I was listening to a podcast of two guys who I respect who were talking about owning a home vs. renting. I always value their insights and admire their journeys. But still, they are 32 and 37 years old, so technically they are millennials. And they have a different way of thinking than me.
Their claim was that they want the freedom to not be tied down to a home. If they want to move, they want the easiest process possible. They’d much rather travel and see the world and be free. A home would just isolate them to one place. They say that owning a home is an old idea. I can understand where they are coming from. However, this is very impractical.
Honestly, no matter what, you have to live somewhere. Unless you can find free board somewhere or camp out on Federal land for free, your home is an expense. And no matter how you look at it, paying rent is unrecoverable. It is money you will never see again. Whereas, when you own a home, that is an investment into the future. Ideally, before or about the time you retire, you should have your house paid off. Then, you can live in the house or downsize to something else and not have to pay a mortgage. What kids don’t think about is when they retire. When you aren’t gainfully employed. How will you live? Well fine if you have a pension and a million dollars in retirement savings. But what if you didn’t have to pay rent or a mortgage anymore? That’s a majority of our monthly expenses.
When you rent, all that money goes down the drain. You think you don’t have to pay for a new furnace, a new faucet, or a roof, but you do. Just like anything in life, the cost of overhead goes into your rent. The $10,000 to $14,000 (in the midwest with lower rates) you pay per year could have gone toward a mortgage. And, if your neighborhood stays the same quality, not prone to flooding or other disasters, then it will increase in value. And these days, you don’t have to live in the home. Open it up and let someone stay there (someone well screened to maintain your home). I don’t like this idea, but if need be and you like to travel, then do that.
Also, most renters can’t change much in an apartment. They can’t nail into the wall or change the tile or anything. Much of our dreams of owning a home is in making it our own. I can put up a 6 foot privacy fence in my backyard and let my dogs roam free. I can knock out a wall or take out the carpet and put in hardwood floors. I can do what I want to my home within code. I cut a hole in a wall to the outside to put in a dog door. My dogs go in and out as they please. I can do what I want. A landlord can’t come prancing in anytime they want to inspect what you’ve done or how you are living. The keys to my home are mine.
Its really not an old idea at all. Its very practical and appropriate in this day and age. It becomes even more important when you have loved ones, a family, pets, or even guests. A single person may have a feeling of more security if they have neighbors. But neighbors can also be the worst thing ever. I’ve heard couples yelling and fighting. A neighbor’s parking spot was outside of our bedroom window. She would start her car and let it run to warm up (with the radio on I must say). Then she’d go back into the apartment. Then she’d come back out and scrape her windows or just sit there before leaving. I was even an apartment manager there for a while. So any time I came home, my phone would start ringing or I’d get a knock on the door. They had a multitude of tasks for me always. One lady upstairs had an old recliner. You would hear a clunk, a long-ish creak, then a crash when her footrest fully extended. People tend to clomp around above you. They play music loud (or you can’t play yours loud). Living in an apartment stinks!
Buy a home. I guarantee that you can get a starter home with payments lower than your rent. I had a starter home when I was in grad school. I sold it within 24 hours of putting it up for sale and gained $10,000 after only a few years in the home. It was a win-win for us. I would never ever go back to apartment living. I have my own garage. I close the garage door behind me, take out my groceries sheltered from the weather. And I walk my groceries 20 feet to my kitchen. A good in-between would be a condo or town home. Then you can have a backyard and a garage, but often you have the same limitations as an apartment.
Back in the days of Bill Clinton, they pushed the idea that everyone should own a home. I would qualify that with "if they can afford it". But technically, if you can afford to pay rent, you can afford a home. You just need to have a good job and good credit. If you don’t have those two things, then maybe that’s what you need to work on first. Stop throwing your money down the drain.