5 Times Renting Is Actually Better Than Owning

Chelsea dives into the instances where it actually makes more financial sense to rent a home instead of buying one, such as if you're still building credit, or the housing market in your area is still in a bubble.

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[vanessabogaert]

Back in 2007 everyone-and I mean everyone- nagged me about buying a house! They kept telling me prices were going up and up and if I didn’t buy right away, I’d priced out of home ownership. Luckily I didn’t listen, and used my savings to buy my office building that my business was located in(commercial property was much more reasonably priced at the time). Less than 6 months later the home market crashed! I finally bought a house in 2012, with my house half the price it was in 2008. Buy a house when it’s right for you, not because other people are scaring you into it!!

[emimac]

We decided to sign another year lease at our apartment. We work 10 mins away, Our kids have a pool we’re 15 mins from the beach and the landlord takes care of the repairs! It was a no brainer and exactly what we need to be carefree and present in our childrens lives. Thank you for recognizing that everyone’s needs are different and homeownership is not only a privilege but sometimes a burden.

[DonaldMark-nese]

Back in the day, when I purchased my first home to live-in; that was Miami in the early 1990s, first mortgages with rates of 8 to 9% and 9% to 10% were typical. People will have to accept the possibility that we won't ever return to 3%. If sellers must sell, home prices will have to decline, and lower evaluations will follow. Pretty sure I'm not alone in my chain of thoughts.

[Eddison]

A friendly reminder for some non-American viewers: buying real estate is not always a good idea when you live in a politically unstable region with a constant threat of military invasion.

[reddffox]

Bought my house in 2016. Two years ago I spent $7, 000 on a new roof (which was CHEAP because my dad is a saint and offered to do the labor for free). Last year I spent $7, 000 on foundation repair. This year, I'm looking at at $4, 000+ to get a mini split A/C installed in one room that's not connected to the central A/C (TBD how much the electrical job will cost to get a power supply where it needs to be), and replacing carpet with laminate in the three bedrooms (hundreds of dollars each, *if* I can DIY it).

I love my house, and I love that it's enabled me to have some things I dreamed of, like a backyard and a dog. But it is SO much more work and major expense than the one bedroom apartment I rented before. And when it comes to upkeep and repair, you're on your own to research, understand the issue, seek contractors that you can hopefully trust, etc.

Homeownership ain't a walk in the park. Definitely not something to enter into lightly or because of societal pressure.

[rba]

I think this depends on the market. I live in Australia where the housing market has only gone up since always and forever. Its common here for landlords to take almost a year to fix an issue, they can also boost up rent prices overnight for no reason, the philosophy here has always been get in as early as possible otherwise you have no chance and rent is also super high and landlords not reliable.

[jazzgirlie]

the biggest issue i've had consistently as a renter is that none of my property managers/landlords have ever shown any consideration, accommodation or respect for me as a human being. Rental properties are for profit only, and therefore the owners cut costs to ensure higher margins. But in my experience the costs they cut, are basic amenities. If a pipe breaks in my house, I can do any number of things to fix it. When pipes busted at 2/5 apartments I've lived in in the past 6 years, we've had horrible "solutions" that often involve huge costs to me, the renter...

It's not attainable for everyone who wants to own property to do so, because of a whole host of fucked up policies, but in my experience there was literally no upside to renting. If I had been treated with kindness and respect as a renter, who knows how long I would've waited to buy property.

[NullPointerException]

Thank you for this video. My mom is a real estate agent and I had it drilled into my head that renting was throwing money away because you don't build equity in the property. Renting is a waste because a mortgage is cheaper than rent. Even if you need to move suddenly you can just rent out your house and have the tenant pay your mortgage for you. Etc etc. The equity thing and the tenant thing are still true, but like you said, the bar to homeownership is much higher than it has been. In 2010 she bought a house for 80k. That same house is like 150k now. A mortgage is no longer cheaper than renting because the housing market is so insane at the moment. People that make 6 figures are getting outbid by cash buyers and investors. It's disgusting.

