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Does Renting Make More Sense Than Buying?

By
Real Estate Broker/Owner with American West Realty and Management 12599

Some people don’t think buying a home makes sense. They feel like renting is a smarter move. On the other hand, some people think renting doesn’t make any sense. For the most part, arguing it one way or another is about as useful as arguing politics or religion — whatever “side” you’re on, you have your point of view, feelings, and reasons. But there are also people who are open to debate. If that’s you, read on. This will give you some food for thought and help you make up your own mind about whether it makes more sense to buy a home or rent one.

At least you have the option

Picture living back in Medieval times. Only a few people are allowed to own land, and you’re not one of them. You can live on a lord’s land, but you’ll have to give him a certain percentage of whatever you grow or raise. How do you feel about that? Are you OK with that? Is it fair? Probably not… So, look at it this way: At least now you have the option of buying property. Whether or not you want to exercise that right is your choice. And it is a choice. You can also decide that you’d rather not own the property you live in. You can certainly still rent from a landlord. (Although they probably won’t accept bushels of wheat, baskets of vegetables, or a goat as payment. You’ll need to somehow convert that to cash money.) But owning property isn’t for everyone. It comes with responsibilities, risks, and limitations that not everyone is cut out for.

Both come with responsibilities, risks, and limitations

Many people who claim renting makes more sense feel that way because:

  • They feel like values are too high. (Unaffordable.)
  • They feel like it’s too risky. (The market could crash. Values could go down.)
  • They could lose their house (if they lost their job and fell behind on mortgage payments).
  • There’s a lot of cost to maintain a house.
  • It will “tie them down.” (They won’t be able to move to the coast of Costa Rica and surf for 7 months.)

All of those are valid and possibly true reasons for not buying a home. However, renting also comes with responsibilities, risks, and limitations:

  • Rents aren’t necessarily more affordable than buying a house, and they can go up over time (and probably won’t go down).Conversely, the value of a home you own will most likely go up over time, even if it does go down.
  • There’s risk that a landlord could not renew a lease and force you to move.
  • While you aren’t usually entirely responsible for maintenance, you can be held responsible for things that break or get damaged. You may also be responsible for some upkeep and maintenance costs.
  • You don’t have much say in what gets done around the house or apartment. You’re at the mercy of a landlord doing something (or allowing you to do something to it).
  • A lease can tie you down as much, if not more, than owning a house that you can choose to sell or rent out if you want to move at some point.

Obviously this isn’t a complete comparison list of risks, responsibilities, and limitations. There are certainly more we could get into. It’s just to make a point, which is… Whether you buy or rent a home, you will have risks, responsibilities, and limitations placed upon you. The only true solution is to live for free in your childhood home forever and ever — and even that probably isn’t entirely “free” or without responsibilities and limitations.

You can’t live somewhere entirely for free, but...

...what you can do for free is figure out whether you should buy a place to call home, or rent one instead. Ask for my free booklet; it’s a quick read and filled with over a dozen thought-provoking topics. It makes sense for you to read this if you:

•  Question the value of owning a home.
•  Have never owned a home.
•  Owned a home, but went back to renting due to past financial issues.
•  Simply want to think through which scenario (owning vs. renting) makes more sense. 

 

Whether you are renting, buying, selling, or investing, 

contact Nathan Gesner at

(307) 587-9608

Nathan Gesner

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Nathan Gesner, American West Realty

Dorte Engel
RE/MAX Leading Edge - Bowie, MD
ABC - Annapolis, Bowie, Crofton & rest of Maryland

Dear Nathan,

In my estimation, renting is good as a temporary solution, but if you plan to be anywhere for three years or more, you may as well buy a house and gain some equity, when you leave.

Mar 05, 2019 09:37 PM
Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Nathan, nice to see you back where have you been? Oh boy and you come back with such a power post, Endre

Mar 05, 2019 11:01 PM
Nathan Gesner
American West Realty and Management - Cody, WY
Broker / Property Manager

Endre Barath, Jr.  I've been swamped! I bought a building in a neighboring town and will open a branch office in April. Picked up two more agents, a third this summer, and possibly another property manager by next month. I'm hyper focused on building up the business and trying to back myself out of the day-to-day stuff. Good times!

Mar 06, 2019 06:45 AM
Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

That is a good problem to have, Nathan what is the old saying as you improve the quality of the problems improve as well:)Endre

Mar 07, 2019 12:49 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

I'm late to the commenting, Nathan Gesner ... so sorry.   There is no across-the-board answer to this question.  It's a very personal one only found by considering the bulletpoints you provide here (and others).  You provide an excellent starting point for those trying to find their own personal answer on this ...

Gene   

Apr 27, 2019 12:09 PM