Most mortgage companies aren’t willing to say this aloud, much less write it down. But you know we’re going to do it anyway.
The truth is: Renting a home is not always a waste of money.
If this is news to you, we get it. There’s a lot of misinformation floating around about the perks of buying versus renting. So, let’s get the facts straight.
First of all, don’t get us wrong — buying a house can be a great investment. We’re big fans of homebuyers. But there are valid reasons why renting might be the best choice for you and your family (at least in the short term).
Here’s what we mean:
When you rent a home, you have far more flexibility. If you’re someone who moves for work frequently or who has a growing family, it might make sense to rent for a while.
Selling a house can be a hassle — especially if you need to move quickly. If you’re already dealing with a job change or the transition from one to two children, replacing your roof to pass inspection is the last thing you want to worry about, right?
Renting also comes with lower upfront costs (usually a security deposit and your first month’s rent payment).
Buying a home, on the other hand, requires an average 10-20% down payment and closing costs, followed by a barrage of maintenance expenses.
This brings us to our next point. When you’re renting, you have very few maintenance costs.
What many people don’t realize about buying a house is that they’re signing up for more than a mortgage payment. When you own a home and the water heater breaks, no one is coming to foot the bill for you. That’s all yours, baby.
But if you’re renting? You get to call your landlord and say, “Hey, this water heater is 18 years old. Could you send someone over here to replace it?” In many cases, that’s a very good deal.
And speaking of good deals, renters can expect fixed monthly costs, whereas buyers often face rising property taxes, HOA fees, and, as discussed, unexpected repairs.
The only constant in life is change, but let’s face it: No one likes being robbed a tax increase. When you’re renting, your monthly rate may change annually, but in general, your costs will stay the same for the duration of your lease.
There are also market risks involved in purchasing a home that don’t apply to renters. The value of your house may not go up if the market crashes or your neighborhood undergoes dramatic shifts.
Buying a home is one of the biggest investments of your life. You want it to appreciate — but that’s not always in your sphere of control.
Of course, we’re not here to argue that no one should buy a house. Again, we LOVE homebuyers. For many people, a home is an excellent long-term investment.
Here’s why, in a nutshell:
- You get to build equity. Unlike rent payments, which go to a landlord, mortgage payments contribute to your ownership of a major asset.
- There’s potential for appreciation. Yes, bad things happen to good people, but generally speaking, the value of real estate increases over time (especially if it’s in a good location).
- Payments are stable. While not all of your monthly costs will be fixed, if you get a fixed-rate mortgage, your principal and interest payments will remain the same over the years.
- You have more control over your space. When you’re a renter, you can’t often paint, renovate, or otherwise customize your home without your landlord’s permission (boo!).
- There’s potential for rental income. Want to become a landlord yourself? You can rent out a room, your entire basement, or even your whole house.
The bottom line: Renting isn’t “throwing money away,” and neither is taking on a mortgage. Both are paying for a place to live — something we should all feel blessed to do.
Consider your circumstances, financial goals, and lifestyle before making a choice. And if you’re ready to pursue your dream home, let’s chat.
