Owning a home isn’t the right decision for everyone. There are plenty of circumstances and reasons for someone to rent a place to live rather than buy. The problem is, sometimes people get stuck in the mentality that they should rent, based upon things they’ve heard, but never really questioned or thought through.
Nobody can (or should) force you to buy a home, but it can’t hurt to at least take a look at the flip side of the coin when it comes to the most common reason you may have for not buying one.
So take a look at the top 6 reasons renters give for not buying a house and consider if it’s something you truly believe, or if buying might just make sense for you when you really think about it:
1) “I don’t want to pay for or do repairs…”
Let’s be clear, most people don’t want to pay for or do repairs! And yes, if you own your own home, you’re definitely responsible for anything that needs to get fixed. But you’re not entirely off the hook as a renter a lot of times either! Depending upon your landlord and the terms in your lease, you may be responsible for the cost of some repairs up to a certain dollar amount or type of repair. You may even be responsible for some maintenance and upkeep.
So if this is your reason, make sure you only agree to sign a lease that puts all of the responsibility and cost of repairs and maintenance on the landlord. That said, getting your landlord to take care of a problem can be tough. Some landlords hate paying for repairs and avoid it as much as possible. At least when you buy your own place you have control over what gets done, when it gets done, and can even choose to do things that make the place better and more enjoyable for you.
2) “It’s cheaper to rent…”
You’d think renting has to be cheaper than buying a home, but it’s not necessarily the case. It can be, but buying a home can also be cheaper than renting. It depends on rents in your area and what you could buy in your area. Don’t just assume that you couldn’t possibly buy a place of your own for less than what it would cost you to rent. Look into whether or not it’s true, especially with rents increasing so much and so quickly in the recent past.
3) “House prices are too high right now…”
Real estate prices almost always feel high and as if they couldn’t possibly go any higher. People in the 1970s could never have dreamed their house would be worth what it is today, and likely felt prices were too high back then. Same with people in the 1980s, the 1990s, early 2000s, etc. Eventually, the value of whatever you buy will be higher than it was when you bought it, even if you bought it at a peak. Sure, you could wait for a dip in the market and try to buy then, but that usually means other economic issues at stake may make it impossible for you to buy, or the cost will be higher in other ways, like interest rates.
4) “House values could go down and I’d lose money…”
If only you could look into a crystal ball and see the future, it’d be a lot easier to feel OK about buying a house. Well, that depends upon when in the future you looked of course! Because if you looked into the future you’d most likely see that it’s true that the home you bought is worth more money unless you happened to look at a brief period of time that values happened to go down. It’s true; they do. But the secret is to just not sell when they’re down if you don’t have to. Just hold on for a while and the values will not only bounce back, but they’ll exceed where they were before they took a dip.
On another note, think about how often do rents go down?! If the housing market takes a dip, do you think your rent will go down in the future?
5) “I need a bigger down payment…”
You do need some money for a down payment and to cover closing costs, but it may not be as much as you think. It certainly doesn’t have to be 20% of the value of the home you want to buy. It could be as low as 3% to 5% depending on the type of loan you apply for. A more significant down payment may be helpful in getting you a better rate or lowering your payments. But that takes time, and home prices or mortgage rates could go up while you’re saving, putting you as far out of reach as you started.
6) “I want the freedom to move…”
If you know you’re going to move in the near future or like to move frequently, then buying probably isn’t the best idea for you. But if you just don’t like the feeling of being tied down, you may want to think about buying rather than renting. After all, renting a place ties you down as well. You still have to sign a lease, and you may not even be allowed to break it or may have to pay a penalty or the remainder of the lease amount if you do move. If you own your own home, you can decide to sell it (or become a landlord and rent it out) whenever you want.
Hopefully, this gives you some food for thought. Whether you decide to rent or own a place of your own, you’re doing it having considered both sides of the coin!