Renting vs. Owning
Adam and I have been renting for a little over 3 years now. We love the apartment we live in now. It’s close to the grocery store, coffee shops, restaurants and just a few miles from downtown. Lately we’ve started talking about BUYING. It’s a scary thought and I’m pretty 50/50 as of late. Quitting my stable, full-time job definitely contributes to my doubts but I also really love sending in our (cheap) rent check and calling it good. Leaky roof? Meh. Broken A/C? Buy a new window unit. Scratch the wood floor? Eh.
But then my thoughts drift towards a bigger space (our one bedroom apartment isn’t exactly spacious), an office, an area to spend outside, and accommodating guests! The idea of renovating can go from sounding adventurous to downright terrifying. Decisions, decisions.
What has your experience been like? Do you rent or own? Pros and cons for either? I’d love to hear your thoughts.
Office photo found here. Bedroom photo found here.
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Comments (44)
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Love all of your pros and cons. I agree- the flexibility is nice. We do know that we want to live in our area for awhile (if not for forever) so that makes owning seem appealing. It’s also REALLY cheap. I don’t think we realize how awesome it is to rent (financially). It’s the home repairs that scare me!
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I own my home and, for me, I love it. The repairs have been very expensive – but they’ve been done (unlike some of the major repairs needing done in my last rental!). I love the security of knowing I never have to leave unless I decide to. It feels important to me to have somewhere which is truly *mine*.
Personally, I don’t find the financial risks that big. If you’re struggling to pay your mortgage, you know about it and you can find a solution – if your landlord’s not paying the mortgage, the first you’ll hear of it is when you’re evicted. For me, the bigger risk is commiting to a place – if you find you hate the neighbours or the commute or whatever, it’s much easier to end a lease than to sell.
All that said, if all you’re wanting from your next move is office space, a garden and somewhere for guests to sleep, you can get that from a rental. Those aren’t really reasons to buy – at least, not in my part of the world where owning and renting costs about the same. Buy when it because important to you to own a piece of property, that’s all.
And best of luck either way.
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This is true! We could definitely rent out a bigger apartment. There’s just something appealing about having a stand alone home with my own yard. Privacy is very scarce around here.
When it comes to renting, I’d rather have cheap rent to allow us to save for other things – I wouldn’t want to pay a lot to rent a bigger place. It’s not even necessarily the “buying” part that intimidates me…it’s the idea of everything breaking at once haha!
Definitely pros and cons to both but I loved hearing that you love owning!
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Love this! We bought our house 9 months ago after renting for 2.5 years. We love it! Justin most definitely misses being able to call the landlord to fix or address whatever issues come up, but I love feeling like I can set down roots. In our rentals, they always felt so temporary. But in our house, its our’s so I feel like I can finally spend money and buy things since I know I’m investing in a space I’ll have much longer. Since we’re young and bough our home on one income (I was still in school!), we live very much in a starter neighborhood. Don’t terrible, but definitely not our forever home :) So excited for you guys! And if you ever need a mortgage broker, I know a pretty handsome one that can get you some good deals ;)
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Love hearing all of that, Katie!! I think my decision to weigh the options all changed when I decided to freelance full time sooner that later – I never want payments to be a burden and right now it’s so stinking cheap. Maybe delaying it a bit will help me feel better about it all. I agree, though, I can’t wait to feel more rooted!
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Oh definitely! Our decision to buy one on small income was a tough one for sure, but rooted in our efforts to continue to live below means. So no that I’m done with school and we have more than doubled our household income, we have a home that we love and can more than afford. And if anything ever happens with one of our jobs…we’ll be more than ok! So don’t let the unpredictable nature of freelancing get you down :)
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Yes!! This is key. It makes me anxious when people hit their max and take out a loan for as much as possible. Heart attack! I admire how you two handled it and will remember that as we move forward. I might email you some questions later in the year :)
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Oh, we’ve rented for over 6 years now and though I would like a house of our own one day, I’ve come to terms with the fact that it’s going to be quite some time until we do buy, due to schooling & knowing that we’ve got maybe a year left where we are, then move somewhere new for two or so years and then move for school again!
