Why I may never own a home again

46 thoughts on “Why I may never own a home again”

  1. My boyfriend also so far has lost money on owning a house. Over the last 10 years he has owned a place that so far has cost him 125k euros total in mortgage interest (after tax deduction), taxes, repairs, and depreciation … He could have rented a similar place for 100k over those 10 years, so until now buying has been 25k euros more expensive than renting. And the kitchen needs to be replaced, soon…

    I’ve been renting always, and when I wanted to move in with my boyfriend, I could, after ending the lease. Nice and flexible.

    1. Yup, all those ownership costs definitely add up, Petra. Everybody’s experiences will certainly vary, but most of the time we spend much more on ownership than we think. 🙂

  2. We wrestled with when/whether to buy a home for three years before purchasing ours, and during this time we concluded that it is not an investment. Entering the purchase with that in mind has made it easier to bear the flat market and lack of appreciation. And it’s helped us refrain from expensive upgrades that really won’t increase the home value much.

  3. Steve….As with most things in life, there are pros and cons to them. You did a nice job of outlining them for home ownership or not… I have been a home owner for over 35 years. Not the same house, just preferred owning to renting. To me, the freedom to adjust your house (painting/tile/crown molding or not) is a huge plus. Combine those choices with a tax benefit from the GOV for interest deduction makes it work. Being in CA, I have made money on most homes/condo I have owned, except one. Had to move for a promotion. Our last house I bought for 190K and sold at the peak in 2008 for 670K. Nice increase. Yes, we bought another home (only half the profit down) and it tanked. We have ridden it out and we are neutral at this point. CA housing is different. Very limited supply and huge demand. More than likely, we will take a hit when interest rates start moving up. I see a balancing of value to off-set higher rates. With all that said, I prefer to soak in my own jacuzzi, not share a community one. Thanks again for an interesting blog post. I enjoy reading about you and your wife achieving your dreams……Steve

    1. Thanks Steve, appreciate your thoughts. I guess this is one of those…you win some, you lose some, kind of deals. Nice increase, though, in one of your homes! I wish that was more common. I’d own about 10 homes if that were the case! 🙂

      1. I would like to say it was skill but, that would not be the truth. I purchased a home in a town that was not real popular at the time but, became one over time. People laugh but, they had a offer at the time…..buy a home and get a free car. It was catchy for the buyer. I took the upgrades for the value of the car. Our new home is 2,600 sq feet. Once the kids are out, on the market. Great home for a family but, not a retirement home. We just need to keep Google and Facebook in town hiring and paying kids 150K a year to drive the prices up 🙂

  4. When we bought our first house it was Summer 2008 and we got it for $210k. We sold it about 5 years later for $175k, like you we timed the purchase poorly. We were just moving to new jobs and they had relocation perks, so why not get a house, I mean, we’ve arrived! Yeah! Fortunately our company bumped us to only lose 5%, but like you we’d put in floors, a bigger back patio and other hidden upgrades like more insulation, insulation in the right places…. We realized that had we rented, we’d be up about $10k for that 5 year period. Even getting a house in Houston, again company relocation helps buffer costs a bit, we may be able to sell it for more than we paid. However, we’ve paid almost $1k/month for all of last year on home maintenance and upgrades. We also redid this backporch and landscaping, and while it adds value, we won’t see a full return on the investment. We enjoy the hell out of it, which is why we did it so early in this house, but we knew it wouldn’t be an “investment” lol.
    Also, Mrs. SSC found out that instead of buying a house outright when we move, we can de-risk our mountain living by renting and keeping that chunk of $$ invested for a few years, and it works out financially really well for us. When we decide we love it, we can look to buy, when we decide it’s too cold and we want to go somewhere else, we can just move with nothing to sell, fix up, or worry about.
    We will probably get another house at some point, but like you we realize for the most part, they’re a money hole that just keeps asking for more and more and more. 🙂

    1. A money hole is right, especially in my case. One of my favorite benefits to renting is the ability to move around. We aren’t ones to wanna stick around an area for decades upon decades. We’re wanderers, I guess. New scenery is the spice of life!

