Money Talks Monday (4/16/18)

Have you ever heard someone say, “Renting a home/apartment is like throwing money away?”

To continue on the theme of saving money around the house, this week’s Money Talks Monday examines that very statement. While there are terrific tax and equity benefits to home ownership, and home ownership does add to the owner’s financial portfolio, there are also benefits to renting. The questions is more, “When is the right time to buy?” For some the answer is never. For others the answer is at the right time in his, her, or their lives.

How purchasing affects the mind and the body is the most important consideration when determining whether to rent or to buy. For those who do not have interest in lawn maintenance, household upkeep, et cetera, it could be to their advantage to rent and enjoy the apartment lifestyle. Although rent runs about three times an average mortgage payment, for those who enjoy the benefits or appreciate the stress reduction of unexpected and costly repairs, renting can be well worth the money. When you rent, you do pay more and you do not have ownership in the space you occupy. However, in most cases, you do not have the responsibility of lawn manicuring, replacing and upgrading appliances, repairing leaky roofs, painting the interior and exterior of your living space, and so on. This should be considered in your decision to rent or to buy (own).

For most individuals, renting is an option of security. You pay more for peace of mind; and peace of mind is valuable. The right time for ownership may come with marriage, family, or age. You will know when it is right for you. The stress of home ownership may also not be worth it to some as the peace of mind and reduced stress level is of greater value. These considerations should be made when considering whether to rent or to buy. Ultimately, though, in many cases those who rent are investing in security and peace of mind rather than throwing money away. For those who do opt to rent, though, renter’s insurance is an absolute MUST. Many landlords now require it, but about 40% do not. When paying for the peace of mind to rent, you must also buy the security of renter’s insurance.

Join me next week for another Money Talks Monday!