If you decide to buy a home, make sure that your decision is not based on peer pressure like “You are not a respected member of society until you own a home.”
I know a young professional couple who recently moved to Seattle and are renting a home. They have plenty of disposable income and would have no problem qualifying to buy a home. Yet they could not tell me with any conviction that they planned to stay in this area for more than three years. They have parents back east and they wanted to be able to respond quickly if their parents’ health failed. They didn’t want to be stuck with a house.
They are prime candidates to continue as renters. They should make mobility a priority, and not buy.
Now, let me turn the tables on you. Based on an analysis of your situation, even if renting does make more sense financially, it still might be best for you to buy a home, once you factor in the emotional issues.
There are risks involved in renting. You are subject to the whim of the landlord. You may have to move with only a few months’ notice. The rent may go up. (However, home ownership does not make you immune to rising costs. Real estate taxes, insurance, and maintenance costs all are liable to rise beyond your control.)
However, you may need the peace of mind brought by the long-term security and stability of owning a house. You may want to have a home you can upgrade or remodel. You might want to develop an extensive garden or make improvements to the landscape. You might want to paint it pink.
Kym is a client who is an account executive at a media firm. She is also an artist, and she wants to develop a business painting portraits. Her husband is a freelance writer who survives economically by writing copy for commercial clients. He, in turn, would rather work on his own short stories and leave the commercial work behind. They currently rent a home.
They are thinking of buying a house. I worked with them to determine the amount they could spend on a home based on their current income level. They can afford one that costs about $295,000.
I said to them, “Are you sure you want to do this? You’ll most likely have to keep working full time at the media company and your husband is going to have to continue doing corporate work for some time to afford it.”
Kym said, “We just don’t like being at the mercy of the landlord. We never know when rent is going to go up and we might have to move before we are ready. A house that is our own will give us a base camp that we can rely on. We can then make some long-term planning decisions in our life. And fixing it up will be a form of self-expression for us.”
Because their rent is low, if they kept renting it would allow them the chance to make some career changes they both want. But the need for a long-term base, for the security of knowing that they will not have to move at the whim of a landlord, wins out. It wins out even if it means they will have to continue doing work they do not entirely enjoy. That is okay because it is a lifestyle choice they are making consciously. Another couple in the same situation might prefer to do their hearts’ work, even if it meant they’d earn less and have to rent.