(This is cross-posted at BlogHer.)
I have several friends and family members who are close to my age and own their own homes. Whenever this happens — when a new person joins the home-owning ranks — I’d be lying if I said I didn’t feel a twinge of house-envy. The thing is, though, despite the allure that homeownership holds, most of my friends and similarly-aged co-workers are still renting.
There was an article in the New York Times not long ago that talked about the increasing number of single women in the home-buying market (the article referred to these women as WINKs — or more specifically, “Women with Income, No Kids”). Dumb acronyms aside, I like the fact that nationwide, over the last decade “the number of unmarried women buying housing of any type increased 20 percent.” And just last year in New Jersey, 45 percent of all condominium buyers were women in this category. That’s awesome.
As a single woman who likes the area where she lives, the thought of buying my own place (most likely a condo or townhouse since yard maintenance can go to hell, in my opinion) has certainly entered my mind. The biggest problem is the money factor.
The choice about whether to rent or buy is completely different depending on where you live (I addressed this last year in a post called Desirable Locations, Expensive Prices: Is Buying a Home Impossible?). A friend of mine just bought a townhouse in Richmond, Virginia, but he paid much less for it than anything comparable I could buy in the metro Washington, DC area — and we only live 100 miles apart. Along the same lines, the two-story, three-bedroom house that my sister and her fiance bought — also located in Richmond — cost less than what the condo I’m renting would go for if it was sold.
The difference between these two (relatively close) locations does seem a little crazy sometimes. I know that if I moved back to Richmond — a city where I lived for eight years — there’s a good chance I could buy my own place. But I like where I am. This location is working for me for right now, even if all the cute little condos I come across for sale are all over $350,000. (For a one-bedroom. Which means I wouldn’t be sharing the cost with a female roommate, like I do right now.)
According to the same New York Times article, there’s also been a rise in single women buying a place together, living as roommates and splitting the bills — just like they would if they were renting. While it seems like a good idea and people are able to make it work, Dawn at Homebuying Info reminds us that there are a number of things you should ask yourself before you take that step.
Most of the time — when I’m not having house-envy, that is — my renting situation is perfectly fine with me. I’ve read a number of “rent vs. buy” articles that list the pros and cons of buying your own place as opposed to renting, and I can understand both sides. While it would be nice to have something I could call my own, there are also advantages to being a renter.
As a renter, it’s much easier for me to change my location. Even though I live in Alexandria, Virginia, I could move to Arlington and still have roughly the same commuting distance to my job in DC. After I spent a year in Arlington, I could move to Bethesda, Maryland — same commuting distance. Or maybe I’d choose to move into DC itself. The options are pretty much limitless.
I also like the fact that I’m not responsible for fixing anything (or paying someone to fix it) if something goes wrong. When our garbage disposal broke, and then our bathroom sink stopped up, we called our landlord. The grass outside gets cut by someone the property management hires. Our power bill is included in our rent, as well as water/sewer/trash removal, so that limits the amount of separate bills I have to pay every month.
While there are advantages to renting, I know that the thought of buying something isn’t going to go away. I’m sure it will happen at some point — whether it’s here in this area or somewhere else. Until that happens, though, I’ll enjoy my perks as a renter. It’s pretty stress-free, and that’s something I certainly can’t complain about.
What are your thoughts on renting vs. buying?
Related Reading:
Condohope is on the side of pro-renting. The writer is talking about buying vs. renting in Vancouver, but the argument is the same as others I’ve read.
It’s time the levees broke on Vancouver’s ownership myth. A hard look at the numbers shows renting is vastly superior to the choice of becoming a homeowner. How do I know this? Because every month, I have $1,500 more in my pocket than I would have if I owned the same, brand-new apartment that I live in. I’m also off the hook for any building deficiencies, maintenance or the risk of being unable to move out when I want to. If I get a job somewhere else and need to relocate, the state of the market has no effect on me. In short, I have the fullest level of control over my lifestyle. Without owning.
Katherine at Who Invented Roses: When something goes wrong with her place, she likes that she can pick up the phone and call her landlord. She tried to talk her little sister out of buying a condo, but her sister didn’t listen. Now her sister is making extensive calls to their father whenever she needs help with something.
Cara O’Brien wishes she could find a place online where she could get answers to the questions she has — one of which is, “How do I buy a home?”
Blunt Money breaks down the types of expenses and upkeep you can expect when buying a home, as opposed to being a renter.
13 Comments
For me, the flexibility argument is key. I’ve looked into purchasing several times, but each time I realized purchasing would reduce my mobility. Even when I lived in the same city for a whole two years (a long time for me), it was fun to switch apartments and see the city from a new viewpoint. Additionally, it would have been really hard for me to get out of a situation that wasn’t working (grad school) if I had purchased a home in the area.
On the other hand, my brother owns quite a number of homes, and it works well for him. He rents out most of the units (he owns duplexes and a four-plex). When he’s in town, he lives in part of his own duplex. When he knows he’ll be out of town for more than a few months, he leases it out. IF you have decent cashflow and the stomach for doing something like this, it can work out nicely. I should add that he owns next to nothing, so it’s really easy for him to throw his few possessions into storage while he rents rather than worry about someone using his things.
