Rent vs. Buy-Here's Where Real Estate Gets Personal

By
Real Estate Agent with Berkshire Hathaway Home Services McNelis Group Properties

Rent vs. Buy-Here's Where Real Estate Gets Personal.  Renting vs. buying has been a hot topic lately with most perspectives on the subject presenting individual opinions on some version of how a financial "expert" has taken some numbers to create a financial picture that looks like it makes sense to buck tradition and rent instead of buy - that homeownership somehow no longer is the most solid investment.

American Dream

But that's not what this post is about. I am sure that there are financial scenarios that might make sense for some to rent instead of buy, but my opinion is that renting is a necessity for many and that any financial benefit to renting in most cases is still pretty hard to substantiate.

This is more about taking a look at the more personal side of renting. The terms "American Dream" and "Pride of Ownership"  have somehow become lost on us when so much is being shouted at us planting a seed that maybe owning a home is not what it has always been cracked up to be.

What I suggest here is that those who are even considering renting instead of buying a home look at this decision with deep introspection. There is value in how you feel and about where your hard earned dollars are going and how you feel affects your quality of life.

Probably one of the most cliche' reasons given for buying over renting is the statement that you are "paying your landlord's mortgage". Maybe you are OK with that if it somehow financially fits into your situation, but how do you really feel about your dollars going to "pay your landlord's mortgage" and the benefit that your landlord can take advantage of, but the limitations it puts on you? If it creates a feeling of resentment that you have given up some level of freedom at the expense of someone else's benefit, maybe you need to weigh the price of your personal outlook against just how much financial benefit there might be. Maybe there is more to the American Dream - not just the financial side, but the personal side.

On a recent walk-through for a rental I started to think long and hard about "Pride of Ownership". Woven into pride of ownership is freedom.  When you rent a home, no matter how nice it might be, there are certain freedoms you give up. Maybe the paint colors are just too neutral for you or they just don't really go with your things - you really aren't free to paint as you would like. If you don't love that kitchen floor you can't change it. If the carpet doesn't really go you can't change it. How do you feel about every hole you put in the wall to put up your pictures that you love? If you have problems with the appliances and your landlord is not the best at taking care of the issues, you don't really have the freedom to resolve the problem the way you want to. And here are some biggies - how do you feel about not having the freedom to have a pet that you dearly love - or on a more controversial note, but freedom still comes into question - if you are a smoker?

So if you are weighing the rent vs. buy decision - It's about you and quality of life. It's about freedom and it's personal.  And it's still about the American Dream and Pride of Ownership.

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Comments (28)

Nima Mohmmadi
Keller Williams Realty-Team Caropreso - Odenton, MD
Realtor in Odenton, Crofton, Severna Park, Millersville, Severn, MD

Absolutly Great and  Fresh view to this old topic. Thanks for the post.

Mar 26, 2011 04:57 AM
Bridget "Mortgage Mama" McGee
SWBC Mortgage 410-960-2061 - Baltimore, MD
Maryland Mortgage Mama NMLS#196068

Susan,  Too many folks would love to buy but don't have a plan in place to get there!  It is so frustrating when folks find the "perfect home" and then realize their credit, assets, income can't make that Dream a Reality.  Too often, they give up until sometime later they find another "perfect house" but haven't made the changes necessary to get them there, and the cycle continues.  We need to get to these folks and help them become Mortgage Ready so that the next time, they can realize their Dream of Homeownership.

Bridget "Maryland Mortgage Mama" McGee

Mar 26, 2011 05:01 AM
Tni LeBlanc, Realtor®, J.D.
Mint Properties, Lic. #01871795 - Santa Maria, CA
Tenacious Tni (805) 878-9879

I think this is an excellent post.  It's true it is a personal decision to buy a home.  Buying a home is a big decision and a very personal one.   Excellent post -- so glad it was featured!

Mar 26, 2011 05:31 AM
Kieno Simeon Your South Riding Real Estate Consultant
Keller Williams Realty - South Riding, VA

Wonderful points.  I just had a similar conversation with a renter who got the dreaded knock on their door to let them know their landlord had been foreclosed on and the home was sold in an auction.  How's that for freedom.  They were shocked and quite frustrated and are certainly weighing their options now because they were doing everything right.  Even paying their rent early and in the end they are being uprooted and are unsure if they are even getting their security deposit back.  Not a lot of freedom there.  They are being forced out, certainly not on their own free will.

Mar 26, 2011 05:50 AM
Susan Thompson-Solomons
Berkshire Hathaway Home Services McNelis Group Properties - Solomons, MD
Southern MD Real Estate-Solomons Specialist

Gary, thanks for commenting. I certainly recognize that there are situations where renting is the best or only option and I'm not really trying to take sides on the issue. I just really hope that people will think about it from the standpoint of whether the sacrifice on things that are important to them personally are worth it in cases where they are in the position to do so. For me, I am having a hard time with so much out there right now portraying that this is "the" thing to do. I think we have to be pretty careful with the "freedoms" we do have where we can.

Mar 26, 2011 06:04 AM
Kaera Mims
Liz Moore & Associates - Fort Monroe, VA
Associate Broker, e-PRO, REALTOR; Hampton, Newport News, York Co.

Whether a person rents or buys, there are definitely emotions attached to it and I think you did a great job of presenting something for a renter to think about! 

Mar 26, 2011 06:32 AM
Susan Thompson-Solomons
Berkshire Hathaway Home Services McNelis Group Properties - Solomons, MD
Southern MD Real Estate-Solomons Specialist

Cory, you are right that it is a lot about the "socialized to buy a home thing", but I think this really goes much deeper than that when you start thinking about it from the standpoint of what are the tradeoffs for the individual who is in a position to make choices.  Investors definitely have a different motivation than many buyers.  My hope is that this post encourages people to look at the issue from different perspectives so that they are happiest and most confident in their decision as it pertains to them personally. Thanks for commenting.

