Although I’m a homeowner, I’m not one of those people who thinks that you’re throwing away money by renting. I think every situation is different and you should base your decision of buying a home on your individual circumstances.
Last weekend I was talking to a dear friend and she was telling me that she was getting some pressure from her mother because she was still renting. My friend’s mother enjoys real estate and has several properties that she rents for income. She’s been doing this for over 20 years. My friend is not against being a homeowner but she knows that being one is not easy because she has seen what her mom has gone through managing her properties. In addition, and most importantly she is not financially prepared to be a homeowner.
I told my friend,” there’s nothing wrong with renting, especially in your case”. She’s been trying to get her financial house in order and trying to become a saver rather than a spender. She also has a special needs child who requires extra help that sometimes has to come out of her pocket. Additionally, she really loves the school district that she’s currently in for her son and she would never be able to afford buying a home in that school district. This point alone is worth her staying a renter.
The funny or maybe sad thing is while we were talking about this subject she received a phone call from her mother asking her if she wanted to buyout a leased BMW SUV that her sister was returning to the dealer. I felt bad for my friend because it’s not easy getting all this pressure from her mom but I told her she was doing the right thing for her case. Her mom obviously doesn’t get it and is really not giving her daughter the best advice. Mother doesn’t always know best.
I actually have another friend who lives in an excellent school district as well and I told her she should not even consider buying a home there because the taxes are too high. She’s better off being a renter for now until her daughter graduates high school. She’s a single mom and she’s doing just fine by being a renter.
Last month I was watching Suze Orman and she spoke about the Financial Lessons of 2013. One of the lessons was this very point – there’s nothing wrong with renting. She explained that just because mortgage interest rates are low does not mean you should be flocking to buy a home. She said, “remember it was this kind of thinking that got us into trouble a few years ago”.
My advice to my friend was, you’re better off renting. I told her she can continue getting her financial life in order and start saving for the future. In the mean time she’s getting access to an excellent school district where her special needs child can thrive. She made the right choice for her individual situation and she should not doubt that.
What are your thoughts on renting vs owning and have you ever been pressured to be a homeowner?