Lately the topic of renting vs. buying has come up a lot within our circle of friends, and we have friends on both sides of the fence. I wanted to offer a bit more insight into why we’ve chosen to continue renting and highlight some of the benefits to renting that others may not have considered.
We have been renting our apartment for 6 1/2 years now, and I can honestly say we certainly didn’t think we’d be here this long. We’d always assumed we’d buy a house as soon as we could afford the down payment. And about three years ago, we were almost ready to.
Matt had already researched the best neighborhoods and at least once a week we were looking through the listings on MLS to see what had become available. But after a lot of discussion, we decided we didn’t want to buy anything. Even though we could afford it, we decided we just didn’t want that lifestyle.
We don’t want our money tied up in a house.
As soon as we decided we weren’t ready to buy, Matt invested our down payment across several different markets, and a huge benefit to doing this is protection if one of those markets crashes. If we’d purchased a home before the market crashed, it’s very possible our one investment [the house] may have lost it’s value and will be very difficult to sell. This is what’s happened to a lot of people around Edmonton which is why housing prices haven’t yet dropped to where they should be. All these homeowners are looking to get back what they paid for on a home that is no longer worth what is was when they bought it.
I’m not saying this is what’s going to happen to everyone who buys a home, but given Alberta’s current market, we prefer to be cautious. We also really like the peace of mind that comes with knowing our investments will cover us no matter what the world throws at us.
We don’t want the lifestyle that comes with home ownership.
I love how easy renting is, our only major responsibility is making sure we pay our rent on time. Living in a bigger place comes with a lot more work, and when you own a home you have to assume all that responsibility plus care for a yard. I love never having to shovel the snow or cut the grass, and I also love not having to pay for replacing broken appliances and renovations. Especially a major and unexpected one.
Not having all these extra responsibilities allows us to spend our time and money on the things that truly bring joy to our lives. And as far as I’m concerned, spending our money on travelling will always bring me more happiness then buying a new hot water heater for our house.
And to all of those people who’ve asked us “Why do you keep renting when your rent payment is the same as a mortgage payment?”
This is usually followed up with “Renting is just throwing your money away, at least when you have a mortgage, you are working towards owning your home.”
While there is some truth to the later, we look at it this way: A rent payment is the most someone would ever pay a month and a mortgage payment is the least they’d ever pay. And what I mean by that is a mortgage payment is just the cost of purchasing the home, it isn’t the true cost of owning that home. You would still need to factor in property taxes, utility costs [gas, water, power, heat…] and any maintenance or renovation costs to figure out what that house is actually costing you per month.
Our rent already includes property taxes and utilities, updating our place is not an option, and we don’t have to worry about any maintenance because it’s our landlords responsibility. So while a mortgage payment might be the same as [or less then] rent, when you compare the total costs of the two options, we feel there is no financial benefit to buying into our current market.
I think what it comes down to is that buying a home has become a lifestyle choice and just like society should never judge you for not having kids, you shouldn’t feel like less of an adult for choosing not to buy a home. Obviously Matt and I have given a lot of thought to whether or not we want to buy and ultimately, we are choosing to invest our money while living our lives in a way that makes us happy. And if that’s not #adulting I don’t know what is.