[gneissnicebaby]

Thank you!
I worked in real estate a couple years before the pandemic and in property management years before that.
Something I saw happen far too often during my short time in real estate was young people turning around and selling their first home in less than 5 years because they got a new job. Every time this happened, these people ended up paying money to sell their home, meaning they got literally nothing from their investment and absolutely lost A LOT of money. One seller had to write a check for nearly $10, 000 so they could sell their home and move out of state to their new job. This scenario doesn't happen to everyone, but it's something to be aware of, especially if you are someone who isn't 100% set on staying where you are for at least 5 years. Remember, a house is a long term investment.

[ColinAdventures]

Both renting and buying look like terrible options in my area. I chose to get out of real estate and bought a bus. It’s definitely not free, about half the price of renting though, and has its own set of problems but overall quality of life is way better than when I was renting an apartment. I’ll either wait for real estate to eventually make sense again or move somewhere where it does.

[residentevillife]

i rent and have been living in the same apartment for over 10 years and I honestly can't see myself ever leaving as the rents in nicer and newer buildings are completely out of range. My biggest gripe with renting is dealing with the building's god awful management company and fear that one day I will be forcibly evicted. I would have rather bought a home when they were mildly affordable now if I had the chance that continue dealing with these stresses

[sarahgullickson]

I LOVE THIS!! Thank you TFD. I live in my hometown of Bozeman, MT that has become a destination for tourism, tech companies, white flight, and everything else EVEN before the pandemic. In 2018 the average home price was around $400, 000 and is now closer to $700, 000. I could never imagine buying a home so close to half a million and now I can't stop asking myself "who the hell wants to buy a pos single family home that's run down for $700, 000?!" It's wild. But it makes sense from the perspective of people moving in and seeing that housing type as super affordable compared to where they USED to live. A lot of our base economy jobs aren't being filled because of housing affordability, which leads me to wonder... how will our economy survive in the next decade or so if people who run our grocery stores, gas stations and the like just can't afford to live here? Our local hospital is building employee housing due to the fact that DOCTORS are finding affordability an issue. If it weren't for the fact that I rent from my cousin, we would definitely be living elsewhere. Long story short, TFD... an interesting premise for a video may be centering how supporting affordable housing affects local and global economies...???

[justingerald]

I also just don't want to deal with taking care of a house, so we're basically paying to have certain things taken care of, and, like you said, focus on other forms of investment. But we also want to stay in a dense, transit, walkable area, and we could only afford some place in the sticks or something. Which is fine for some but not us.

[sophia_jane]

I've always had remarkably good luck finding reasonably priced apartments with good landlords, and I don't like the idea of being tied to and responsible for a piece of property at this point in my life, so a renter I shall remain

[MissVasques]

Thank you. Too many ppl bash on renting without seeing potential benefits too.
Here in Sweden we are also somewhat protected as renters, like a standard 3 months notice of moving/leaving.

[ZePopTart]

I frankly cannot wait until I’m the one dealing the repairs. That way, at least when it takes a month to fix something important, it was because it made financial sense for me, and not because my cheap ass landlord saved $20 by leaving me without a functional kitchen for two weeks.

[TheWillRogers]

i've got a credit score of 800 and all the pre-approvals were for 5.4%-6%. They wanted us to lock in since the rates are going to keep climbing. But at 5% we were still looking at total housing being 50% of our income so we just had to give up. Making over two times the average income here just isn't enough.

[LaurenAnne]

I love your videos so much!! I'm 36 and very ignorant to all of the investing tips ya'll share. Until today, I hadn't started investing in retirement. I didn't realize how little I needed to be able to do so. I'd love to see some content directed toward folks closer to 40, who severely stumbled in early adulthood (I struggled with addiction and sever mental illness), with tips for us to maximize our retirement fund potential.

[teodorar.]

I don't know how it is in the US but in Europe in most countries you can rent a much nicer place than what you can buy with the same set monthly budget. Especially considering the lack of unexpected maintenance costs as that is covered by your rent.

[Pikminiman]

1:16 (1) You need the flexibility of renting
3:23 (2) It's not in your budget to cover the additional costs of owning
5:33 (3) You're still building good credit
6:50 (4) Current housing opportunities are not good investments
10:09 (5) You want to keep living in a high-cost-of-living city
Thanks for talking about this.