Rent. I could make this the shortest blog post ever because that’s all you need to know. You look like you need some convincing, though, so here goes. If you’re debating whether to rent or buy from out-of-state, please consider the downsides of buying. Realtors will disagree with me. Experts may disagree. Regardless, I feel strongly about this one.
I Bought a House. My Bad.
After moving ten times in eleven years, I’ve made more than my share of bad decisions. Buying a house in Knoxville, Tennessee tops the list because it stands out as my most expensive mistake. You probably know the drill. My husband and I whisked through the city, looking at neighborhoods, touring fifteen houses, visiting various schools and made decisions that would affect the rest of our lives. We did this in one weekend. Bad call. The question of whether to rent or buy wasn’t even on our radar. We also didn’t consider that the “rest of our lives” would only last a year and a half.
4 Reasons Why You Should Rent and Not Buy
Buying a House is Expensive
The costs associated with buying and owning a house or a condo add up. You pay closing costs, realtor fees, property taxes, maintenance, insurance, the list goes on. You’ll spend more money decorating, furnishing, and fixing up your home than you would a rental property. This all takes time, money, and energy. Buying a house, especially when you don’t know the city, can be a costly decision.
Selling a House is Expensive
Let’s say you paid $250,000 for a house or condo and you end up selling it for the exact same list price. You lose $12,500 to your realtor and we’re not even including additional closing or transaction costs. Add that to your property tax bill. Consider whether you could’ve rented for less. Also, it’s optimistic to think you could get the same price you originally paid. Buyers may assume you are a desperate seller if you are putting your home on the market a year later. Maybe you get $235,000 for your house now. After broker fees, you will get $223,250. That’s a loss of $26,750 in one year!
Renting Gives You More Time
When we moved to Knoxville, we picked a stunning house in a picture-perfect neighborhood. In the end, though, it turned out not to be the right neighborhood for us. Most of the kids in the area were heading off to college while we still had kids in diapers. In retrospect, we also would’ve chosen a different school for our kids. It’s not easy to evaluate a community in one weekend. Instead, give yourself time by renting in the short-term so you can fully appreciate all of your options.
Renting Gives You Flexibility
Starting over is a big deal and you don’t always know how it’ll work out until you get there. If your job doesn’t work out or if you need to move again due to unforeseen circumstances, you will be grateful for the flexibility that renting offers. Think of how easy it is to move when you choose to rent. Renters only need to give thirty days’ notice in most cases. Contrast this scenario with selling a house. If you don’t have the financial security to own two homes, you’ll be stuck in your current situation until the house is sold. It could be a while.
The Downside to Renting
You Need to Move Twice
Yes, if you plan on buying a house eventually, renting now will mean moving twice. I understand that the last thing you want to do is set yourself up to move again. On purpose. We needed to rent when we moved to Illinois because we couldn’t afford two mortgages. The move from the rental house to our current house turned out to be our least painful move of our ten moves. Since we kept many things in storage, we didn’t need to pack and unpack everything twice. We also learned what things we could live without. Now we look back fondly at that time because things felt simpler during those six months. See, even the downside of renting is a good thing.
Should I Rent or Buy?
Only you can choose what is best for you. Sometimes unforeseen circumstances require you to buy a house even when you would prefer to rent. The idea of moving twice may be too overwhelming. You may know the area much better than we knew Knoxville. All I can do is share my own costly mistake and hope that it helps someone. Did you make the decision to rent or buy when you moved to a new city? Let us know how it worked out!