I think owning a home is overrated. Why I may never own a home again.
Not too long ago, I closed on the sale of my home. I had been ambivalent about buying in the first place (although, overall, I felt good about the house), but the whole closing process, and the realities I faced as a homeowner, have pretty much turned me off of buying in the future.
After looking at the situation, I think that I could be happy renting for the rest of my life.
Why I Feel the Need to Never Own a Home
I?ve never viewed residential homeownership as an investment. When we were looking, I cringed inwardly every time the real estate agent referred to whatever home we decided on as an ?investment.? I just didn?t see it that way. I?m not a huge fan of Robert Kiyosaki, but I do agree with him when he points out that paying a mortgage on the home you live in is in no way an investment.
But I figured that, even if we didn?t come out ahead, that we could probably do ok. And besides, we had just moved five times in as many years, and the last move was prompted by the fact that our landlord didn?t want to renew the lease because she wanted the house for her grandson and his family. We figured that at least we could landscape the way we wanted, and we wouldn?t have to be worried about getting kicked out on the whims of a landlord.
After having the home for seven years, though, I changed my tune a bit. Some of the issues that we ran into include:
- We got tired of taking care of the yard, so we had to hire someone else to do it.
- Property taxes, mortgage interest, homeowners insurance, and other costs ? even with tax breaks ? still cost more than we expected.
- The market finally started tanking in our area, and our home lost value.
- We had to replace the flooring after five years.
- As we entered the seventh year, it became apparent that we would need to start making some repairs, and replacing some of the original fixtures (like the cheap builder-installed toilets) in the home.
- The thought of having to eventually do things like replace the roofing and make other, more substantial repairs, began to haunt us.
- It?s difficult to just up and move when you own a home. My husband?s new job, and our move across the country, came suddenly, and we were tied down.
- We?re not the landlord type, so renting out the house didn?t appeal. (Plus, see number five; we?d still be responsible for all of that.)
The whole real estate process is also a big pain. Sure, it was a bit of a hassle to apply for the apartment we now live in. But that process was nothing to the real estate transaction process. The stack of paperwork involved when we bought the home, and then when we refinanced the home, and then when we sold the home was huge. The paperwork alone is almost reason enough to never own a home again.
Everything about the process is stressful. Plus, it didn?t help that the home had depreciated enough in value that we had to come up with several thousand dollars to make this all happen.
So Far, I?ve Enjoyed Being a Renter Again
Right now, I enjoy renting. Part of that likely has to do with the fact that we are now in a position to afford nicer apartments than we were able to get when we first married. Our current apartment is only 250 square feet smaller than the house we were living in. We?ve got on-site storage available to replace our under-the-house storage, and we can also garage our cars. We downsized to the essentials, and I like that aspect, too. Plus, since we have limited space to grow, we are spending less money overall.
I also like that we don?t have to pay when things break, and we don?t have to take care of maintenance. As a homeowner, I had to make appointments for heater service and air conditioner tuneups. Then, I had to pay for these services. Now, I don?t have to worry about it. The property management company takes care of that stuff. I don?t have to worry about taking care of the yard, and I don?t even have to pay for the alarm system in the apartment.
What?s also nice is that we were able to snag an end unit on the top floor. We only share one wall with our neighbors, and we never hear them anyway. It?s nice and quiet, and even going up the steps isn?t that big of a problem for us. We just modified our shopping habits a bit. Not only that, but there is a fitness room on site, and a nice resort-style pool. I can ?go to the gym? and we can play in the pool without the need to go across town or pay for admittance. It?s a nice setup.
While I might prefer a town home to an apartment in the future, or we might decide to rent a house again, so far this experience has been awesome enough that my husband and I are in agreement that we could never own a home again and be perfectly happy.
When you look at overall appreciation, once you take out what you pay in mortgage interest and other costs, even with a tax break, you?re hard pressed to see an annualized return of better than two or three percent ? especially if you live in areas that aren?t likely to see huge gains in the market. I can do better with my other investments. Plus, we aren?t tied down. Even if we had to pay a fee for getting out of the lease early, it would still be less than what we just forked over to sell our house.
Owning can work out if you are able to sell at the top of the market, or if life?s unexpected circumstances don?t prompt you to sell quickly, and for terms you aren?t particularly happy with. It can even work out if you decide to go the rental income route and become a landlord. But that?s just not my style.
What do you think? Do you prefer owning a home or renting? Would you consider a lifestyle that allows you to never own a home again?