After living in the same area for 20 years, we decided to go on an adventure and move to a new city. Most homeowners would sell their place and buy a new one. Not us.
Even though I’ve been a homeowner many times over and own 24 units (soon to be 28!), this time around I decided to analyze the situation with an open mind.
Would buying or renting make more sense? It may be surprising to some, but here are several reasons why we decided to rent.
7 Reasons We Decided to Become Renters Again
Reason #1: No maintenance
One of the things that bugged me the most about a house (and a decent-sized one at that) was all the maintenance involved. Mowing the lawn, painting the trim, staining the deck, replacing screens, repairing the roof, landscaping…
I didn’t like one minute of any of these activities (or the money it cost me).
With an apartment, the only thing we really have to do is keep the place clean (which is a monumental challenge with two little kids). The first week we were here, the microwave stopped working. A new one was installed the next day.
We also had some condensation issues with some of the windows. Those were replaced, too. I didn’t have to lift a finger—or pay for it!
Reason #2: Freedom
Renting frees us up in a lot of ways. Owning a house really does tie you down in some regards. Who’s going to mow the lawn or check on the house while you’re on vacation? What if there’s a leak while you’re gone?
It frees up our time immensely because we’re not focused on all the maintenance. And it frees up a lot of money (which I’ll cover later). It also gives us freedom to explore our new city, which leads me to my next consideration.
Reason #3: Learn a new market or neighborhood
Have you ever made the mistake where you moved into a certain market or neighborhood and then you learn that they’re putting a new toxic waste dump behind your house or the neighbor breeds aggressive attack kangaroos?
Renting helps you learn the ropes of a new market. Especially since we were moving from a town of 20,000 to a city of 250,000, we wanted to give ourselves some time to learn the market, the neighborhoods, schools, shopping… everything.
If we would have bought, we might have been kicking ourselves a year later.
Reason #4: Location
We wanted to be in the heart of the city, within walking distance to as much as possible. There is no way we could have afforded a house in this spot. Renting gave us the location we wanted at a much reduced cost.
Reason #5: Newer construction and more amenities
This won’t always be the case if you’re renting, but we decided to live in a 70-unit building that was newer construction (only 10 years old). Awesome location, underground heated parking (hard to find around here), a general store literally steps away, gym, entertainment, shopping, dining.
You name it, we got it.
Reason #6: Real estate taxes
Our taxes were out of control. Usually you think of your mortgage, taxes, and insurance as a fixed cost. While your mortgage is, the other two can change—for the worse.
At the lowest point, we were paying $1,800/month for all three. At the highest, we were at a staggering $2,400.
While rents can go up, too, typically they don’t go up as much as taxes have the potential for. Our rent will go up this year if we renew, but it’s only going up $10/month. I think we’ll be ok.
Reason #7: Our overall expenses decreased substantially
We’ve talked about this a little already but let’s dive into the numbers and see just how much we’re saving.
Here’s a breakdown of the numbers at our old place:
- Mortgage/Taxes/Insurance: $2,200
- Capital Expenditures/Maintenance: $500 (2% calculation based on newer construction; this number could certainly be higher)
- Utilities: $400
- Lawn Care: $140
- Pest Control: $30
- Total: $3,270
And here’s a breakdown of the numbers at our new place:
- Rent: $2,200 (includes underground, heated garage parking)
- Utilities: $130
We’re saving $940/month currently. One caveat here: we are living in a smaller place, but we actually love how it simplified our lives.
The only downside I can think of right now is potential opportunity cost. We are probably missing out on appreciation (the Madison market is hot) and debt paydown. But we’re just not quite ready to jump back into homeownership yet.
What Would You Do?
Now, this is not a knock on homeownership. I think it’s incredibly important and gratifying for the right person. Right now, it’s just not us. We may house hack in a year or two, but until then we are renters.
Even though I’m a landlord to dozens of other people, I’m fine with having a landlord, too.
If you were in my shoes, would you have done the same thing? Or something different?
Let me know in the comment section below.