Renting Versus Buying: An Open Discussion

For years I ran under the assumption that buying a home was the automatic choice for anyone in the real estate market. Renting a home was merely a stepping stone, or a last resort if you couldn’t afford the full purchase. This assumption has recently come crashing down, with more and more acquaintances, peers, and even real estate tycoons selecting the rent option.

The following article represents thoughts for and against both buying and renting:

Why should I rent?
Bottom line: it’s affordable. It is, and will always be, cheaper on a monthly budget to rent a home than to buy it. For the majority of home-users who don’t have excess funds, the ability to live in a place that fits their financial constraints will always be number one. This simple and fundamental fact is unavoidable, and its relevance cannot be overstated.
A close second to affordability is manageability. Because the title, tax burdens, etc. are not in the name of renter, the multitude of responsibilities involved in maintaining a home and keep/increasing its property value has nothing to do with the renter. They lock into a price and duration via contract, and little outside of that contract really concerns them. If something big breaks, often the owner or property manager has to foot the bill.

Why should I buy?
Because it’s an investment. You know all those rich people that you know? They’re rich because in one form or another, they invest. They own things…homes, cars, businesses…and those things they own make them money. Independent of their daily work schedule, their money works for them. The paycheck is not the only form of income.
Buying a home also provides a protection against the unknown. If unexpected medical bills, a lawsuit, or even death occurred, something exists in your inventory that can be leveraged to create big dollars in a hurry. Of course leveraging your equity in a home to pay for something you didn’t want to happen may not be a happy thought, but here’s a happy thought: Leveraging that same equity or resale value for something you do want to have happen (getting out of debt, a second home, lasting wealth…)

Why shouldn’t I rent?
Renting may be a workable short-term fix, but it provides nothing in regards of retirement or long-term stability. Like an inexpensive oil change, it feels nice on the wallet, but going too long without addressing the larger issue of long-lasting independence will ultimately result in a train wreck if things aren’t proactively taken care of.

Why shouldn’t I buy?
The first thing out of any new homeowner’s mouth is something to the effect of: “Wow, I didn’t realize how many small expenses and unplanned things I need to take care of. This is pricier than just the mortgage.” Owning a home puts you behind the eight-ball for just about everything…taxes, HOAs, insurance, repairs, etc. With homes, there is always something new that requires work and/or attention. Always.
These four paragraphs were intentionally written to be inconclusive. There is no concluding statement that declares that this option is better than the rest. Hopefully all four thoughts are persuasive, yet objective. From here, it’s up to you…

Written by Clif, freelance writer for RPM East Valley.