I have written several blog posts dealing with renting
versus buying. I have been a lifelong renter and have never purchased a home in
my 41 years (and yes, I am proud of it). I did, however, marry someone who “owned”
both a residence and a rental property. I put owned in quotes because he
obviously had mortgages on the homes, so really the bank owned them. It managed
to be a nightmare for us when home values dropped, we owed more than they were
worth, and we wanted to move to Colorado for a better lifestyle. We were
financially strapped when we couldn’t get a renter and had to cover both
mortgages, and don’t get me started on how much we had to pay to get the house
ready for a new renter after a previous one left.
I am constantly drawn to articles that compare renting to buying because my husband and I are currently mortgage free renters and blissfully
happy. We get surprised comments from a lot of people when we tell them that we
rent. It’s as if being in your 40s and not wanting to buy a home is illegal or
immoral in some way. About 2/3 of these people even feel comfortable enough to
actually tell us we should buy a home. I’m sorry, but telling me where to spend
my money, unless you’re my financial adviser, is a bit personal. We tend to
take offense at these remarks and put them right up there with anyone who finds
out that we’re childfree and tells us we should have kids.
Personal preference aside, we’ve run the numbers on several
occasions and buying does not make good financial sense to us. We’ve calculated
the amount a homeowner pays in mortgage payments, interest, maintenance, yard
care, insurance, taxes, repairs and replacements, HOA fees, upgrades and
remodels, realtor fees if you ever sell, etc. If we pay rent and put all of the
additional (non-mortgage payment) money into an investment account, we are
further ahead, and not just financially. We have the option of leaving at the
end of our lease to live elsewhere. We don’t have to hire a realtor, hope the economy
is good, let the home sit on the market for an indefinite period of time,
before we can move on with our lives. Trust me, it’s a very intense feeling of
freedom to us, and best of all – it’s what suits our needs.
Also, consider what I see as a bankruptcy attorney. Approximately
1 out of every 5 or 6 bankruptcies that I file contains a surrender of a home
or a previous foreclosure. This means that either the person let their home go
into foreclosure and are filing bankruptcy because the home sold for less than
the bank was owed, or the person is behind on their mortgage and realizes that
they can’t or don’t want to keep it, so they are surrendering it in the
bankruptcy. Seeing this many people who are dragged down by their home purchase
is troubling to me, and just reinforces my personal decision.
I think putting thousands of dollars down on a 30-year
investment that locks you into not only a general location, but an exact
address, is a big deal. Just like I think it’s a big deal to decide to have
children (that investment tends to last even more than 30 years). Both are very
big and very personal choices. But both are just that, choices. I think that a
lot of people don’t realize that they are choosing to be parents and
homeowners, and we are simply choosing the opposite. Neither choice is better
than the other, it’s personal to the decision maker. So the next time you are
about to tell someone that they should buy a home because prices are at an all
time low, maybe you should think twice and let them make that very personal,
very specific to their situation, decision on their own. And in turn, I promise
not to walk around telling all of you that you should be renting.
Submitted by:
Bankruptcy Attorney
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