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Renting vs Buying- Why some people CHOOSE to rent.

Updated on January 19, 2013

Buying a home

Tara and Billy bought a home when they were in their early twenties. They both had good jobs and decided they wanted buy a home and start a family. They didn't have a savings account worth much, just enough to put a down payment on their home. After finding what they considered the perfect neighborhood, they bought their first home. Tara got pregnant only one year after their home purchase and after going over their finances they decided it would be reasonable for her to stay at home with the baby, for at least the first year. Tara ended up staying home the full year and got pregnant again. They felt their family was complete and decided to have Tara be at at-home mom (which had always been their desire) until the kids entered school. As medical bills, diapers, food and heat began to raise in cost, money got a little tighter but they were still able to live off their income. However, they did not invest anything into retirement or college savings accounts. Her husband had a retirement through his work, but that wouldn't provide them with enough money to live on once they did retire.


Expenses started to get higher

After about 3 years of home ownership things started to get even more expensive, a new dishwasher, a leaky window, new paint, mold treatment, things really started to add up. The couple seriously thought about Tara going back to work, so she did. Tara worked for one year. Her income pushed them into the next tax bracket and their taxes went from 15 percent to 25. The cost of two children in daycare, with transportation and work expenses actually lost them money. Tara once again quit her job to be a stay at home mom. The family felt stuck, sure eventually both kids would be in school but even then after school care would cost money, and leave them left without anything to spare.

One night they decided to go see a financial planner, someone who might shed some light on how their situation looked. In 2003 they bought their home at $199,000.00 dollars, after crunching expense, which included everything from taxes, maintenance, insurance and interest Tara and billy found themselves at a loss for words. Sure they knew a home was a long term investment but they discovered that in order to break even in the year 2013 their home would have to sell for almost $400,000.00 dollars.

Owning a home isn't right for everyone

Billy was never a fix it man. He didn't know much about maintenance of a home and felt unprepared to fix many of the problems their home was having on his own. Each time something went wrong they ended up calling an expert, which cost a pretty penny. Soon the couple was going to find themselves with a second mortgage that they couldn't afford. What did they do? They sold their house.

Rent for less and invest-

Billy and Tara now rent a beautiful home for $600 less a month then they paid in mortgage. Tara and Billy invest that $600.00 plus some more (since they no longer have the expenses of maintenance, taxes and insurance) into their retirement account. Plus they have built up 3 months worth of Billy's salary as an emergency fund. They bought cars with cash so they don't have to worry about car payments. Sure they may have to move a couple times, and yes rent will get higher as time goes by but for Tara and Billy they are investing in a different dream. They rent so that when they retire they will have enough money to either buy a home outright, or live off the money to pay their rent for the rest of their lives. They can live in different parts of the world without worrying about selling or renting our their home.

This isn't your typical American dream. However, for Tara and Billy it ended up helping them achieve their goals and dreams. They are much less stressed about unexpected expenses that come with owning a home. They still spend their money wisely so that they will be able to invest their money, for their retirement and their kids future. I say good for them on living their American Dream.

In a recent article about renting to get rich, investors speak about the benefits of renting a home vs buying one. Many times working families find themselves without the means to keep up with the high cost of owning a home. The important thing is to do what works for you and your family.

Benefits of Renting

~Relocating is easier

~No maintenance costs

~No Insurance or taxes

~More disposable income for emergencies and/or savings


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    • Mandeeadair profile imageAUTHOR


      6 years ago from California

      Thank you Moma Kim and Ignugent-

      I like keeping and open mind and seeing other perspectives and this is one of them. It seems to make sense for some people and I think that is the most important. Not all of us 'fit the mold' and there are many different ways of living that so called 'American Dream' :). Thanks again for reading the great feedback :)!.

    • profile image


      6 years ago

      This is very interesting and it is really explained well. You can save more if you rent. I know there are are pros and cons. Sometimes you want to renovate but you can't or just even change the color of the room. You always need to ask the landlord. But you got a very good point in savings.

      Thanks for sharing. Voted up and more.

    • Mama Kim 8 profile image

      Sasha Kim 

      6 years ago

      A wonderful argument for renting! It really is a great option for a lot of people. Most of my childhood was lived in rented homes. I do miss being able to just ask the landlords whenever something went wrong. Great hub!! Voted and shared.


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