Great article, as always!
I bought a condo about 7 years ago. It’s been the best decision I ever made. It’s low maintenance, and a great option for single girls who don’t want to deal with the major upkeep of a house. Also if something happened and I wanted to move, I could always rent the place out fairly easily, since I live in a college town.
However, I do see the value of renting and the flexibility. Each person’s lifestyle is different, and it has to be the right time. And when it’s the right time, you just know it!
The dilemma when it comes to owning a home is that the benefit can be great when economic times are good; and the costs can be overwhelming when (like now) the economy goes to hell. It’s not just that your run the risk of losing equity value on your home when prices fall. When the market gets flooded with housing stock and buyers aren’t showing up in droves, you can get stuck in a place you don’t want to be, even if opportunity comes along elsewhere. The Economist recently had a piece on this question that I would recommend checking out.
I’m a WINK! lol. That’s hilarious.
I just bought a home last fall, but I live in a very affordable area (typical one-story/3 bedroom goes for around $140-150K). I was also able to live with my parents for a couple of years to save up money for my down payment. Also, my best friend lives with me and helps out with the mortgage. Had it not been for those 3 things, however, I’d be a renter – tried and true.
It’s been very rewarding, but in the 6 months I’ve lived in the house I’ve already had a new furnace, broken garbage disposal, and washer that sits in need of repair (and has for a couple months!). I guess the grass is greener….sometimes I’d love to call the landlord to fix things – oh yeah, and then there will be the lawn mowing this summer….
both renting and buying have their own pros and cons.
i love my condo (even though i am selling) because I can paint and decorate to my hearts content.
Right now, buying – especially since you have nothing to sell – is perfect. The rates and prices are low and in this area, that almost never happens.
I actually did buy a house with a roommate and it went rather well, but I definitely think it’s a big step. Not quite as big as marriage, since you’re only legally linked by your mortgage, but still…big. My roommate and I had already lived together for years as renters, and neither of us had plans to marry within the next three or four years at least.
Just a few things to take into consideration for people going that route:
KNOW your co-owner. Like, you need to really know them well. Have you lived with them before? Can you stand their habits? Will you be sharing a bathroom? What are your schedules like? Once you’ve got this place, you’re stuck with it at least for a while unless you want to lose money on the whole thing. Also, are they financially responsible? It’s a bigger deal with a mortgage on the line.
Strongly consider buying as joint-tenants. It might sound messed up to say so, but if your co-owner dies, it would be nice for their stake of ownership to revert to you and not to be up for grabs from their family. Also, my roommate and I had both made sure that we had life insurance policies that would pay off our half of the mortgage if we kicked it.
Also consider having a written agreement about how expenses will be divided up. Utilities, repairs, maintenance, etc. Don’t forget things like lawn care if you pay for that. It is also helpful if you have a schedule of chores so nobody gets snitty with anybody else because they feel like they’re doing more.
Have an exit plan in case one of you needs to move, get married, or something else. You should have at least some vague idea of how the whole thing can be taken care of without any hurt feelings – can one roommate afford to buy out the other? If one of you leaves, would the other be content with letting their half to another roommate?
You should have all these things ironed out before you ever sign papers. It’s easy to get excited now, but unless you both plan to be each other’s platonic lifemates forever, this is a starter home and one or both of you will eventually leave. Try to plan to all the possible outcomes you can think of!
I bought a townhome 4 years ago and really believe that it was the best choice in the world…for me. I was a WINK at the time but now have a husband and a baby and would like to buy a house BUT because I am an owner not a renter. We can not just run out and take advantage of this “great” economic time for buying a home. I believe that ownership is definitely the way to go, especially financially, in the long run but renting also has its perks.
For the next two years renting is the preferable option. Whilst property prices are nosediving, landlords will be desperate to hold on to their properties until the market recovers and they can only do this by renting them out. Rents can be negotiated downwards very easily at the moment
I’m in this boat right now. I live in the suburbs of NYC. Rent’s expensive. Owning is expensive. There’s no way around it. White Plains is optimal for me. Work, school, family and friends are all close. As well as metro-north to get into the city. And shopping in walking distance. My price range is about 1100-1500/ month. And that’s what rent goes for in the mid-range. But, so do co-ops. A 200K co-op withe 20% down will cost about the same per month (including maintenance/utilities). So, does it make sense to rent? Or spend the same amount monthly and *eventually* own?
If I could afford it (read: had a dollar to my name), I would totally wait for the market to bottom out and snap something up. Unfortch, it is not to be…
It all depends what kind of life you want- I’m big on traveling and I have a fear of commitment, so right now renting suits me perfectly
I have terrible house envy. I really want to buy my own place…but I’m stubborn. I know where I want to live, and what I want to buy…and so, until I can afford both, I will probably keep renting. I had a great-aunt who rented her same apartment (at the Kennedy Warren) for over 30 years. When she died?? Over a quarter of a million dollars was found in her bank account. Apparently, some renters do make money!