Mar 12 2008

Being a content renter and avoiding the ‘buy a house bug’

With the economy taking a hit, houses being foreclosed on, and interest rates down, now seems like a great time to buy a house.

You’d be able to lock in at a low interest rate, and you’d be able to get a great deal on a house. It’s a buyer’s market, for sure.

It’s a great time to buy a house IFF (if and only if) you have the money to do so, plan to be in that house for at least five years, and want to move to a new house in the first place.

If you’re in debt up to your eyeballs, you probably don’t have 10 to 20 percent to put down on a house. So, forget about it for now. Keep working at your debt and savings, and be content where you are living.

If you think you’ll be moving out of the area soon, or you can’t find a house that will work for your family for at least a few years, then you shouldn’t buy a house right now.

Take heart, though. You can be a content renter like us!

Right now, we’re building an emergency fund. So, that means we have $0 saved for a down payment and closing costs. Shame on us if we even think about applying for a mortgage right now.

Second, it’s looking like it is 70 percent (or more) likely that we’ll be moving away from Pittsburgh this summer. When or where, I have no idea. Shane knew that when he accepted his job here, he’d be relocating within a year’s time or so. Please pray that we’ll go exactly where we’re needed, and we’ll be happy where we’re sent. We’re really hoping it’s somewhere closer to Indiana!

So, we’re going to be renters for awhile longer, no matter what’s happening to the economy.

I’d like to point out some great benefits of renting an apartment or house, so that if you’re feeling the “buy a house bug” right now but aren’t ready for it, you can have some encouragement to stay where you are.

Money benefits

  • Our monthly payment includes quite a bit. With our $750/month, we have a place to stay, a small storage locker, and paid-for water and garbage removal.
  • Our electric bill is likely a lot lower than it would be if we were in a house. We share three walls with other apartments or an interior stairwell, and we’re on the third floor. Heat rises, after all. I’m certain that we’re benefitting from our neighbor’s heat.
  • Property taxes are included in the rent somewhere, so we don’t have to worry about paying for those.
  • Renter’s insurance no doubt costs less than homeowner’s insurance. Our policy cost $120 for a year.
  • Tax benefits: In Indiana, you could deduct the amount of rent you paid, up to $2,500 for the year, I believe.

Other benefits

  • We have a mailbox that’s only accessible if you have a key. I like it because I know my mail is more secure this way. Less chance of identity theft!
  • When it snows, we don’t have to shovel the sidewalks or the parking lot. We don’t have to put salt on the walks. We don’t have to buy and store shovels or snowblowers.
  • In the summer, we don’t have to mow the grass or trim the hedges. We don’t have to pay for a lawnmower or other yard equipment.
  • When something breaks, the maintenance man comes and fixes it promptly. We don’t have to pay him extra for it, and we don’t have to pay for replacement parts. We don’t have to buy an assortment of tools and fix-it equipment, and we certainly don’t have to take the time to do it ourselves.
  • Included in our rent is access to a modest exercise room, complete with treadmill, stationary bike, and a weight machine. Some apartments have swimming pools.
  • When we move out, finding another tenant isn’t our problem. We just pack up, leave, and get our security deposit back. If we were in a house, we’d have to keep it super clean and try to sell it for a fair price.

What are some other benefits to renting?



15 Responses to “Being a content renter and avoiding the ‘buy a house bug’”

  1. When you get rid of an apartment, you have to keep it super clean, because they let people in to see it. They give you 24 hour notice to have your place spotless, and ask you not to be there within a rather large chunk of time. It’s actually kind of a pain. i had no idea it would be like that when i left the apartment i was staying in in college. It happened starting a week after i gave my notice, and happened 2-3 times/ week after that, once 5 times in a week. That sucked!
    All the other good things you said were true, though. Kris and i wish we’d given renting more of a thought, because if we’d be renting all this time, we’d have a ton of money in savings and wouldn’t be nervous every time the phone rings, wondering who wants money this time:) i never thought i’d be jealous of renters before, but lately i wish that we weren’t in a contract with our mortgage so we could move in an apt and try to get back on track financially.

  2. You make good points!

    You make a great case for keeping your place clean all the time. I’ll do my best to keep my apartment clean no matter what, but if a prospective renter has to see a messy closet or worse, I’ll get over it. Lol

    If I’m home, I’ll step out of my apartment to let a prospective renter look around, but I won’t leave my home for unreasonable amounts of time just in case someone comes by. I don’t have many places I could go, anyway.

