I tend to think owning a home in your twenties or early thirties is over-rated.
Sometimes "sold" means freedom.
There are great reasons to buy, like wanting life to feel stable for your kids, or turning a fixer-upper into a project, or if it makes sense financially. And I mean really makes sense financially for you, not just that you heard owning is a better investment than renting.
Because more often than not, I see friends buying houses because they think it’s what they’re supposed to do. Maybe they’ve crossed other life milestones, like landing a great job or getting married, and owning a home seems like the next rung on the ladder. Or maybe it’s appealing simply because everyone else is doing it.
Here’s why it’s over-rated: a house ties you down. Which can be great if you really want that. But what if a fabulous opportunity comes your way, one that requires you to move? Owning a house — and likewise, owning a lot of stuff — can deter you from taking that opportunity. A house and stuff weighs you down. Maybe in a good way, like an anchor. Or maybe in a not-so-good way, making it feel impossible to move, becoming one more barrier between you and living that dream. A barrier, by the way, that we often forget is a choice.
That’s why I rent an apartment for now, to keep those doors of opportunity open. But lately I’ve noticed that even renting feels constraining. For one, I’m in a lease that would be expensive to break. I’m allowed to sublet — so long as I don’t call it that — and though working through that process with management would be a hassle, it’d also be worth it if an opportunity doesn’t match up with the timing of my lease (which is likely).
Renting also makes me subject to all sorts of sometimes-arbitrary rules and worse, paperwork (which I abhor). For instance, my building allows dogs to live here, but my dog can’t visit unless I’m willing to pay a $430 fee, which I found out when Cooper came to visit for two weeks. It doesn’t take much for me to feel trapped and claustrophobic, and feeling like I can’t live my life on my own terms kicks my flee instinct into high gear.
I’ve never had much patience for bureaucracy or red tape or doing things a certain way just because it’s how they’ve always been done, and long-term travel amplified that. You’d think I would’ve become more patient after backpacking in Africa because it’s the queen of doing-things-the-way-they’ve-always-been-done-even-if-that-doesn’t-make-sense, but the experience itself seems to have trumped that. I thrived while living and traveling on my own terms, and later, working for myself and being productive within my own framework. Even nine months after moving to Washington, D.C., it’s still difficult for me sometimes to live by other people’s rules — which, of course, you have to do when you work for a company and rent an apartment.
This, I know, is one of my weaknesses, and I need to either get over it or create a different kind of life for myself. But even when you work for yourself and live in a yurt, sometimes you have to navigate bureaucracy and deal with people who rub you the wrong way to make it in this world. The best I can do is continue to make life choices that help me avoid those obstacles.
And so I ask you, which gives you more freedom: renting or owning?
Update: Because of this blog post, Nightly Business Report featured me in a clip about renting vs. owning.
Photo credit: Flickr’s Rochelle, just rochelle
I’ve been going over and over this question for the last year. I bought my house because I saw my life headed in a direction (read: family) that it didn’t end up going in. Now that I’m free from a relationship and the potential responsibilities that might entail, I’m feeling stifled by home ownership. I’ve considered moving, traveling, quitting my job, and several other options that seem impossible because I’m tied into a mortgage and the responsibilities of owning my home. Renting would free me from those responsibilities, and might even allow me to save more money. On the other hand, I know that if I really want to do any of those things, I can still do them as a home owner. It will just take me more time and effort, and some creative planning, to get there.
Good points here — I’m interested to see what you decide on!
You know, for a long time I regretting buying a condo in the height of the real estate market. It tethered me to Seattle even as I watched my dream job melt away. Luckily, I bought within my means.
The upside is that I adore Seattle and my neighborhood, my location allows me to live a car-free lifestyle and I have a view of the water. (Which white people, apparently, really really like.) (http://stuffwhitepeoplelike.com/2008/02/04/51-living-by-the-water/)
After a refinance though, and as I slowly pay down my mortgage and sloooowly build back the equity that the market wiped out, I am finding that I feel more free. Not free to move, obviously, but financially freer. My home payments are now below what it would cost to rent in this neighborhood. And, nobody’s going to raise rent on me, nobody can kick me out, and I can actually envision paying off the entire mortgage. I could rent this place out for more than my mortgage and pocket the difference. Now that’s freedom!
But for the most part, I’m with you: Ownership all-too-often is not a silk ribbon tethering you to a place but a heavy debt-laden chain around your neck. Saddling up with debt makes you a slave, it is the opposite of freedom.