I definitely appreciate that we don’t need to worry about landscaping, plowing/shoveling, most repairs, although we’ve not always had great landlords that try to accommodate, either. I wrote a little about this on my blog a few months ago. I think our generation is going to be a little different than our parent’s when it comes to buying….
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I totally relate to that post of yours!! Thanks for sharing it. I agree- I desire certain aspects of owning a home but there’s also some parts that freak me out.
I’ve had a lot of people say “just rent a house or something larger” but it gets expensive and you’re just throwing that money away! At least in our little place, the payments aren’t large.
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I never liked paying hundreds into something I couldn’t keep, so I bought my house 3.5 years ago. And yes, quitting my job while paying a mortgage was pretty scary, but I love my little house. Yard work has been the biggest pain for me as I kill everything I plant. And there is a leak in the bath tub faucet I have no idea how to fix. But 99% of the time I’m really happy I own my house.
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That’s awesome to hear, Sarah! Encouraging comments like that make me immediately think, “yeah I can do that!”
We just need to save, save, save and not rush.
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My husband and I bought our first home a year ago in May after 4 years of renting together, and him renting on his own for the last 18 years. Having a place that is “ours” is so huge! We had nothing but problems with our last landlord…so bad I was having panic attacks over it, so it was a relief to find a little house that we could afford. One thing we did that was so helpful was we bought brand new from a development. The house lacks the charm and character that we really wanted, but for the first year of owning anything that went wrong was fixed by the contractors. They fixed our floor, repaired the cracks in the drywall as the house settled and fixed the dishwasher. Buying new saved us the stress of replacing the roof in a few years or needing a new hot water heater or dealing with previous owner’s pets and that sort of thing. Being able to decorate and design in our own space is also pretty huge for us. After owning our own home we would never go back to renting. So glad we made the decision we did. :)
Good luck to you as you move forward and decide what to do!!! :) Its an exciting process for sure. -
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Oooh, love this topic. Andrew and I rented for 2 years before buying a house. Honestly, we would have stayed in our apartment if we had not been surprised that a baby was on his little way :) We adored our apartment and the stress free easy living that came with it. I was hesitant about buying a home, but now that we are here – I wouldn’t trade it for anything! Having a space that is ours felt like such a huge step, and building a home for our growing family has been more rewarding than I can say. It’s perfect! I so recommend the idea of waiting until you are officially ready – because taking your time and finding exactly what you want is so, so worth it.
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Tricky little baby :) ah I can’t wait to 1) see more photos of your place and 2) see photos of him once he’s born.
I agree-taking it slow will be very important for us. No need to rush! Unless someday we get a surprise like you did LOL!
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I fantasized about home ownership the entire time we were renting. We now own, but we were fortunate in that we inherited the house (small and in a slightly shabby neighborhood, but no rent or payment except the year-end taxes. Yay!)
OK. So our situation is EXTREMELY fortunate. That said, I would advise anyone to be DARN SURE they want to own before taking that step.
The roof: Our place needed a new roof and cheap wasn’t an option. It’s red clay tile, which is immediately more expensive and there was some rotten structure that needed replacing. So long, $20,000. I hardly knew ye.
The plaster: There was some water damage to the plaster. I knew that. It can be temporarily repaired, as we did, to make a room ship-shape for a holiday dinner. But within a month, that plaster just keeps falling apart until all the water-damaged portion is completely removed and replaced. I took on the DIY of doing this job in our closet myself (all square pieces, in a closet where no one would see my bad judgement). Took me three weekends of backbreaking work. It would have been better to pay someone to do it and spare my time for things I like doing. Only now we have three more regions to do including a curved area from wall to ceiling, plus texture. So long, thousands more dollars I didn’t know I had.