    Our leasing office seems pretty kind and reasonable. We’ll see what happens when we start to move out.

  3. Can you discuss how your above analysis – which discusses moving into a house – would change if you moved into a condominium unit?

  4. To be honest, I don’t have experience with condos.

    Does anyone want to comment on living there?

  5. Yay for renting! Less space to clean (lil’ apt for us anyway).

    Locked building so no solicitors.

    Locked mailbox within locked doors. :)

    Top floor of a 3-story building so we get to use stairs a few times a day.

    Our complex has beautiful landscaping.

    We don’t need all the space we have…though sometimes I’d like my own office space. But our living room is big enough to do the trick.

    We get all the benefits of living by the nice neighborhood on one side (walking mostly) without having to buy a house there. The other side’s more ghetto, but not bad.

    @Jessica, it can be the same with “staging” houses. Like my cousin has no room for anything new in her house and has to keep it really clean in case the realtor comes by. The only thing is that when it’s a house it’s your loss…apartment building may get angrier.

  6. You’re not paying any interest when you pay your rent! :-)

    You don’t have to worry about home improvement projects- you can just move out when you’re no longer happy with your kitchen, bathroom, etc.

  7. At the end of the month, we’re getting a brand new kitchen in our apartment! What was just supposed to be a new floor turned into a new floor, new dishwasher, new fridge, and a new range hood. We got a new stove a couple of years ago, so EVERYTHING will be all new!

    We have problems occasionally with loud neighbors and skateboarders, but the rental office is always on top of things when we complain. I’ve lived in this apartment since 1996, if that tells you anything! Our rent is RIDICULOUSLY cheap because we’ve been here for so long!

    Granted, we’ve run out of space, so we’re going to rent a storage place…

  8. We’re looking seriously at buying a condo – it has a lot of the benefits of an apartment (no upkeep, etc). I lived with my aunt & uncle in their condo for a while and it really was a lot like an apartment. You do have to add in a homeowner’s association fee with the cost, but you often get that with subdivisions. I have a feeling that condos are also a bit better built. I don’t know about you, but my experiences in apartments is that they’re not built all that well – the walls are thin, and I feel like it’s very drafty. In our last place, we could see that part of the building was sinking into the ground. As you walk across the floor, there was a dip that was a little scary!

    Sarah mentioned you’re not paying interest when you rent, and while that’s true I would argue that paying interest is the same as paying rent. Either way, you’re paying money that you’ll never see again. There are a lot of reasons to rent and I’m not bashing it at all. I think we disagree about whether to finance 100% or not. We are comfortable doing that if we need to – it’s not ideal, but then again a lot of things in our life haven’t been ideal and we’ve had to live with it. We have decided that if we buy a condo, we want our mortgage to be less than our current rent (to account for the increases in other costs). That way, we won’t be getting in over our heads, and the money would be paid out anyways. Might as well have the money go towards something that will bring us some money when we sell it. We have other reasons too, but if we can’t find exactly what we are looking for then we will stay in our apartment.

    It’s hard for me to see the benefits right now, because I feel like with every positive I have a negative. :-) I guess for us the biggest thing is being able to pick up and move on if and when our needs change. (Forcing myself to stop there and not give a “but”!)

  9. – Two policemen and one policewomen living directly below you / directly above.

    – Having nice neighbors who don’t mind telling you politely you’ve left your key in the door for the millionth time.

    – ‘Free’ pool and fitness room

    – Can use the grills anytime you want without having to keep refilling the gas tank.

    – Packages are stored in the office rather than left on your doorstep.

  10. Just wanted to write and congratulate you two on your excellent choice to have renter’s insurance. You wouldn’t believe how many people lose everything from stupid mistakes like leaving a hot dog on an illegal grill.

  11. I would like to buy a house now, but I would really miss how close I am to downtown Chicago. I have a beautiful view of the lake and the skyline and I can see fireworks in the summertime. I would definitely miss being able to call maintenance at anytime and not having a gas and water bill.

  12. I do agree that renting has it’s benefits. However my fiance and I are in the process of purchasing our first home. Buying a home has it’s positives as well such as pride in home ownership. Also, our total mortgage payment including principal, interest, taxes and insurance are going to be about equal to the amount we had to pay in rent for a house that was not as roomy and not as nice. Another thing to think about renting is that rents can increase over the years. If you lock in a mortgage it will not increase except for property taxes. There are plenty of good arguments for either side both positive and negative. My fiance and I are in a place in our lives where it makes sense to buy. We won’t need to move and we have a nice financial base to build off of. If we didn’t have enough money in the bank to cover emergencies then we would rent for awhile longer.