I love being a homeowner. Even after last week when the AC completely pooped out, the Internet, TV, and phone went out, and some of the tile in our kitchen broke, I still loved our home. I knew that going into home ownership, there would be things needing replacing, etc… So perhaps homeownership can be an anchor for those who buy for the wrong reasons or who don’t accept that costly things break and must be replaced. My husband and I knew all that and accepted that. We moved out of our rented condo and into our first house in July 2009 when we were 24. And I have never regretted it. We love our house, even with it’s “problems” as all homes have. It is ours to put holes in the walls and tear up flooring. And I don’t feel it has gotten in the way of our plans. We bought this house with a tentative plan that this would be our place for the next five-ish years, and then, who knows. Tear this house down and build another, move, renovate. But we know the plan is flexible, depending on the market and our jobs. We knew that all going in, and we could not be more happy. So I suppose it is all about expectations and reasonings. It is a commitment, so buyer beware!
I couldn’t agree with you more! I’m actually more nervous about buying a home one day than having children haha.
I don’t know that I’ll ever own a home again; the thought of even entering a lease on an apartment makes me nervous. We almost gave up on our dreams to travel indefinitely because our house wouldn’t sell (it took over a year and a BIIIGGG drop in price to finally make it move), so we were, trapped. The thought of it, two years later, makes me queasy still!
I used to feel the way you do, i.e. that buying a house tethers you to it. But when I married into a house and convinced my husband to keep traveling and living abroad with me, I found the house actually made me feel freer than anything else. It’s nice to know that we have a place, somewhere in the world, that is our little spot. We have had lovely friends as tenants and their rent goes towards our mortgage while we live lightly in sublets or travel cheaply around the world. And luckily, our house is within our means (as another commenter pointed out – crucial!) and our city’s real estate values keep going up. I didn’t know home ownership would take this turn but it has been an unexpected and happy surprise.
Hannah — This is such a good point, and I can relate. As I scheme for my next career break, I’m thinking more about subletting so I have a place to come back to. Starting over entirely was right for me last time, but now that I’ve found where I want to be, having roots is really appealing.
If I didn’t have Marc to stay home and watch over things, I would seriously consider subletting our current place. I love it and the rent is cheap, and I wouldn’t want to lose it (the waiting list is around a year long at this point). Having to move back with my parents or find a place from overseas would not be a fun prospect if I were on my own.
True — Sometimes it’s easier to have the support of a partner when it comes to this.
I have to agree with Hannah. We were on the road for so long that when we came home we were too free. It was almost overwhelming. Other people we met that had rented their home while traveling were yes, tethered to the house, but not necessarily in a bad way. They had their own spot in the world to come back to!
We’ve just bought our first home and I don’t feel any more tied down today than I did three weeks ago. I’ve learned from other travelers that you can use anything as an excuse not to follow your dreams, to travel, to write, to do whatever. There are 10,000 reasons not to do something but only one to do it- because you want to! You can let anything hold you back.
Owning absolutely gives me the most freedom. As a renter, I’m subject to the whims and fancies of my landlord, who is really not very good at his job. As an owner, if I want to change the carpet or redo the kitchen or paint all the walls purple, I’m free to do that. Of course, I’m happy living in the place I’ve chosen and have the financial comfort to buy, and that’s not a situation everyone is able to live with. And if I want/need to move or take an extended trip, I’ll hire a property management company to rent my home for me. It’s really pretty straightforward, and I’m building wealth/equity in the meantime (assuming the market I’ve chosen continues to be relatively stable.)
Renting. I do not suggest buying a house unless it is brand new! Too much expensive upkeep.
Personally, I love renting. Some day far in my future I’d love to buy a historical home (1920s or older, preferably 1850s or older) on a farm, but for right now, I can’t fathom owning a home. If you own, you have to find someone to watch it for you if you go overseas for a year or two, or you have to sell it or rent it out. Not to mention that in many parts of the country, owning is far, far more expensive than renting, and to me it just doesn’t sound like a good deal. I *would* love to have a garage and a yard, though, so maybe renting a house is in my future.
Also, it has seriously crossed my mind to go back to Korea for two years to save up the money to buy one of these: http://www.tumbleweedhouses.com/
Wow…Really great food for thought and insightful comments. Owning a home, with a family of 4 kids has been very stabilizing for us. Now, though, we’re heading toward an empty nest, with very high taxes. So rental in a neighboring town might be the way to go. The only problem is when you leave you have nothing to sell – a good thing in a bad market, but potentially a money-losing proposition in a good market. We have found owning a home has also allowed us to have a nest egg that we probably wouldn’t have without. I guess in that way, for us, tethering has been good!
What’s next…we’ll see.
On another note…being a freelancer and being on my own means I have to use self-discipline, something I don’t have a great reserve. A little framework from someone else might be helpful. Oh the search for balance!!
Since our chosen way to travel is cruising by sailboat, in one sense we always have our home with us. On the other hand, when our home needs a refit (as now) renting suits us well, particularly as we were able to find a place that we could rent month to month (to month to month…).
We have owned a home, for a while – we bought strategically, at pre-construction prices, in a location we thought would be popular, so that we could sell at a profit when we were ready to go cruising. There are many different reasons for buying a home! And it did give us a nest egg to work from that kept us going for a while.
