A couple of weeks ago, my mother sent me, my aunt, and one of my cousins this article from USA Today:
Right now, my mother is renting a house while she figures out where she wants to live next. Last August, she sold her two-story home after falling and breaking her back in four places. She wasn’t sure where she was headed next, but she knew that she couldn’t be tied to a multi-story house as she got older.
As my aunt and cousin responded to her email with “hell yes” and similar reactions, I realized we weren’t alone in our non-homeownership. But one of the things this article overlooks is the flexibility of renting. It’s not just about the financial aspect of owning versus renting; you can find many calculators online that purport to figure that out for you.
But for Don and I, the reasons not to own a home stack up much higher than the reasons TO own a home:
- Greater flexibility – Six months ago, my son was accepted into a much better school about an hour from where we were living. Initially, we’d though that we could commute, taking turns picking him up from school to share the driving burden. Two weeks into that, we realized we’d have to move – and gave our landlord 60 days’ notice that we were leaving. Thank goodness we had that option, and didn’t have to deal with selling a house, wondering if we could sell it for enough to pay off the mortgage, and prepping for showings. And, when we’re ready to move to the Keys, or travel for a time, we don’t want to have to wait for a good time to sell.
- Ability to adjust – As we run towards achieving our goals, we’ve debated moving into a much-less-expensive home to put more money into savings. We wouldn’t have that option if we owned our home. Our current rent isn’t cheap; but should we decide that we’re not hitting our goals fast enough, we could easily move into a less-desirable home for a time to amp up our savings.
- “House poor” – Growing up, my parents at one point owned an absolutely stunning home overlooking Lake Tahoe. However, between maintenance, insurance, association fees, and mortgage, they used to say they were “house poor” during that time, because too much of their assets and income were tied up in the house.
- Unpredictable expenses – In the last year as renters, we’ve had a hurricane damage several areas of our roof, and a dishwasher that went bad and took 400 square feet of flooring with it due to a leak. Neither of those instances cost us anything beyond our rent; but they cost the home owner plenty. Whether it’s a new air conditioning system, a new roof, a leak that causes foundation damage…homeownership comes with large-scale potential costs that could pop up at any time.
- More time – As a homeowner, I found myself constantly doing little projects around the house. It wasn’t unusual to spend a weekend tearing out the bathroom and replacing everything, or repainting the kitchen cabinets. Now, as a renter, I still do a lot of DIY projects – but they’re typically less intense, like painting curtain rods, and they’re not about improving the property’s value, they’re just about what I would like in my space. Not having to worry as much about home upgrades and modifications frees up time for other pursuits.
- Timing – As a homeowner, you can’t always sell when you want to, You may be stuck trying to rent out in a down market because you can’t sell, or worse, may be stuck living somewhere you don’t want to live anymore because you can’t sell.
How not to buy a home
As I wrote about last week, I’m in the middle of trying to eliminate “supposed to” from my life. And one of the huge “supposed tos” I had to get rid of was owning a home. Traditional wisdom tells us to grow up, graduate from college, get a good job, get married, and buy a house – in that order. And while I didn’t follow the correct order, I did absolutely buy a home (okay, a condo) as soon as I possibly could; at age 21, if my memory is correct. I was a junior in college and couldn’t stomach the thought of finding a roommate to afford a nice place; but I could afford (thanks to working full time while in school) the down payment on an itty-bitty condo not far from the beach in San Diego.
Several years later, I moved to Japan, and began renting out that condo. I had also acquired a rental property in Florida (because a house is ALWAYS a good investment, or so I was supposed to believe). After years of rental management headaches, tenant horror stories (even a stripper slash prostitute who tried to blackmail me), I finally sold the condo in 2012 and the Florida house in 2015. Both were short sales, and both were at a huge loss, despite years of paying interest on mortgages. I ended up living in the Florida house for about 5 years and commuting more than an hour each way just because I couldn’t sell it for enough, and the rental market was such that I wouldn’t have come close to covering the mortgage if I rented it out.
And yes, I realize that not everyone has the same experience. I had been unlucky enough in both instances to buy at the absolute height of the market, and then need to move or sell when the market was soft. A divorce and some other factors played into it as well, but either way, neither property was a good investment in my future.
Feeling inadequate because you don’t own a home?
Every so often, someone who doesn’t know me well (but knows I make a decent salary and come from an upper-middle-class family) will be shocked to discover that I don’t own a home. But I think these assumptions reveal a common bias in our society. If you’ve achieved a certain level of success, of course you *should* (aka supposed to!) own your home. As I’ve discussed, there are solid reasons, both financial and aspirational, why we don’t currently own our home. If you’re in the same boat, own it! Are your dreams really that tied up in an inanimate object? Stop feeling inadequate about not owning a home – it’s a perfectly rational choice. Once you understand that a great many people who DO own their homes are doing it just because they’re “supposed to” – it becomes easier to defy the accepted logic.
There are many who would argue that a house is more than just a property – it’s a home, a place to raise your children. And if you choose to own your home for those reasons, that’s totally fine. Just don’t do it under the guise that it’s a good investment.
As for me, I can create a “home” wherever I am – whether in a tiny concrete barracks in Japan or an RV at a campsite. I value travel and experiences more than I value having the same “home” for 20 years running. If those values resonate with you, leave a comment and let us know!