  5. I’m a fan of home ownership when it makes sense. In our particular case, it did. We bought from the city at auction and paid $108,000 for what was probably a $140k house. Then we nearly immediately cashed out the equity (the bank valued it at $167k I think). Instant cash to invest in the market!

    Our mortgage was about 40% of what rent would have been on the same type of house in the same neighborhood ($450-500 for 30 year mortgage vs $1200+ for rent). Add in the taxes, insurance, and maintenance and we’re still ahead each month by a few hundred dollars (plus the $100-200 in equity we were “paying ourselves”).

    Fast forward 12 years and we managed to pay off the mortgage and only have those other carrying costs like taxes, insurance, and maintenance to cover. In hindsight, purchasing the right house was a good choice but we managed to buy cheap and buy at a decent time and not overextend ourselves. It’s been a cheap way to own ample space to raise 3 kids.

    I don’t love the concept of home ownership though. Eventually I wouldn’t mind downsizing to a much smaller apartment/condo/townhome once the kids are out of the house. Not so much for the cost savings, but because of the lifestyle changes that come with owning less. I don’t get a huge thrill out of DIY tasks or mowing the lawn for example.

    1. Definitely sounds like you found a great deal on that house! Finding a home for nearly $60,000 less than its value is definitely an awesome happenstance. Don’t blame you for buying that place and paying off that mortgage quickly. Having no costs rather than taxes, fees and maintenance will definitely help make home ownership much more cost effective.

  6. Amen. I have a hard time imagining that we’ll want to own anytime in the foreseeable future. Renting provides a level of flexibility that we really value — both in terms of time (no weekends wasted on landscaping, repairs, maintenance, contractors, home improvement stores…) and location (whether that’s the ability to move across the country on a whim or just change neighborhoods within the same city).

    1. Flexibility is a huge benefit – probably our favorite benefit of renting, in fact. We don’t like the feeling of being “tied down” with a home. I certainly have been tied down over the past 8 years of my experience owning a home. No more! 🙂

      1. hi Steve….great post. I am a realtor in Michigan. The only way to truly justify homeownership is to pay cash or pay off the mortgage fast and hope you don’t have a lot of repairs and maintenance costs. I don’t have a mortgage but the cost of property taxes and homeowner’s insurance and maintenance is way cheaper for me than anything I could ever hope to rent in my area. With no landlord there is no rent increases and I get my tax write offs too.

        1. Hi Mike, thanks for the comment. Agreed, a fast mortgage payoff and a little luck will help keep those extraneous costs down. Unfortunately, not very many of us actually do that. I certainly didn’t back when I lived in my home. Heck, I’m STILL not, but I gotta ride out of the rental lease before I can sell that thing.

          Soon! 🙂

  7. I have owned a few homes in my life. And I wouldn’t call any of them great investments. They were great homes and I was happy living in them, but the economics have never been very good.

    I haven’t done the math on renting vs owning in a long time, but you bring up some good points. Maybe I’ll take another look.

    The one thing I have felt is that home ownership reduces your flexibility. While we can say that we could just sell our house and move, that’s not entirely true. We have deferred maintenance costs. We have real estate fees. Plus, I would say that we have accumulated way more stuff than if we had been renting all these years.

    1. The flexibility aspect is a huge one – more important than a lot of people realize, especially me. I wouldn’t have stayed in my old house nearly as long as I did if I had the flexibility to up-and-move when one of my leases expired.

      Thanks for the comment!

