On the long-term, yes, getting a mortgage is better than renting. However, most people who say “renting is just like throwing away money” are never thinking long-term. They are thinking short-term, and renting is the far better option short-term. There are several reasons, but here are the main few:
(1) Rent Cost is Cheaper than House Cost
For a temporary amount of time, it is significantly cheaper to rent and save up for a down payment than to jump into a mortgage. Don’t just look at the monthly mortgage payment compared to the monthly rent payment. Dig a little deeper.
From personal experience, it would take about 3 years and 6 months in our previous apartment to equal the amount of money we have spent in the 2 years that we have been in our current home.
Those numbers may seem anecdotal, but they are a reality. See chart below. Then continue reading.
(2) Renting Increases Ability Rid Consumer Debt
This should seem obvious. Since we have more disposable income, we are able to dump our consumer debt a lot more quickly. If you can imagine, it is liking doing yard work with a 150 pound mortgage fanny pack around your waist.
(3) Rentals are Easier to Clean
Most people who rent live in an apartment. Apartments are typically smaller than houses. Apartments also tend to have appliances, counter tops, flooring, and walls that make dirt and trash easier to see. Sure, we may have more admiration for our homes, but apartments are just slap-out easier to clean. So if cleanliness is an issue for you, hold off on buying a house until you work that issue out.
(4) There is Less Stress with Rentals
What happens when a water heater breaks at your apartment? You call a maintenance guy to replace or fix it for free. What happens when a water heater breaks at your home? You panic because you don’t have an emergency fund in place to cover repair or replacement.
Word to the wise, if you don’t have an emergency fund or aren’t working diligently to save one up, then a house is not for you. Just keep renting until you learn not to take so many risks.
Agree or Disagree?