The yard. The city we live in requires that the front yard be green in spite of local drought conditions. We could xeriscape, or simply have new sprinkler system & sod put in. We could do it ourselves, or we could have someone do it. Either way, buying the materials ourselves would be thousands for both front & back and is far more work than one realizes from watching those DIY shows where they do the whole thing in a weekend. And even with drought-tollerant plants, our water bill is something that most people cringe at. With no leaks! So long $8,000 I didn’t really need a new computer and software and stuff for business anyway. (depending where you live, water may not be such a big issue. Let me say, in our area, keeping a lawn green without automatic sprinklers is downright impossible. As a tour of our neighborhood will show)
Oh yeah, the leaks. Every darn thing is our own responsibility. With smaller things like leaks and a little patching, painting, and touching up, this isn’t such a big deal. With the hot water heater, well, we know a guy. With things like windows…that’s a phone call. All our windows were replaced about 20 years ago, but now the replacements are starting to fall apart. This summer, we could only open one window in the livingroom. When we have the money (see above), we’re going to have to have that looked at. Maybe that’s something people can DIY, I don’t know. All I know is that every DIY I’ve tried beyond gardening has been SO much more work than I thought it would be that it would have been a savings for me to stay in my home office working on freelance jobs and have someone else do it.
And entertaining? We have a large back patio with firepit, grill, and some furniture. Nevertheless, people actually come over less than once a month. Maybe we’re lame. But from what I hear “entertaining” is one of those things that people think justify a big money spend, but then doesn’t happen as often as they think.
TL;DR? Our next door neighbors rent the house they’re in and they get 100% of the benefits we get of owning a house, with 0% of the hassles.
I haven’t even gone into detail about the dozen rats that were living in our ceiling, the possums that dug up our new grass, the raccoons that made me afraid to go out to the garage at night because they were SO territorial over our avocado tree, the every-four-years $4000 tenting for termites, or the 40 lb. beehive we had removed from inside our living room wall, the wasted weekend of me patching the giant hole they had to cut to get at it, and the extra $1000 this added to roofing costs – eventually.
BE SURE, is all I’m sayin’.
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DAMN! Haha see…THAT freaks me out but thank you so much for your honesty. I suppose lots of research and making sure we buy the right house someday will be worth it but you definitely make the idea of sticking it out here for a bit longer not sound so shabby.
I can’t believe some neighborhoods require lawns to be green! In a drought?? Lame.
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we bought a house after renting for a while. since drew is an engineer and i have built a house from the ground up, we were very picky about structural integrity and general floor plan. we were less picky about aesthetics. we picked a safe neighborhood with good highway access. we chose a house that was under our approved budget, but is still spacious and nice (we only pay $100 more per month than we were paying for an apartment). we made sure to have a real yard.
in the long run, we’ll have to update the LOOK of the house – but likely not do any major repairs. this allows us to do updates as time and budget allows.
i like being able to turn as much of my yard as i want into a mini farm. i like being able to grow grapevines up the side of my house without anyone bitching about it. i like being able to paint, strip, tear out, replace whatever i damn well please whenever i damn well please. i also really enjoy the feeling of knowing that it is MINE. i was very poor as a kid, and i never had that feeling until now – and i thoroughly enjoy it.
i wouldn’t trade back, ever.
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I LOVE what you guys prioritized. Makes so much sense. And I love your house. I get so annoyed with people who choose based on cosmetic appearances and decor.
When we’re closer to buying I’m going to pick yer brain!!
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We just moved from renting near downtown to the ‘burbs, and despite our much longer commute to work, we LOVE it. We love having gardens and landscaping and SO much space and a garage. We used to occasionally have people to our apartment, but now we’ve entertained a ton because we have so much space.
We made sure that we chose a house that would fit our family if it grows, with a big focus on school districts so we wouldn’t need to think about moving or pay tuition if the city schools weren’t acceptable at that time. It’s not new (1980), but it’s a style we like that was move-in ready. Major updates had been made within 5 years (a/c, roof, windows, basement joists, radon system, furnace), so we should have some time before making major repairs. Of course since its double the size of our apartment, we need to get some furniture, but we’re making do with what we have and slowly adding the pieces that we need.
