I Own 24 Units But Choose to Rent—Here’s Why

I Own 24 Units But Choose to Rent—Here’s Why

3 min read
Nate Shields

Nate Shields is a real estate investor and real estate investing coach.

Experience
Nate started in real estate in 2013 part-time as an agent and quickly went full-time, enabling him to quit his 9 to 5. After a couple years in the business, he found BiggerPockets and developed an appetite for real estate investing.

After consuming all the podcasts, Nate and a partner lined up financing and purchased a property at auction. In just two and a half years, they had 25 units in three states (a mix of single family, small multifamily, and larger multifamily). Nate also started flipping properties on the side.

In addition to continuing to add properties to his portfolio, Nate enjoys helping new investors get their first deal. He does this through articles, his YouTube Channel, and one-on-one coaching.

Press
Nate was a guest on the Real Estate Investing 365 Podcast (show 15) and featured in Illinois REALTOR® Magazine.

Education
Nate graduated Magna Cum Laude with a bachelor’s in Biblical Studies from Judson University.

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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!

Related: To Rent or To Buy: A Complete Analysis for Prospective Homeowners

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.

Man stands in the middle of a busy sidewalk looking at his cell phone while crowds of people walk around on 14th Street in Manhattan, New York City with the glow of sunlight in the background.

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.

Related: Grant Cardone Is Right: Owning a Primary Residence Usually ISN’T Smart

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.

apartment-complex

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.

Old place

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

New place

And here’s a breakdown of the numbers at our new place:

  • Rent: $2,200 (includes underground, heated garage parking)
  • Utilities: $130

THAT’S IT!

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 Downsides

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.

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If you were in my shoes, would you have done the same thing? Or something different?

Let me know in the comment section below.