Buying vs Renting: Which is Best for You?
We’re nudging renters to breakup with their landlords, but we’re not anti-renting and we have nothing against landlords.
The buying versus renting debate is somewhat pointless. Renting or buying isn’t good or bad. Here’s why: Different lifestyles have different demands, and for some lifestyles, renting make more sense. For others, home ownership makes more sense.
It’s that simple.
There’s no such thing as throwing money away or wasting money on rent. The money you pay on rent gives you a roof over your head, flexibility, and freedom. Owning a home also gives you a roof over your head, flexibility, and freedom—in a different way.
You can take a financial stance about home ownership vs renting, but it really comes down to picking the option that really matches the kind of life you want to live. And your financial goals should be centered on that.
Which is Your Story?
Do you want the flexibility of being able to try on new locations over the next few years, the freedom to relocate easier for a new job, opportunity, or travel, or the ability to be location independent as a creative entrepreneur?
Or do you want the flexibility to be able to travel while maintaining a stable home-base, provide a stable home for your children, the flexibility to have friends and family visit for more than 7 nights or have more than 3 visitors in the pool (bye bye guest wrist-bands), or the freedom to paint and decorate your home your way?
Which of those stories sound more like you? Do you value location flexibility or stability? How about your family?
Home ownership isn’t the American dream for everyone, but for some it’s the greatest example of it. Buying a home isn’t a measure of financial success. You shouldn’t follow that dream if it doesn’t make sense for you. However, if the structure of your life and lifestyle point you toward home ownership, there is a great deal of value in owning a home. It’s all about what you need and value. Either decision can be the best decision for you.
Rule of Thumb
Here’s a rule of thumb: Buy a home if you plan on being in the area for at least five years. And another one: The 28% rule says your housing costs should be no more than 28% of your gross income (before taxes).
The bottom line is: sometimes it’s smarter to rent and sometimes buying makes more sense. It’s better to learn about home buying, learn the rules, crunch the numbers—then do what’s best for you.
This has been a quick tip by LandlordBreakup.com, the website for smart renters. If you're a renter who is curious about how you can turn your rent payment into a mortgage payment, check out our home buying course and home ownership plan for renters. Check out the course.