  8. We own 2 properties and are in a different market (Australia) where financially is has been worthwhile. But I totally agree there are lots of costs and some unpredictable – sewerage in your front garden, hot water tank exploding and damaging your kitchen cabinets and floor boards … speaking from experience.
    There are also the time costs – cleaning, gardening, maintenance etc which often people under-estimate.
    I’m loving your Airstream story – living vicariously through you as I look at the weeds in my garden I need to pull …

    1. Ha! Thanks PE, appreciate the comment and the kind words. We are trying our best to keep our costs down and responsibilities to a minimum, especially when it comes to things like yard work. Of course we’ll never *completely* rid ourselves of maintenance, but a reduction is always welcome! 🙂

  9. We should be the last to agree with most of your analysis as we own our primary home and our future FIRE home. The logic is hard to argue with overall.
    Some other aspects worth considering are practical – you can design your home to meet environmental beliefs – solar etc. We have started a tiny piece of this with solar panels on our secondary home. We’ll be off grid eventually. A small start but a start.
    The other aspect is emotional. You get to shape building the aesthetics and environment of your own home that builds a lifetime of priceless memories for children, spouse and extended family.
    It’s got a number of intangibles that are very hard to put value on.

    1. It’s very true, there is so much involved in this debate that it’s real tough to blanketly state that one is always more or less expensive than the others. Locations are different. Homes are different. Neighborhoods are different. Cities, jobs, crime – and the personal choices that the resident of the home decides to pursue…it all adds up to what the true value is for YOU. For me, it’s been an expensive proposition, no doubt.

  10. I must admit, as a fairly regular reader of this blog, I’m more than a little disappointed with this post. I think you missed the mark a little bit If you are going to be someone who buys and sells their primary residence often, then sure, owning a home could be risky. However, if you are the type of person who lives below their means, makes sound financial decisions and stays put in your home for a long time, home ownership will always be cheaper than renting. Now if your argument is solely based on flexibility, then sure home ownership may not be for you and renting often times will be cheaper. No worries though, I do thoroughly enjoy your blog and keeping up with your adventure.

    1. Hi Simple Saving,

      I appreciate your insight! I definitely agree that there are ways to make home ownership far less costly than it otherwise would be. I also agree with your point about the longer you stay in the home, the better value it usually becomes. My intent for this article was to describe my personal experience with home ownership in general and get people thinking about how expensive this whole proposition truly is. Just like working a regular job, it’s generally more costly than many of us realize.

      Again, appreciate your comment and your readership! 🙂

  11. I think we’ve been super lucky in the timing of our property purchases (first place: early 2009, after the main crash / “forever home”: summer 2011, pretty much the bottom of the market in our area / rental: early 2014, right before a local housing boom which has that place’s value up about 30% in two years, theoretically). And we’ve also bought way less than we could afford in every case, so will only have had our mortgage for about six years by the time we pay it off next year. That makes a huge difference in how much we’ve paid in fees and interest! But either way, I think it’s a totally valid point that renting is not necessarily the “worse” option, reserved for people who don’t have their shit together. It’s a completely legit financial and lifestyle choice that’s right for tons of people. In my case, as a more risk-averse person, I like knowing that we’ll be mortgage and rent free soon, and that our only major expenses will be property tax, utilities, insurance and upkeep. But all the downsides you mention are for sure there as well.

    But hey, I think you can at least take comfort knowing that if you’d just invested your down payment in 2007 instead of buying that house, you’d still have been taken the cleaners for a few years by the markets. 🙂

    1. Yup, you guys definitely know how to time your real estate purchases! And paying off your mortgage early – man, that’s a freaking gold mine of savings, too. I will admit that there’s an awful lot of security in being both mortgage and rent free. No doubt about that. We’ll get to experience that this year – aside from campground fees, of course, when we do stay in one. 🙂

  12. Thoroughly enjoyed the read, my friend. Although we own our home, I have never thought of it as an investment, rather I see it for what it is, a place to entertain family and friends; and to lay our heads at night. I often tell people that your primary residence is where you live, if you want to invest in real estate, do so through REITs, rental properties, etc. There is no doubt that renting works better for some and is a viable option. The key, with all financial planning, is to develop and manage a plan with your specific needs/wants in mind.

    1. Thanks James – you definitely have the right attitude about this. It’s a place to call your own and house/entertain your family and friends. And yep, if you want to invest and make money in real estate, there is huge wisdom in doing that elsewhere.

      As always, appreciate your thoughts!

