6 times renting a house is the smart money move
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Mortgage rates are below 3%, which means it’s time to buy a house, right?
Not so fast. Before you start scrolling Realtor.com or Zillow, think about how buying a home and taking out a mortgage could benefit you. Equally important, consider why now might not be a good time to become a homeowner. Here, we’ll cover six times it makes sense to keep renting.
1. You negotiate financial security
If your rental situation allows you to be financially sat enough, without worrying about whether you’ll be able to pay your bills, buying a property can throw a real wrench into the mix. While it’s easy to think, “Oh, I have a lot of money now and I can afford a mortgage,” it’s not that simple.
Buying a house means more than a mortgage payment. This means you are responsible whenever the sump pump or water heater fails. This means paying for windows when the original heat seals deteriorate. This means receiving a notice each year telling you if property taxes have increased. Homeownership means you pay more for home insurance than renter’s insurance and often spend more on utilities.
2. You have better things to do with the down payment
Maybe you started saving for a down payment, but now have priorities that have nothing to do with owning a home. Maybe you’ve always wanted to open a food truck or start your own sportswear brand. Maybe you’re hoping to take a year off to write a book, or you want to reunite the old band for one last round of gigs. There’s nothing wrong with redirecting that down payment towards realizing your current dreams.
3. You are a bit of a wanderer
Some of us don’t stay in one place for long, and that’s okay. If you’re someone who moves frequently for your career or any other reason, owning a home is a huge barrier to the flexibility you need to do your job. Also, as anyone who moves frequently will tell you, once you’ve paid the closing costs and the realtor’s fees, it’s easy to see a good chunk of your capital disappear.
4. Your relationship is on shaky ground.
Even interest rates below 3% shouldn’t tempt you into buying a house with someone you’re not sure you’ll be with in five years. There are no guarantees no matter how in love you are. But if you’re fighting with your partner, not trusting them, or seeing red flags, it’s better to rent than to feel locked in buying a property together.
5. Your lifestyle would change in less than pleasant ways
Let’s say your rental neighborhood offers a gym and pool where you can work out before going to work, or you’ve become so friendly with your neighbors that they feel like family. If leaving what you have feels like a sacrifice, take the time to consider if it’s the right decision for you.
6. You feel like you “must”
Nothing means you have to buy a house – ever. If the only reason you’ve considered becoming a landlord is because it’s expected of you, let go of other people’s expectations. If someone tells you that home ownership is the best way to build wealth, smile and know they’re wrong. It is possible to accumulate equity in a home, but it is also possible to lose equity. If that sounds like a lot investas both carry risks, costs and benefits.
Your life is your life, and there’s no one way to do it right. For some people, buying a house is a must, a way of feeling grounded. For others, there are more pressing priorities. It all comes down to finding what makes you happy and figuring out the best way to create financial stability, even if you’re paying rent.