Renting > Buying? The Case for Renting pt. 2
Last week we told you the first few reasons renting may be a better choice for you than owning. You can read that piece here. Today we wanted to pick up where we left off:
4. Personal vs. Home Investment
The most consistent concern people have, when it comes to renting, is that the money they fork over to landlords each month goes into someone’s pockets, for someone else’s benefit.
That perspective is debatable, not just because the money you are freeing up can be invested elsewhere, but because finance isn’t a purely mathematical pursuit, no matter how many numbers or equations get thrown at you.
Indeed, finance is also about understanding and articulating the emotional and personal reasons why you choose to spend or invest your money in one way or another. For example, choosing to rent an apartment might mean living closer to your job, your friends and family, or the activities you love, the things that really get you out of bed in the morning.
If choosing home ownership means putting yourself further from any or all of these, then you deserve to ask what personal or emotional return you’re getting on your investment. This brings me to my final point.
5. Homeownership is a Journey, not a Destination
Just because you are renting an apartment now, that doesn’t mean you can never ever own a home. On the contrary, many people currently renting are doing so with the intention of saving enough money — in cash or the aforementioned investments — to buy a place later.
If you are a renter, especially a young one, this is your golden opportunity to figure out what it is that value in a home. Do you need a detached house? Or do you think you’d enjoy a condominium? How big would this place need to be? And what sort of neighbourhood do you wish to live in?
Living alone or with roommates is very different than living with Mom and Dad. You will likely develop skills and tendencies as a renter that will pay off immensely when you finally find a home to buy.
As a renter, I learned to really look after my own finances, to properly budget my expenses, to find and understand insurance policies, and to fully appreciate the power of a dollar.
The cost outlay of renting will likely require the use of credit. So long as you’re servicing your debts responsibly, you will be building up a history of reliability that will become very important when you apply for a mortgage. And most important of all: I also learned how to really cook.
This is by no means an exhaustive list of reasons why you should consider renting, but I do hope it help clarify what ought to be considered when you make such an important decision.
Be sure to check out our blog next week, when we discuss the reasons why it might be time to move from renting to buying. As always, find us on Facebook, Twitter, and Instagram and let us know what you think! Until next time 👋