Freedom is probably not so much in the choice between renting and owning as in the way you plan for and use the choice you make.
I have the same exact feeling as Hannah. I LOVE to travel and have friends and family all over the world. I will be spending a month in Africa next year and as much as I love going there I love coming back to my house. I don’t feel any loss of freedom at all in my house. I felt less free renting because the landlord/ management company could enter, or have service workers enter, also future tenants. I didn’t feel freedom of moving (I HATE moving). Not only moving, but looking for a new apartment, a new down payment, more paperwork, etc.
I bought a house that was a fixer upper and CHEAP (the price, not the house…it’s solid). If ever I wanted to go anywhere for more than a few months I can rent out my house (the mortgage is so cheap I could pay it each month with the rent money, even if paying a management company…which I wouldn’t need because I have family that would manage it and who would just keep any profit after the mortgage is paid). The property also has a studio apartment so if I didn’t want to rent the main house out I could rent the studio, and even rent from that would probably cover my meager mortgage.
I too love having a “home-base”. It actually makes traveling that much sweeter because it gives me a sense of anchor and I don’t get that “aimless wondering soul” feeling that I think I might get if I came back to a different place after each travel. I can come back to familiarity. I think I might feel deflated after traveling then coming back to a brand new place. Also, what is stopping me from living in an entire different city or part of the world for a few years anyway? Right now the estimate rent on my place is twice that of the mortgage taxes and insurance put together. Renting it out just seasonally would probably be enough to pay each year’s mortgage. If anything I would feel more inclined to try living somewhere else because I know I have my safety net. I love my parent’s and grandparent’s homes and I have SO many wonderful memories there, but it’s not the same as having my own place and I would feel sad being around so many memories constantly, even if they are good.
Also, I’m lucky if I can get more than a month away at a time anyway….how many people really do that anyway? Most people travel for a few weeks to a month at a time so I don’t see how an apartment would encourage longer traveling. It’s mainly peoples’ jobs, family, and responsibilities that hinder traveling long-term. I’ve known of people to rent their main living quarters and purchase a vacation home for the very reason that they love the idea of having something that is theirs for nobody to take, and it will always be there no matter where in the world they may be living, they have something permanent to come back to.
One day my mortgage will be paid off (and hopefully the taxes and homeowners insurance will be manageable without renting out…FL has limits on tax and insurance hikes so I can kind of predict the wort-case scenarios of the future…and they’re not that bad in my area).
So didn’t mean to go on a tangent. Point being if traveling or living in different places is your passion you will find a way to make it work with owning a home, or even making it work to your advantage.
Lucy — These are such great points! Good reasons to own 🙂
I love this post. I’m strongly in the “I prefer to rent” camp – but then, that’s easy when I have finally found a great rental in a great town (Vienna VA). I just look at the real cost of ownership – which is the cost of the house you buy, PLUS the huge interest (that you pay over time) and the cost of fixing things. . . what a big financial investment. It appears that we’d pay a similar monthly amount to own a house in this town . . . but only IF we bought the absolute worst, most fixer-upper place. Places that are even only partly updated are out of our budget.
Another benefit of renting – it makes it safer for me to eventually quit my day job and pursue my own business full-time – because we can easily move to a different town or different rental to save money if we want to. If we had to sell a house first . . . well, that would be a bit more challenging.
Finally, we do love the flexibility – a reasonable landlord will be open to making exceptions to a lease. And we’re not ready to commit to buying a home in a town we’re not sure we’ll remain in for more than a few years.
I like the word you use here — makes it “safer.” Sometimes the safer option is the smarter one.
Thanks for sharing this! It is good to think about the benefits and disadvantages of renting or owning. You need to be sure that the place you pick will work for you in the long run as well. However, it is true that a contract and a mortgage can tie you down to a place!
I appreciate what you mentioned about feeling like you can’t move if you purchased a home. I have felt that way as well. However in my opinion it is much better to purchase a home. It is a better financial decision because you are building assets and building wealth. Worst comes to worst you can rent out your home and move somewhere else.
Owning completely gives me the most flexibility. As a tenant, I’m liable to the impulses and fancies of my proprietor, who is truly not great at his occupation. As a proprietor, in the event that I need to change the rug or re-try the kitchen or paint all the dividers purple, I’m allowed to do that. Obviously, I’m upbeat living in the spot I’ve picked and have the monetary solace to purchase, and that is not a circumstance everybody has the capacity live with. Furthermore, on the off chance that I need/need to move or take an augmented excursion, I’ll contract a property administration organization to lease my home for me. It’s truly really direct, and I’m fabricating riches/value meanwhile (expecting the business I’ve picked keeps on being generally steady.)
This post is such an eye opener for me!
