Monday, August 07, 2017

The Benefits of Renting a Home

This is not my beautiful house.

A few weeks ago Nathan and I happily renewed our lease for the third year in a row. We truly adore our little house. It's not perfect (a bigger kitchen would be nice, and I'd love a second bathroom) but overall these 900 square feet are comfortable, well-kept, and fulfill all our basic needs. Our rent is a steal, our neighborhood is friendly, and we're located in the heart of Wilmington, close to the bike trail, an awesome park, and multiple grocery stores. Plus our landlady was totally cool with the fact that we built a chicken coop and moved 16 of our BFFs (Best Feathered Friends) into the backyard, which was much appreciated. 

In fact, our living situation is so great that you might wonder why we don't just go ahead and buy our house, or one like it. While I will admit to having a bad case of real estate fever and regularly scrolling through Zillow, we're not in a rush to buy. This is mostly because we can't afford to, but also because there are some very real benefits to renting, which we're happy to enjoy for a few more years. 

If you think renting is pointless or are lamenting your own lack of a down payment, allow me to offer a counterargument. It might just give you a new lease on life.

First of all, renting isn't "throwing away your money."

Most people view homeownership as an investment, banking on the fact that their home will most likely increase in value over time. When they're ready to sell it, they'll make a profit. The flip side of this is that those of us who rent are not able to do the same. Instead of pouring our money into a house that will (eventually? hopefully?) pay us back, we'll never see it again. Hence the idea that we're throwing away our money.

This is always the first argument against renting, and it’s simply not true. You’re exchanging your hard-earned cash for a place to live, eat, and sleep. The last time I checked, those were all very valuable things. Plus paying your rent on time is an excellent way to build good credit, which will benefit other areas of your life. Finally, most people are paying someone else for the privilege to live in their home, whether or not they own it. I pay a landlord and call it rent; you pay a bank and call it a mortgage. Both of us have a roof over our head, and that’s what really matters. 

Renting gives you freedom and flexibility. 

My husband recently went back to school full time. In three years, he'll have a brand new career and a lot more earning potential. While I'd love to stay in Wilmington forever (building a community and making friends when you're an adult isn't easy) we need to keep our options open. Until he graduates and lands a job, we're not ready to risk a mortgage. Thus, we rent. 

When you’re renting, you can move whenever you want, within reason. If you get an amazing job offer three states away, you can accept it. If you realize your next door neighbors are backyard nudists despite the low fence, you can run. If the city installs a brand new set of train tracks inches from your bedroom wall, you can sleep soundly knowing a new rental is right around the corner. Sometimes owning a house is great, while other times it can be an albatross around your neck. Renting offers flexibility, and that’s a valuable commodity. 

You can call the landlord when something goes wrong. 

A few weeks ago, in the middle of an intense July heatwave, we came home to an uncomfortably warm and stifling house. It became clear very quickly that our AC wasn't working, so we apologized to our houseguests, opened the windows, and called our landlady. She in turn called the person who installed the unit a few years ago, and he managed to squeeze us in the very next morning as a favor to her. Our AC was up and running in less than 24 hours, and all it cost me was a generous tip. (A Sunday morning fix during the hottest weekend of the year deserves as much.) The moral of the story? I stayed cool while someone else solved the crisis. 

Do you know how to fix a leaking water heater? How much you’ll spend on a new roof? What the property taxes are in your state? I sure don’t, and that’s fine with me. While renting can be more expensive on a monthly basis, that extra cash means you don’t have to be the one who worries about getting things fixed, repaired, or replaced. Part of your rent pays for peace of mind, and that’s priceless. 

You're renting because you can’t afford a house. Yet. 

Thanks to YNAB, the best budgeting software in the world, we've got a modest savings account and a category optimistically titled "Dream Home." It currently has $0 assigned to it, which is the main reason we're happy to keep renting for now. 

You might remember a little thing called the housing bubble, which popped a few years ago. While there were a lot of complicated reasons for that crash, a major factor was that people were taking out huge loans to buy homes that were beyond their means. One of the biggest lessons that budgeting has taught me is the necessity of living below your means and embracing your limits. You can't have something just because you want it; instant gratification only feels good in the moment. This is as true for that extra piece of pie as it is for homeownership.

Despite all the benefits of renting, I would very much like to own a home one day. But I want to do it right, which means waiting until our careers are settled, our income has stabilized, and our down payment is secured. Until then, I’m happy to rent my heart out and reap the benefits of this freeing, flexible, and freewheeling lifestyle.

Are you an owner or a renter? How old were you when you bought your first house? My goal is to own within five years by the time I'm 40, which seems extremely do-able.