One of the many hallmarks of adulthood in America is buying a home of your own. After all, having a white picket fence and all that comes with it is the American dream. And if you listen to experts (or even your know-it-all aunt), you’ll never find a better time to buy than right now — while the real estate market is still in recovery and interest rates remain low.
But just because buying a house makes perfect sense on paper doesn’t mean it’s the right decision for you. Here are four excellent reasons to continue to rent — and to ignore the experts who tell you you’re wasting your money:
1. Location, location, location
There’s a reason why these are the three most important factors in real estate — generally, the closer a home is to attractive amenities, the more expensive it will be. In many cities, that means the affordable homes are either in the suburbs or require extensive renovation.
So, if living in the heart of the city and being able to walk to local shops is important to you, then you’re probably going to prefer to rent. Considering the fact that you have to be happy in your neighborhood, as well as your dwelling, this is an excellent reason to forgo home ownership for the time being.
2. More cash flow
The fact of the matter is that you can often rent more home than you could buy with the same money, not to mention the amount of cash you need to have saved up for the down payment, closing costs, and ongoing maintenance issues. If you’re hoping to keep your cash available for a potential business, for ongoing education, or to weather an upcoming career change, then it makes sense to live in a rental so that your money isn’t tied up when you need it.
3. A focus on simplicity
Stuff tends to expand to the space allotted for it. If you prefer to live a modest and simple life, renting a smaller place than you could afford to own is a great idea.
Not only does this force you to think harder about your consumption because you simply don’t have the square footage available for every gadget and gizmo that marketers want you to buy, but it also allows you to simplify your financial life. You’ll be able to only worry about one housing payment per month — rent — and send all the money you save into investments or retirement. It’s a win-win.
It’s a mistake to buy any home that you don’t (or can’t) plan to live in for at least five years — and this is particularly true since the housing crash. And while some renters know for a fact that their lives will be up in the air because of potential relocation or other changes, others may simply feel uncomfortable setting down roots just now.
There’s absolutely nothing wrong with wanting the sense of freedom and mobility that renting provides. Buying a house shouldn’t just be an economic decision — it should also feel right for where you are in your life.
The Bottom Line
Home ownership isn’t the right decision for everyone, which is why it can be frustrating to hear people describe renting as “throwing money away.” Whether you rent, own, or are looking to buy, the important thing is to make your decisions based on what’s best for you and your situation, rather than on generic advice.
When do you think that renting is a good idea?