I do get your point, but if it is freedom that we’re talking about, I personally prefer having my own, simply because after it is paid, I’m done! I can easily modify parts of it without fret of having to pay damages or what. It feels a lot secured owning one, but I really do appreciate your concerns.
Thank you for this post! This is something to ponder 🙂
Goodluck on everything and more power to your blog!
Its always better to have your own home. The freedom of renovating the house is in your control. You can also maximize your budget because you’re not paying a rent anymore.
I’ve been both a renter and a homeowner, and I’ve noticed that the home owners who get the most out of their home are the ones who buy in the best school districts/best neighborhoods. That usually means that buyers have to extend themselves to get into those neighborhoods or they buy the best they can afford in less-than-the-best neighborhoods (essentially overpaying for the neighborhood they live in). People need to do what’s best for their families, so if renting works, then rent. Now that my family rents, we have so much peace. We don’t worry about the furnace, water heater, carpets, appliances, property taxes, maintenance, etc. We rent in the best school districts and best neighborhoods, and we move when the town no longer suits our needs or changes for the worse. That works for our family. We want to live near our son and his eventual family and kids one day. So, we don’t want to be stuck in a home somewhere like my parents are. If they rented, they could have moved closer to either of their children anytime they wanted after retirement. But, at least their home is paid for and in a decent neighborhood.
I have the same exact feeling as Hannah. I LOVE to travel and have friends and family all over the world. I will be spending a month in Africa next year and as much as I love going there I love coming back to my house. I don’t feel any loss of freedom at all in my house. I felt less free renting because the landlord/ management company could enter, or have service workers enter, also future tenants. I didn’t feel freedom of moving (I HATE moving). Not only moving, but looking for a new apartment, a new down payment, more paperwork, etc.
Hi Alexis,
Very nice of you for sharing such an important topic.
All persons have their personal priorities for which he/she works, we like clear our milestones of life slowly but perfectly and when it all gets over the main thing comes, getting a personal owened place. Owning is best according to me as it gives you a relax feel and also you are free to do whatever you like on your property.
Owning is important before starting a family life as standard rules but some have problems and can’t do that but for them also nowadays there are many options. Renting always gives you the tension of rent giving, maintaining, and as well living according to the land-lord. So, its best to have your personal owened place where you’ll be free to live with your family according to you.
Thanks for posting it.
Have a nice week ahead.
~ Harshwardhan
I’m a simple man actually. Right now, I don’t have kids so I’m not looking into owning a house anytime soon but when I probably do, that’s when I should maybe start widening my options. Let’s see. Anyway, thank you for sharing!
Owning a home is better than renting. Renting is just a waste of money, you’re paying a house that you can’t own and you are not also allowed to refurnish the area.
I agree! I just made the move from renting to owning because it was time for it. Renting made more sense for a long time. I didn’t know if I was going to stay around this area and I travel a lot for work. It’s better for me to know that if something happens while I’m gone, my wife can call somebody else because it’s their responsibility and that gives me the peace of mind that I need. Now, with my family growing and I’m more settled into my job, buying makes more sense. Great article!
Thanks so much for all of the information. There are definitely some real pro’s and con’s to both but at a certain age with jobs being an anchor themselves, it does make sense to purchase a home. Debt is another huge thing to consider however, one could just as easily fall into debt at any point. Thanks for sharing!
Absolutely…. I agree with Sandra.
But Sandra… there are lots of people who cannot afford to buy even a single room home.
But, they can definitely do hard work to get a good accommodation of their own.
Renting is beneficial for those who do not have to stay for a longer duration.
Thanks for the nice post!! It is really worthed!!
Great points here. I must ad, travel is becoming more and more popular and way more accessible, in which case there are two arguments, owning a house can fund some of your travels and on the other hand, it can be a handbrake. Thanks for sharing!
Your feeling of having constraints, even with renting is understandable. There are inherent limitations in each situation, as you’ve shared.
I know this is an old article but is still relevant!
As a real estate agent I discuss this alot with people. There are always times when renting is better than buying. As you said, buying has the potential to ‘weigh you down’. But it all depends! For example during a real estate boom, your home purchase could gain 10-15% of its value in just a couple of years giving you the opportunity to cash out and making money from the whole transaction. On the other hand many people don’t quite think of all that is entailed with buying a home and the variety of costs associated with it. Taxes, HOA fees, maintenance costs, etc etc etc.
To answer your question though, renting can certainly offer you more freedom to move, although you’ll need to seriously think about your lease agreement if you have an idea that you’ll be moving in the near term.
Buying can offer freedom too if the market is right.
In My point of view, my job is not a stable one to stay in one constant location. it will change time to time so According to that I have changed my house also, So I can’t buy my own house when my job is an unstable one, for me, renting is more comfortable and feeling a lot of freedom. if your in rent it don’t mean you have given up your freedom it up to us only