  13. @ Dreamer — “homeownership” — very funny! If you have a mortgage, you don’t own your home, the bank does. Duh! A very small % of Americans actually own their homes. Most are mortgageowners.

    I am a happy permarenter, because I am never home, don’t need much space, and like to be nimble in changing circumstances, and to travel light through this life–no excess stuff (very ecological!). My money doesn’t go to mortgage interest, it goes to investments that outperform real estate appreciation.

    I pay the same rent I did in 1994 and only $40 more than what I paid in 1989. It’s so damn dirt cheap. Nice place too, great neighborhood, a river and unspoiled mountains in my back yard, nice landlord who loves me (I’m a great tenant), and I have three cats. If I want anything, all I have to do is ask. Without asking, I have new paint, carpet, roof, and stylish kitchen faucet within the last couple of years.

    My investment program is going well and I will have enough assets to cash flow renting for life. Those who say you need a paid off house to afford to retire…wasted their money paying mortgage interest instead of investing for greater wealth accumulation. So they’re stuck with an illiquid asset at retirement…no wonder they need a free place to live. LOL

    Plus I have free time. No mowing, house repairs, snow shoveling, etc. I do what I want with my free time. That leads to a very high quality of life.

  14. I prefer having my own house. I don’t mind shoveling and cutting grass – it’s good exercise while enjoying fresh air. I enjoy being able to choose things – the flowers / trees / shrubs and seeds that I plant as well as the colors of the walls, flooring, window treatments appliances and where I hang things on the walls.

    Also, with children, living in an apartment is hard. We were evicted from our second apt because our rambunctious 2 year old liked to jump off beds, run throughout the place and throw tantrums. I gave birth to our second child while we lived there and between the toddler and the infant, they “disturbed the peace” and our neighbors complained to the landlord. Living in a house, my kids could make all the noise they wanted and they never bothered anyone.

    Two years ago we had to live in an apartment in another city when my hubby got a new job. My kids had a drink accident on the carpet and the rental office sent us a bill for $1200 to replace the carpeting because it stained. I’ve learned with my kids, it is better to have our own place because if they ruin something, it is up to us to replace or repair something, which we can do on our own time when we can afford it.

    A couple other pluses for us include writing off the interest we paid on the mortgage, which results in a higher refund; having a place for all our stuff, including 2 bins of baby stuff that I refuse to get rid of and all of our seasonal stuff and my stockpiles, not hearing someone elses activities through the walls (because just as someone doesn’t want to hear my kids crying, I don’t want them waking my kids up at night because they decided to come home drunk), and being able to run extra cables or phone lines if needed – or get one of those cable dishes on our house if we wanted to. The last apartment did not permit those because the dishes were not consistent with their uniform appearance.

    You mentioned saving money on utility bills – valid point, but as a homeowner, you still control your usage and have control over the efficiency of your furnace /air conditioning unit and other appliances. When we lived in that last apt, we had a very inefficient gas dryer that made my bills more than I ever paid in our house. We weren’t allowed to hang to dry outside off the balcony and there weren’t laundromats. So, I hung to dry in the apt and it saved me $200-$300 a month on the gas bill, but what an inconvenience that was.

    Our homeowners ins is $54 a month, vs the $22 a month we paid for renters. Number wise, it is cheaper, but we’re getting what we pay for. More money covers the building AND our contents. Should something happen to our house, the insurance will pay for us to stay in a hotel until the house is livable again, fix or rebuild the house, replace our belongings, and then we will be able to move back into it. If you’re renting and something happens to the building your lease is terminated and you have to find a new place to live – but the ins will buy you new belongings.

    In my experience, renting is just like throwing money away. Everything is on loan and there is a charge for everything. Even though my house is technically on loan from the bank, they don’t care what I do to it as long as they get their money.

    But if you’re single or don’t plan to stay in one place very long, it’s a good option.

    Jamie’s last blog post..An Open Letter to My House

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Hey! I'm Kacie, wife to Shane and mother to Jonathan (7), Vivienne (5) and Amelia (2) . I write about my family's finance: how we save money, improve our spending, and plan for the future.

I hope I can inspire and encourage you to improve your situation. See disclosure.

I'm adopting a much slower-paced posting schedule, and treating this as a hobby blog now.

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