Myth #7: Owning a House Means I’ve “Made It”

To think you are falling short unless you own a home is one of the great myths of our culture. People who choose to rent instead of owning a home run into this stigma all the time. When they tell someone they rent, it’s treated like a confession to be discussed in hushed tones. They get a “oh, poor dear” look and the subject quickly changes.

Or they hear, “It’s a good investment to buy a house. As long as you’re paying rent, you might as well be building up equity.” Or, “When are you going to settle down? When are you going to take on some real responsibility?”

Debby is a client in her mid-thirties who rents a home. She has rented all of her adult life, and prefers it. She’s Executive Director of a charitable foundation and could easily afford to buy a home, based on her position and the salary she receives. Her friends and coworkers keep asking her, as a mother would a child, “When are you going to buy a home?” as if there is something wrong with her until she does.

She pays $1000 a month to rent a nice house. She would have to pay at least double that to own a home of comparable worth. She is taking the amount she saves each month and investing it in a retirement account. By the time she retires, she will have accumulated a nice nest egg.

We often overlook the benefit of renting in terms of its practical and psychological advantages. Not only is Debby saving money, but she also has the added peace of mind of not having to worry about the care and upkeep of her house. If the basement leaks, someone else has to take care of it.

Another client swears by what he calls “the Zen of renting.” He has always found remarkable places to live. He values the freedom he feels in being able to move somewhere else if he chooses to, or the freedom to travel for an extended period of time. He does not like to work on things around the house. He doesn’t enjoy building, gardening, remodeling, or fixing things. It’s someone else’s worry.

From a strictly financial view, it sometimes makes more sense to rent than to buy. When you add in the buying and selling costs, the additional mortgage costs, the real estate taxes, and the costs of upkeep, the fact is that by renting you often come out ahead financially. Factoring in the tax advantages of ownership does not always tip the balance in favor of home ownership.

When you buy a home other costs come “out of the woodwork.” That wallpaper in the kitchen just won’t do. And those curtains in the living room—they look like they came from grandma’s house. Don’t you think a deck over the back yard would be nice? And we should replace the plumbing.

When you rent, such expenses don’t enter your mind or exit your pocketbook.

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