  13. Just getting around to commenting since we are actually camping in our trailer now. We mentioned this recent post to a couple a couple campsites away who have recently sold their home and bought a motor home – becoming full-timers. Sound familiar? 🙂

    I agree that home ownership is not always or maybe never a guaranteed return from an investment perspective. We have plenty of past personal and rental property experiences to confirm. Here is how I distill the argument to the fundamentals to owning:

    Pros for: If you feel you must have the pride of ownership, you plan on staying for awhile, you want to personalize your place, you pay cash or eliminate the mortgage quickly, and you buy in a growth area.

    Cons against: You like to move every few years, you hate maintenance items, you don’t want to lock up your money and can earn more on it elsewhere, you don’t accumulate a lot of stuff and it is easy to move.

    I think one last factor that I have noticed with people and home ownership – the lower the cost of the home is compared to your overall net worth, the more likely you will own.

    My $.02

    1. I think your $.02 are spot on, Bryan. The shorter the mortgage term and the longer you stay in the house, the better financial proposition it ultimately becomes. No doubt about that.

      And yeah, that sounds familiar. Very familiar. 🙂

  14. “Renting is only “throwing your money away” if you believe that the taxes, fees, insurance and maintenance that comes along with a mortgage and home ownership is money well spent. I do not.”

    I hear you on that one! So many people ask me and my partner why we want to continue renting and often these are the same people who are having to fork out to maintain their buy-to-let properties! I think if its an investment such as a family home and you’re going to do it up, pay it off and keep it, then fair play to you. But I can’t understand people who sit there losing money in maintaining property and then have the audacity to harp on at those who rent… especially when we pay someone else’s mortgage!

    1. Hey Jenna! Yeah, there’s a strange stigma with renting, unfortunately. People just *assume* that you’re supposed to buy if you can supposedly “afford it”. Though I’m a big believer in the phrase “just because you can doesn’t mean you should”. If it makes sense to buy, then cool – go forth. But don’t just assume it makes sense. Ensure it really does! 🙂

  15. I “timed” my condo purchase really well – mid-2012, which was the bottom of its value according to Zillow. I could now sell it for about 40% more than what I paid for it. To top that off, had I rented over the same time period, I would have paid about $98,228.64 in rent costs up until now, but I’ve paid only $55,361.68 to own. If you count closing and selling fees against the original purchase price, I’m ahead of renting by $7,116.96 now, but add in the increase in value, and I could sell the condo and pay rent for 5 years just out of the cash from the increase in the condo’s value. That gap will only widen – this year I estimate it will cost about $12,000 to own the condo vs $30,000 for me to rent. I’ve also paid off over half of my mortgage and I’m sure the remaining half isn’t too far behind.

    If you want to move a lot, renting is clearly a better plan. But if you’re okay with staying for a while, homeownership in some places and times can be not a bad deal.

    1. Sounds like you did it right, Leigh! Definitely agree with your assessment regarding moving around vs. staying in one place for a long, long time. The longer you stay (and the faster that mortgage gets paid off), the more likely that we’ll actually make a REAL profit off of our homestead.

  16. Owning a home is a dream for every individual. In India, the income tax subsidies are a major reason for home sales.
    Not sure if I would ever own a home, but I like the concept of rental yields and it all comes down to location. The biggest deterrent for me is the debt associated with home buying and I donot want to work all my life just to pay it off.

    1. Ah yes, those income tax subsidies. We have them here in the U.S. as well, though perhaps not quite as much as India might. But, you said it right:

      “…and I do not want to work all my life just to pay it off”.

      Amen. 🙂

  17. I think the key point here, and the point that you make well, is that the “American dream” looks different for everyone.

    For me, home ownership is a dream (even though I realize there are significant hassles and expenses associated). But for others, travel or volunteerism or some other calling might be their version of the American dream.

    What I love about this country is that we can all define that dream for ourselves.

    1. Exactly, Andrew. There isn’t a one-size-fits-all definition of the American Dream. We all have our own idea of what this whole thing means. 🙂

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