After completing my post-graduate education, my family keeps asking when I’ll buy a house. They think I’m wasting money on rent instead of investing in a property that could go up in value. But my spouse and I have many good reasons to wait before buying a home.
Owning a home isn’t always a surefire investment. Right now, the housing market shows that owning a home can create big financial problems. Many homeowners are struggling with underwater mortgages or facing foreclosures. A lot of them have seen their property values drop significantly, some by 20 to 40%.
Home ownership comes with major financial risks. I firmly believe people shouldn’t buy a house until they’re completely ready financially. This means having enough for a 20% down payment, an 8-month emergency fund, and being able to cover not just the mortgage, but also other costs like taxes and maintenance. We just aren’t there yet.
Owning a home also means dealing with lots of restrictions. We plan to move closer to our family in the next three years. As renters, we can leave easily when our lease ends. But if we owned a home, we’d either have to wait for it to sell—which could take a long time in this market—or sell it at a loss.
Home maintenance would become our responsibility. Right now, if something breaks, like a tile in the shower or a sinkhole forms, it’s the landlord who pays for the repairs, not us. They usually have insurance to cover these things.
Property taxes are another big deal. We live in an area with high taxes. For houses in our price range, taxes can range from $8,000 to $14,000 a year. That adds roughly $800 to $1,000 a month, which we avoid by renting.
Home insurance is much pricier than renter’s insurance. We currently pay around $100 a year for renter’s insurance. But homeowner’s insurance could cost five to eight times that, plus any additional costs not covered by insurance.
Maintenance responsibilities as homeowners would fall on us. With me working from home while taking care of our child and my spouse working long hours, we barely have time for yard work or hiring help. As renters, we don’t have to worry about these chores.
Utilities can get expensive too. Our rent includes heating, water, and trash disposal. If we had to pay these separately, they could add $200 to $300 more each winter month.
We definitely want to own a house in the future, but this isn’t the right time. We’d rather wait until we’re in a better financial position to handle all the extra costs.
So, to anyone renting out there, don’t let others make you feel bad about it. Renting isn’t throwing money away; it’s paying for a place to live, which is a basic need. If someone says you’re wasting money, just remember you’re saving by avoiding the high costs of owning a home.