Actually, Reader, renting is great.

In the U.S., we're often made to believe that owning a home is the ultimate achievement and that you're not really a "real adult" until you do. If you've been taught that renting is throwing away your money, but you also don't feel like you can afford a home any time soon (like most of us), we're here to remind you of all the reasons that renting is AMAZING.

The Lie: Renting is Throwing Away Money

It's a common misconception that buying a house is an investment, that your house is an asset, and that buying is a smarter financial move than spending money on something you don't own. However, buying your primary home is not the same as buying an investment property and can dig you into a financial hole - leaving you "house-poor."

So, let's talk about why it's MORE than okay to rent.

The Truth:

Let's get a few things clear:

First of all, a house is NOT an asset. At least, not your primary home. Yes, it might grow in value over the years, but it is not an asset as long as you are paying for it (a mortgage) and not earning money from it (interest or dividends). In financial terms, it is a liability. This doesn't mean buying a home is never a good idea, but calling it an asset is misleading and makes the large mortgage you're taking out feel much less serious. So, if you're looking to grow your wealth and increase your assets - buying a home is not usually the best way to do that.

Second, buying a home and paying a mortgage can end up costing you way more than your rent. This depends greatly on where you're buying, how much you can put down, and interest rates. Because saving for a 20% down payment is unrealistic for many people, your mortgage will likely cost you significantly more than rent, especially once you add up all the up-front costs.

For example, renting a 2BD in Atlanta costs an average of $2,275. A 2BD house (or condo) costs an average of $415,000. If you can only put 3.5% down ($14,525), your monthly costs (without HOA fees or bills) would come to $3,220. And that's without considering all your upfront costs like closing costs, appraisal fees, etc! Now, just imagine what you could do with that extra $1000+ a month!

Here are a few reasons renting can be better than buying:

• Flexibility: Renting offers flexibility that homeownership does not, such as the ability to move easily for work or personal reasons.
• Time to Explore: With the ability to move, you can try out different areas and different styles of apartments to find your perfect fit.
• Lower Upfront Costs: Renting usually requires less upfront cash compared to buying a home, which involves a down payment, closing costs, and maintenance expenses.
• Less Responsibility: Need maintenance? Repairs? You're typically not responsible for the work or the cost in a rental!
• More Available Funds: In our opinion, this is one of the biggest perks. Instead of putting all your available funds into a mortgage - you can rent for a few more years, invest that money, and watch it grow so that one day, buying your own house can be a reality.

Renting can be a smart financial choice depending on your lifestyle and goals. Don’t let society pressure you into buying before you’re ready or make you feel like renting is not a viable option! A rental home is still a home ❤️

- Lora at She's a Lot

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