While we’ll always miss being so close to downtown and the short north, we love downtown powell as our substitute. We still work downtown so it’s nothing for us to stick around after work if we want to go somewhere.
When you are ready (read: downpayment), the first thing you should consider is which area of town that you’d be happy in. You can change a lot of things about a house, but you can’t change it’s location. We looked online for months, but only had to look at 10-12 houses before we found ours (which I admit is probably not typical for people).
Good luck – when you’re ready!
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Loved your advice, Val! Definitely picking location will be key. And staying modest – we don’t need a ton of space but just a bit more. I’m glad to hear you’re loving your house!! That’s the most important thing.
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I purchased a condo about three years ago, and shortly after, found out there were issues with the developer of the project. Because of the issues, and because of some of my own naivety, I have had trouble refinancing to take advantage of the incredible interest rates, and none of my fellow owners have been able to sell their units. All that to say – do your research. Think about the worst case scenario (and I’m a half-full kind of gal!), and whether or not you’d be able to live with it.
Phew! Being an adult is hard work! :)
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That is such a bummer! We’ll definitely need to get someone in that can assess any issues beforehand. I really am so clueless when it comes to that stuff (which feels so out of my control)!
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Allie I really love this post. When I was a little girl, my family had a cute little house in the ‘burbs and I loved it. After my parents split when I was 13, my dad and I lived in an apartment together and ever since then, I’ve just been hopping around from rental to rental.
I remember the days when I had a yard to throw the softball in with my dad, a playground to swing on, a garden that my mom and I would play veggies in. I loved the privacy and the comforting feeling that the neighbors next door were always there for you.
I really miss living in a house. I’ve been thinking about it a lot lately, especially with Jaxson and hope to move into something within the year. For now, the condo is really nice because we have a park right in the front yard and it’s in a very safe area but honestly, I look at Zillow before bed most nights because I can’t wait to have a house of my own.
Go for it! You guys will make great homeowners. :)
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Love this comment! I guess I don’t fully realize that owning a home can be attractive because of nostalgic reasons! The memories I have of our house growing up isn’t even about the type or model…it’s the people! Thanks for sharing :)
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So…pros and cons.
I bought a house in Bloomington, Indiana when I got my first full-time job. I still have that house. Because I couldn’t sell it without losing money. Fortunately it roughly breaks even as a rental and I’ll likely hold on to it for a while longer for that reason.
I bought a house in Columbus when I moved here because I tried renting and after a few months I realized that once you own a house it is VERY hard going back to renting. My house is now one of the things that is keeping me here when I know I could have a better job, more opportunity, etc. if I were willing/able to move.
So, if you’re planning to stick around for a while, buying a house can (and probably will) be great for you. Especially now. Interest rates are at an all-time low, the housing market is still in pretty bad shape , etc. so I’m sure you can find a good deal and come out ok as far as all of that is concerned.
I also wouldn’t worry too much about the costs of maintaining a house vs. renting. Especially if you like doing a little DIY work here and there. Just make sure to do your homework and find a good home inspector (in this state they don’t have to be licensed, so make sure you find a good one) who will be able to uncover any weird, potentially expensive issues before you close.
What I really would consider (and carefully) is how willing/able you are to remain in one place for an extended period of time. That’s been the main thing for me as far as buyer’s remorse goes (at times), although I still don’t really regret buying vs. renting.
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Adam – SUCH a good tip. We definitely see ourselves here for a long time so I feel better knowing that that is your #1 piece of advice. Do you like living in Clintonville? Do you like renting out property or would you opt out if possible?
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Absolutely, the reason I bought this particular house is because it’s close to everything. I love the neighborhood, it’s right on the bike path (so I can easily get downtown or to campus), right around the corner from the farmers market, etc.
