“Renting is wasting money.”
“Renting only makes others rich.”
I’ve heard it, you’ve heard it. But the question we have to ask ourselves is, is there a place and time for renting your residence?
I’d say, absolutely!
While I believe that home ownership is an important tool to wealth building. It’s not an absolute tool and renting isn’t always bad.
For example let’s say that you are trying to pay off debt and position yourself to buy a house. You may think, I need to buy a home because I’m a grown person. This is what grown folk do. You are able to find a bank or lender who is willing to give you a mortgage to buy the home. Meanwhile, you’re overwhelmed with debt.
In the diagram above I share two scenarios. I based these numbers off of a random town in Ohio. I know people will freak out about these numbers but I hope the point stays. It was all what I found online. The apartment was nice. The home was average.
When you rent, you have to look at it as moving your risk. When the furnace goes out it’s not your problem. When the roof needs replaced, it’s not your problem.
I do advise people that while renting a property, get renters insurance. Because in case of fire, the stuff in your home is not covered. Landlords don’t provide insurance for the property of the renters.
Rent can help in several instances. One that would apply to many people is some one who is working like crazy to pay off debts and trying to achieve goals. That way the time you need to spend on your home is only for sleeping, eating and relaxing. You don’t have to spend time on upkeep. I’d advise to rent an apartment if possible for these reasons. When you rent a house most of the time, you have to do the yard yourself. As well, you have to pay for water yourself when you rent a house most of the time.
While renting, focus on working like crazy to meet your goals. Take the time your saving from renting, and shift your time towards accomplishing your goals. Pay off debt. Put the money into retirement accounts. Get yourself together.
And then when the time is right, buy you a home.
Btw, renting works well for a residence. Renting furniture and other things can be terrible. Predatory lenders do a number through rental companies. Rent Wisely.