Renting vs. Home Ownership: A Look into My Future

December 16, 2011

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For me, I don’t see home ownership in my future. No scratch that, I don’t see it within the near future (less than 10 years from now).

I’m not opposed to the idea. It’s just that I’ve learned a lot about myself in the past couple of years and I know that buying a home is probably not in my best interest.

Let’s push past the whole “in-debt-bad-credit” part of my story and pretend it’s 8 years from now. I’ve managed to be debt free, I’ve built up a nice savings account and I’m investing in my future. I’ve got my act together. It would be a good time to buy a home, right?

How do I determine what I can reasonably afford?

If I use an online mortgage payments calculator, I can determine what type of house my current rental payment would offer me. Based on my current rental payments, I could probably afford a $100,000 home (give or take).

That’s not all that I need to consider thought.

Yes I could afford the mortgage payment but I’m also responsible for ALL utilities, not just electric and water like I am now. I also want to consider property tax payments, insurance payments, maintenance costs and even decorating costs.

I’m not even sure I’ll be able to get a home loan in the future. Trying to figure out how much can I borrow is going to be pretty difficult. I know that this is considered an investment and it’s also considered a “good debt.” However, I worry that everything associated with a home is going to lead me back into consumer debt.  If something happens or two somethings at one time, I certainly don’t want to go into debt again.

Am I the type to own a home?

Honestly? I don’t think so.

I think I’ll be OK renting for awhile, a good long while actually. I have a lot of ground to make up with my retirement. I am 37 and I don’t have anything for the future put away. I’m going to need to be very aggressive with it and I think, for me a home would be a hindrance.

Lucky for me, this is many years away. For right now it’s my goal to be consumer debt free by the end of 2015. Then I want to be student loan free by the end of 2017. I think I’ll consider owning a home after that point. For now, I’m staying right where I am.


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6 Responses to Renting vs. Home Ownership: A Look into My Future

  1. Christa on December 21, 2011 at 2:00 pm

    I like your plan of eliminating your debt and increasing your savings before home ownership. I had a neighbor who rented his entire life in order to save a bundle to travel in retirement. He loved not owning a home.


    • Jessica The DebtPrincess on December 29, 2011 at 9:12 am

      I think your neighbor has the right idea. Unless I become uber comfortable with my financial situation, I don’t know that a home is a wise choice. I’d love to travel. I like knowing that my home expenses are fixed each month and that there’s very little that can come up that would cost me my emergency fund.


  2. Mel on December 22, 2011 at 9:31 pm

    Home ownership is overrated. Trust me.

    I’d give ANYTHING to be out from underneath this damn mortgage. Like you, our credit was shot and we were “lucky” to qualify for a small mortgage on a modular home in a trailer park. Our home is nice, don’t get me wrong and I love our house, for the most part. What I don’t love is the mortgage AND the rent (we own the house, we rent the lot).

    I love being able to have our pets without somebody telling me I have to choose one “child” over another because I am only allowed X number of pets. I also enjoy being able to decorate and paint and remodel at my whim, but when I’m looking at a $10k bathroom reno next year, renting is awfully appealing. I also think that whenever we have to service the furnace. Or the central air unit. Or replace a window. Or fix a door. Or patch a hole in the wall.

    And we won’t even talk about how hard it is to sell a house in this market. NIGHTMARE!

    Once we sell this place and go back to renting, it’s HIGHLY unlikely we’ll tie ourselves down with a house payment again.
    Mel recently posted..Christmas, New Year’s and other random crap


    • Jessica The DebtPrincess on December 29, 2011 at 9:07 am

      The great thing about my current apartment is that I can paint and they have provided junction boxes in the ceilings for things like fans, chandeliers and anything else I’d like to hang up. I have more luxury in this apartment than most, for that I’m grateful. I can have pets although I’m not interested in anything more than the fish that Gavin is getting from my mom for Christmas.

      I don’t blame you for wanting to get out of the mortgage, especially with your goals of moving. The sooner, the better, right?


  3. Diane on December 27, 2011 at 10:50 am

    I didn’t own a home until I was 39, and in fact never really planned to do so. I do love my house, but from a purely financial POV renting was the far better option. When you have a house you are tied to it good times and bad. There is always something to be done, something to be fixed, something needing attention short term or long. When you rent you have flexibility and your costs are fixed (at least year to year). You don’t all of a sudden have to spend $20K on dry rot, or pay for gardening, or pay for a new water heater or a roof.

    I bought my house here in CA knowing it was not the better financial choice (even considering appreciation, equity and all the rest). I made that choice consciously. I do not regret it. But I have discretionary savings I can use to feed its hunger. And I put down 30%, so I’m not underwater.

    This mania with owning seems a peculiarly American thing. Owning is not always better – just ask any of those people who overbought in the past decade and are underwater. I saved more from my income when I was renting than I do now. My grandmother sold her house when widowed at 50 and rented the rest of her life in NYC (which is a city full of renters). She could have afforded to buy, but didn’t want the hassle. She never gave renting a second thought. She never thought she had to buy. And so she had flexibility in where to live and how to spend her money.

    Nothing wrong with renting.


    • Jessica The DebtPrincess on December 29, 2011 at 9:04 am

      I completely agree with you. I truly have no great desire to own but I almost feel like I should. I’m definitely going to assess this in the future. Like I said in the post, I can’t see myself owning anything larger than a condo.

      Thanks for the great reply!


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