Things buyers, renters should consider
- B.J. Yoder: Young Money
- March 4, 2022
- 614
All my life I felt like renting was a waste of money, just throwing money away. The view I had was that a renter is putting their money toward nothing. The rent is sometimes higher than the mortgage, so renting to me never made sense.
Until it did.
I was watching a financial video, and it brought another perspective to renting, bringing it to my attention that when you’re renting, the $700 you pay is the maximum you pay per month if utilities are included. When you buy a house, of course you’ll need a down payement, so there’s the large up-front cost, but the mortgage is the absolute minimum you will pay.
This has become more than prevalent since I have moved out on my own. I rented out a house for a while, and that was simple enough, but it’s a whole other game when it’s your own house. Think of utilities, repairs and anything else that pops up. It makes owning a house scary and makes rent look much more attractive. I know when a garbage disposal gave out, it was an easy $150 to repair that. Guess whose pocket that would have come out of if you would have been renting? The landlord’s.
The other component of my renting idea was pride as well. I always thought I should own something and build and grow something — such as equity in a house — but buying is not a “one size fits all” plan and I was ignorant for thinking it was.
There also is a large reason for not owning a home right now — the housing market has been absolutely nuts for the past year or so. Think about it: The lumber industry was shut down for months because of COVID-19, and that obviously slowed the production of lumber. With the slowed production of lumber, it slowed the building of new houses, which led to a shortage in housing with the demand still there. That’s why housing prices have seemingly gone through the roof and why it seems harder and harder for people my age and younger just starting out to buy a house.
What about the bad parts of renting? If you have a great landlord, there really shouldn’t be anything to worry about, but what happens when the hot water goes out during winter and you can’t get a hold of your property owner? Are you able to take control of the situation? One thing I think of is when I had a cousin who was renting and either his washer or dryer gave out and he told his landlord multiple times but was always brushed off to the side.
I’m not making a case for either side of the argument. It all depends on where you are at in life. There are pros and cons on buying a house and renting a house or apartment, and the best way to figure out which one you should do is take a look at your situation, not just the financial situation because that plays a large factor in it, but also your life, your job, your family, your kids, et cetera, then make a wise decision based off that.
What if you know you’re moving soon? Obviously, going through the process of buying a house would not be for you; a month-to-month lease would be the best. If you have a stable job that seems like it will be there for years to come, buying a house and building equity would be the way to go. Find what’s right for you and others in your life and move forward.
Holmes County native BJ Yoder is an insurance agent by day and a finance enthusiast by night. This column is for informational purposes only. He can be emailed at benjamin.john.yoder@gmail.com.