I don’t know that I could go back to renting (at least not easily). I like having a garden, being able to make changes to things without going through a landlord and also just feeling more ownership, connection to the community, etc. All of those things are pretty important to me.
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I used to believe home owning was the American Dream, but after owning a home, I believe the American Dream can be a fancy loft or a studio apartment.
I love my home and I don’t want anything else. It is hard working with freelance paycheck but we had to save up. If we could save up for a certain amount of time that tested our financial status and discipline, so we knew when the time came. I have saved a lot of money with home-owning, like composts, gardening, and solar power that was limiting in an apartment.
Really funny story- we would drive by this cute little neighborhood a block from our old apartment. I would always let out one of those big romantic sighs and thought I would love to live in one of these storybook homes. It was one of the houses I would pray for and even asked for the feeling to go away if it wasn’t meant to be. 1 year later, I can’t believe I drive by my old apartment and actually live in the house I was hoping for.
The only thing I suggest is getting a new house. Old homes have their charm but ours was a complete re-do, and one year later we are still remodeling. It would have been nice to have everything shiny and new. However the upside to renovating is getting everything custom (with a few headaches along the way).
There are pro’s and con’s and regardless of what looks good on paper, do what is best for you and your family.
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Those are seriously amazing pieces of advice. Thank you, Diana! I have heard from a few people now that buying a newer home is better. I don’t know how new we’ll be able to afford but will definitely invest in an inspector and look for upgrades.
I love hearing that you’ve been able to compost and use solar energy. Amazing. I’m excited about the challenge and to focus on spending our money wisely. It’s important.
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It’s definitely a BIG decision …. But I’ll tell you this:
We *just* bought a (fixer upper) 4 bedroom/3bath – and our mortgage is cheaper than the rent on our 1bd apt (which went up ever so slightly every year) + the storage unit we had (since we had previously downsized our living space).
I’m totally fine with investing $$ in making this place livable, if it means I have a reliable LOW mortgage payment for years and years. And I can finally get all my books out of storage :)
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This is such great advice and will be SO important to me. Keeping a low monthly payment really does make it easier. Then you can still save to make improvements and fixes. Did you have to give up on preferred location to keep your payment smaller or did you focus on a large down payment?
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Living up here the choice between renting vs owning is a hard one due to monetary reasons. A 1 bed condo in decent condition, 1 hour away from Vancouver is around $180k. A home out in the same area can be around $450k – $650k. K and I were paying $1200/month to rent a two bed new condo no utilities included.
Problem out here being on a single income, is places I could afford to rent are so far out from the downtown core, that I wouldn’t be able to get a job. (Homes closer to Vancouver can cost you upwards of $750k.
As much as I want to own my own home, having a single income with those house prices just aren’t feasible and really aren’t even in the realm of possibility when they want 10% down at the beginning.
Prices out here are ridiculously expensive (not just housing) gas, food etc but no one’s salaries are going up. It’s harder for us in the young generation to make much of a foothold like our parents did.
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WOW I had no idea it was like that up there! The housing market is A LOT cheaper here (so is the rent) so I feel quite fortunate now.
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nick
Lots of great advice already, so I’ll just share a couple thoughts I have after Mb and I purchased our little place:
1. When Mb and I were looking for a house, we did an *extensive* amount of research on comps. I think it’s super important to understand the market both in your area and relative to what you would like/expect. We had to temper our expectations a little bit after establishing what was available at our particular price point.
2. On a related note, prioritize what you can and can’t live without when it comes to amenity vs. location tradeoffs. We moved further outside the city than we were hoping (about 10 minutes), but it saved us about 50k in home updates that we didn’t have the liquid cash to make. And in reality, we’re not that far from everything we wanted to be close to.
