“Never” is a harsh word. As the saying goes, “Never say never.” But in the case of when you should buy a home, there are some compelling reasons why the only answer really is never.
Of course, this is always dependent on your own individual circumstances. If you have enough money to buy a house without a mortgage, go for it! Or, if you’re an investor, real estate is almost always a lucrative gig.
Most of us don’t fall in those two categories, though. For the typical person who has to take out a loan for the next thirty years or so, that dream of buying a house often turns into a nightmare.
If you’re considering the perks of home-buying versus renting, these five reasons could help you decide to be a renter for life.
1. It’s Cheaper to Rent
When you buy a house, you have a lot of extra expenses on top of your monthly mortgage. You’ll definitely have to pay property taxes. If you don’t have at least 20% saved as a down payment, mortgage insurance is another expense.
What happens when things go wrong in your rental? You call the landlord! Well, when you buy a home, you are the landlord. You pay for the repairs and maintenance yourself.
Depending on the real estate market you’re living in, it could be significantly cheaper to rent instead of buy. And if you’d rather not deal with costly repairs and home upkeep, renting takes that stress off your shoulders.
2. You’re Stuck for the Long Haul
There’s no more solid way to build roots than to buy a house. If you know you’re happy with staying in one place for the foreseeable future, this isn’t a big deal to you.
But if you would rather move around a bit before you settle down for good, stick with renting!
It’s not impossible to get out of a house once you buy it. However, you take the chance that you’ll be able to get what you paid for it and that it won’t take years to sell.
3. It’s Expensive
Between the down payment and the closing costs alone, you’ve taken a hit in your savings. If you don’t have the money to cover those, that’s another loan you’ve had to get further in debt for.
Sure, you’ll have equity on the house—someday. In reality, once you sign on that dotted line, it will take years before you are paying towards principal and not interest.
The money you were going to put towards a down payment can be used for other things instead. Invest it in your 401(k) or a diverse portfolio that builds your money for you before you retire.
4. You’ll Be Tempted to Fill the House
This doesn’t sound like a bad thing until you think about the money you’ll waste as you fill each room.
When you rent, you think about each purchase before you make an impulse buy. Eventually, you’ll have to move everything you own.
In your own home, you have a lot of room for things you don’t really need. It’s tempting to add to your home decor everytime you shop. This money adds up, and could have been better spent making memories or reaching your financial goals.
5. You Have No Control Over the Neighborhood
It’s a horror story for homeowners around the world every year. They do their research, find the perfect neighborhood, check out the neighbors, and fall in love.
No sooner do they settle in for a picture-perfect future than something changes.
The ideal neighbors sell their house to complainers who make your life miserable. Or a few bad apples in the area cause everyone’s property value to depreciate.
In some instances, the local government puts highways straight through quiet, rural towns. Big businesses turn a quaint neighborhood into a loud tourist trap.
Whatever the case is, when you own a home, you have no control over what goes on around you. You’re stuck unless you can sell your house, but who wants to buy it with the circumstances making you want to leave?
When you’re renting, it’s easy to wait until your lease is up and head out of the negative environment. If the neighbors are loud or out of control, the landlord is usually obligated to take care of the issue or you could look into legal ways to break your lease.
As long as you stick to the terms of your own contract, you have a lot more control over your environment when you rent.
The common myth is that buying a home gives you stability and security. The truth is that it’s a locked-in financial hardship for millions of people.
If you don’t want to be controlled by your mortgage loan every month and for the next few decades, “never” is truly the right word for when to buy a house.