Mar 26, 2011 06:45 AM
Susan Thompson-Solomons
Berkshire Hathaway Home Services McNelis Group Properties - Solomons, MD
Southern MD Real Estate-Solomons Specialist

Michelle, you are absolutely right that there are people that it totally makes sense for them to buy. I ,as well, have handled rentals in the $2000 and up price range where there are reasons why it makes sense for them to rent for their particular situation. Our area has a military base nearby which makes that "short time in the area" come into play. However, I am concerned about the generalization out there that renting is the way to go - just hope people will look at the issue more broadly and how it might impact the options available long term if the country totally moves in the rental direction.

Mar 26, 2011 06:53 AM
Susan Thompson-Solomons
Berkshire Hathaway Home Services McNelis Group Properties - Solomons, MD
Southern MD Real Estate-Solomons Specialist

Colleen, you are so right that there are many people who are pretty much locked in as to their circumstances, but I do hope that those that can look at the issue from all angles.

Mar 26, 2011 06:54 AM
Kevin Kueneke
Caliber Home Loans - Encinitas, CA
San Diego Mortgage Banker

I ran the numbers for my own "rent vs. own" going back to when I purchased my current home.  Even with the market fluctuations, I am still way ahead being an owner than if I would have rented over that same time period.  Granted, I was never upside down which would have added the "emotional price" to the owning side.  thanks for the article.

Mar 26, 2011 06:55 AM
Anonymous
Anonymous

I think renting may be more common in the future as equity requirements go higher, and wages remain stagnant.  We were discussing this on caravan last week and an agent brought up the issue of remaining mobile and able to move in this job market.  Good post. 

Mar 26, 2011 06:57 AM
#19
Susan Thompson-Solomons
Berkshire Hathaway Home Services McNelis Group Properties - Solomons, MD
Southern MD Real Estate-Solomons Specialist

Colleen, your point about a rental creating another side of freedom for those who want to travel and really is my point - that people should look at this from the pros and cons for their situation.

Mar 26, 2011 06:58 AM
Susan Thompson-Solomons
Berkshire Hathaway Home Services McNelis Group Properties - Solomons, MD
Southern MD Real Estate-Solomons Specialist

Michelle, there sure are people that renting makes the most sense or is their only choice, but my hope is that they will not take the advice to rent on the surface and take a close look at their situation.

Nima, thanks for commenting.  I really want people to look at this issue from different sides, not necessarily choose sides one way or another, but to look at it as it applies to them and how it might impact the ability to choose in the future if we go solely down the path of rentals as is suggested by many to be the direction of real estate. 

Mar 26, 2011 07:21 AM
Susan Thompson-Solomons
Berkshire Hathaway Home Services McNelis Group Properties - Solomons, MD
Southern MD Real Estate-Solomons Specialist

Bridget, financing is a big part of making the plan come together. Having spent many years in mortgage banking, I make this an essential part of getting buyers from point A to point B.

Tni, thanks for commenting. I really think this issue bears looking at from a perspective that is different from so much of what we hear.

 

Mar 26, 2011 07:27 AM
Susan Thompson-Solomons
Berkshire Hathaway Home Services McNelis Group Properties - Solomons, MD
Southern MD Real Estate-Solomons Specialist

Kiena, you bring up a point that renters many times don't realize - the impact of foreclosures on their rental. This is definitely the dark side for the tenant and goes beyond the pyscological aspects I mention. Nothing like having to find another rental and no longer having access to a security deposit. This is an unfortunate and miserable reality in some rental situations. 

Kevin, I do believe that there are still many compelling financial reasons to buy over renting. There are definitely specific situations that have to be considered in every case - it's just not a yes or no thing.

Mar 26, 2011 07:40 AM
Susan Thompson-Solomons
Berkshire Hathaway Home Services McNelis Group Properties - Solomons, MD
Southern MD Real Estate-Solomons Specialist

Kaera, there definitely is a lot to think about with this decision for the individual. Thanks for commenting.

Mar 26, 2011 07:41 AM
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

Susan -  This is definitely an important side of the rent versus own argument to consider when making a decision.

Mar 26, 2011 06:06 PM
Susan Thompson-Solomons
Berkshire Hathaway Home Services McNelis Group Properties - Solomons, MD
Southern MD Real Estate-Solomons Specialist

Christine, I hope that people will look at this a number of ways in the cases where they can. Thanks for commenting.

Mar 26, 2011 07:51 PM
Anonymous
Consumer

Good post. I agree that this is a quality of life decision. The balance shifts for people based on their personal needs and priorities.

I don't believe that owning is necessarily a better financial choice than buying. It can be. It also can be the more expensive choice. The person who continually upgrades, remodels, redecorates, landscapes, etc., spends more to own than he would to rent, and will not recover what he spends on overimprovements. But that person would probably not be happy renting. The person who wants to move frequently, or wants to travel without worry over whether "something" will go wrong in his absence, should rent during that time of his life. 

Mar 29, 2011 11:01 AM
#27
Susan Thompson-Solomons
Berkshire Hathaway Home Services McNelis Group Properties - Solomons, MD
Southern MD Real Estate-Solomons Specialist

The points you mention regarding the additional money people put into a home are good ones. Upgrading and remodeling expenses need to be considered very carefully as to what can be recouped financially vs. the quality of life they will bring. But as you say, the person who chooses to make these improvements will probably not be happy renting because they lose these types of choices when renting. Also, as you say, for those who move frequently or travel improve their quality of life for their situation when renting if maintenance and expense of an owned property is not a concern.

Mar 30, 2011 12:32 AM