one. Now, whether you would put the stress of buying a home at the top of that pecking list is up for debate, but it doesn’t change the fact it is a top-four contender. It is the stress of physically moving. It is the stress of researching what the best neighborhoods are and where the best schools are located. It is the stress of having to negotiate with the seller, and pull all your financials together for the mortgage lender and the stress of getting yourselves ready for the move only for it to fall through at the last second. That’s just from a first-time buyer’s point of view too. If you’re looking to sell your current home and buy another, well, the stress and risk and length of time is dramatically increased. But the biggest stress of all is caused by a lack of control. Life throws curveballs; it hits us with a new set of circumstances and, in that sense, it is way less stressful to break a twelve-month rental contract than it is to try and get out of a thirty-year mortgage deal.
Death & Taxes Are On Par, Remember
One of the most regrettable mistakes most homeowners make (especially first-timers) is not understanding just how many unexpected costs come with owning a home. We’re talking about legal fees, insurance costs, maintenance and repairs, and the dreaded property taxes, which differ depending on where you are looking to live. Sure, if you’re looking to buy a home in Hawaii for $180,000 or so, then your annual tax will be as little as $490. That’s fine. That’s manageable. But let’s say you are looking to buy a home of the same value somewhere like, oh we don’t know, New Jersey. Do that and you’ll be slapped with a tax rate of almost 2.5% – and it will stick to you – meaning you’ll have to stump up well over $4,100 a year. Now compare that to renting a home. There is none of this to think about. No fluctuating taxes to consider, no rodent control costs, no repair jobs that are going to set you back thousands, and no fees that you didn’t sign up for when you were first handed your rental agreement. You just have your rent, and that is going to be more consistent than Roger Federer in the mid-2000s. That is nice. Super-nice.
Renting Is A Freelancer’s Friend
More and more people have embraced irregular incomes. We know that sounds insane, but it’s true. We’re talking about people stepping away from employment to become freelancers, people being hired as self-employed contractors, solopreneurs and entrepreneurs and people that have found themselves in the gig economy because they would rather chase their dreams than sell double-glazing for a living. For these people, renting is a much safer and much more stable option to have, especially when rent day comes around. You are at the mercy of your landlord when you rent, and that is a much better place to be than at the mercy of a huge first time home buying assistance corporation who, let’s be honest, is a corporate machine that cares about the color green and nothing else. Couple this with the fact that rocky housing trends are not done with just yet, the economy is still unsure about the political landscape, and the fact mortgage rates have grown by 0.5% in the last six months alone, and you may find renting while you build a bigger emergency fund is the better choice.
Never Underestimate Being Flexible
Once upon a time, people were born in a small town, they lived and worked in said small town and they were buried in that small town. Nowadays, though, people want to explore the world. They want to feel free. They want to do things on a whim because their uncaged hearts told them to. That isn’t quite as easy to do when you’ve bought a home. Buying a home means choosing and settling on a location and then, dare we say, staying there for a few years at least. So, if you’re thinking of buying because society tells you this is what you have to do to be successful, but you aren’t totally sold on the location, or you feel that niggle of doubt, then rent and wait it out. If you don’t and you decide to buy, you’ll probably find yourself going to sleep with a head full of regret for quite some time. Imagine what it would be like to wear concrete shoes. It’s the same thing. That get up and go is gone. That chance to suddenly overhaul your life has vanished. It could be that you meet a guy or a girl on the opposite coast and want to move there, or you get a job offer in a faraway place, or any number of things – the worst thing that could happen is a long and arduous house-selling process putting all this up in the air.
Got 99 Problems But Maintenance Ain’t One
No one on earth finds maintenance fun. No one. Not even people who do maintenance for a living find it fun. And the best way to remove yourself from this chore is to rent instead of buy. Which insulation is best for the attic? Do you want sockets or pipes? Is that a flathead screw or a Phillips head? How come there is no water pressure suddenly? If you have the answers for all of these (and more) then great. But if you are stumbling over your own words and not sure what any of this means, save yourself a giant headache – in terms of both time and money – by renting your next abode. One of the things that all homeowners need is an emergency fund that can cover some of the most expensive and most unexpected maintenance repair jobs. We mentioned this above, along with rat control, but it goes way worse than this. Drains get blocked, water leaking through the ceiling, drafts, broken appliances; all of this can stump a homeowner. But, when you rent, all you need to do is put a call into the landlord or property manager and wait for them to come and fix the problem, and on their dime too.
Don’t get us wrong, there are plenty of benefits to buying your own place, doing what society deems normal and climbing that property ladder. There are loads of benefits. But it isn’t the only route, as you can see. So, if you are torn between buying and renting and what is best for you, then we recommend you dismiss any ideas that buying is better and enjoy the more relaxed way of life that only renting can bring. Less stress, less ties, less risks, less permanence and less responsibilities. What’s not to love about that?
This is a contributed post.
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