3. Look for good guts. There’s nothing wrong with buying an older home for a reno, but there are certain tasks which your average Joe will struggle with (e.g. plumbing, electrical work, etc). Not only will paying slightly more for updates save you time and hassle in the long run, but it might save you money too (we’ve found that everything always ends up costing more than you think when you DIY bigger projects). However, sweat equity absolutely can save you money and improve your investment. This is an important cost-benefit analysis, and it’s vital to be honest with yourself about what you can and cannot do. We found a place with updated bathrooms (i.e. devoid of shitty 70’s flavor), but needed a complete kitchen facelift (lots of shitty 70’s flavor). The latter I can do…the former, not so much. Also, ask around to see who you know who has done home improvements. Oftentimes you know somebody who has skills you don’t. Pizza and beer covered the installation help on our laminate floors.
4. Go to your local bank and have a nice chat with a loan officer. We went with a local credit union because we developed a really great relationship with our lender. He was super informative, not pushy like the big-box bank person we first dealt with, and really helped us decide on what was best for our financial situation. He gave us a great sliding calculator which adjusted how much our monthly mortgage payment increase for every extra $10k we spent on the purchase price.
5. Interest rates are at historic lows…which is awesome. Definitely spend time considering whether a 15 or 30 year mortgage is right for you. If you can manage the 15 year, you will save big. Really, really big on interest.
6. On a related $$$ note, pushing for a seller to cover closing costs can be a super beneficial move when you’re strapped for liquid cash to make cosmetic improvements. We were happier to pay closer to the asking price when the seller offered to cover the closing costs.
7. Be picky online when you’re perusing houses on sites like Zillow and Trulia, but know that you really won’t get a feel for a house until you’re inside it. Because of this, expect to see quite a few places before one clicks.
8. We had a great experience with our realtor. I think they’re helpful.
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Great to hear from you Nick! And oh my gosh all of those things are SO helpful. Seriously I really appreciate it. We definitely need to establish a good loan officer and realtor. I want someone (like you said) that supports us and doesn’t push us. We want to be VERY comfortable with our monthly payment and do not want it to be a burden down the road.
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nick
One thing we found is that it’s easy to divorce your mortgage payment from your utility bills in your head. When you’re looking at your “maximum” payment, it should factor all your house-related bills so that you don’t overreach.
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Oh gosh I never would have thought of that. Another great one. How do you estimate utilities?
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nick
It can be sort of tricky, but an average electric bill for a 1500 square foot home in the South (where the AC runs almost constantly) generally runs from $75 in non-summer months up to $125 for summer months. If you currently pay for electric, then you can create a guesstimate off that depending on what the size of home you’re looking to purchase. Asking good friends who are home-owners in your area should give you a pretty good estimate.
Your water bill will vary (generally trash/sewer is included in water utilitites I believe), but I know down here they charge a flat $45 rate for the first four months and then prorate you past that. If you use less, they credit your next months bill. Finally, you’ll need to factor in cable/internet. That one’s up to you!
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For people who are prone to chafing should definitely go for tight clothing in order
to avoid rubbing of clothes. This will help you a lot in purchasing
the best and the most affordable. Your body will be moving
in ways you are not used to, and you don’t want to be flashing too much skin to those around you.
concretemoomin
This is a tricky one as there are pros and cons both ways. I’ve owned my own place(s) in the past but since moving to London and in with my now husband we’ve rented.
This is mostly down to the flexibility and cost. We can’t currently afford to buy and if we end up without an income unexpectedly or decide we hate a place we can just up and leave quite easily. Also, as you point out, the maintenance and repairs are taken care of by someone else.
On the downside, we’ve had flats sold from under us, landlords wanting to move back in or use their place as a family holiday home and even renting is massively expensive in London.
I think ideally we’d own somewhere but we don’t know if we’ll ever be able to afford to in the area we want to live so for now we put up with the expensive rents as opposed to the impossible mortgage.
I’d say that the ideal is to own a place out right but that’s rare for anyone usually. Buying is very scary but sometimes it’s possible to rent in an are you’re thinking of buying in before you commit, which can be helpful.
It’s complicated and there’s no right or wrong answer but if the upside of buying outweighs the upside of renting then go for it. :)