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Dance off! Why renting rocks home ownership’s world
Uh oh. Looks like we started something.
Fellow multihousing blogger Jessica Fiur has fired back at our assertion that renting an apartment is more popular among members of the Millennial generation than purchasing a home. She believes that people in their 20s and 30s are buying homes – rather than just renting apartments – because they are savvy with their money and interested in making investments.
We’d counter that they’re just scared.
The people we know who’ve made recent home purchases have been motivated not by investment potential or life changes like marriage or kids, but fear. They throw around terms like “bottom of the market” and “great opportunity” like they are life preservers made of money.
But is buying a home really such a great investment?
The answer, according to real estate professionals, is “it depends.” If you are purchasing an income property to hold onto for life that will have plenty of time to be improved and appreciate in value, than the answer is “probably, yes.” But if you are planning to use the home as your primary residence, watching it increase in value may be like watching grass grow, and you may be really old before it seems like you made a smart move.
The crazy leaps and bounds that the real estate market made back in the mid to late 2000’s aren’t around anymore, so even purchasers taking advantage of the down market face an element of risk. A combination of smart purchasing decisions, luck and selecting the right location for your new place are key.
So MHN, it isn’t that we are ready to throw down and brawl, er, “dance” with you. We certainly have friends who are trying to capitalize on the current market conditions, too. They’re the ones who stopped talking about anything interesting and now spin long stories about their home improvement projects, which all seem to involve at least 15 trips to Home Depot. But on the whole, it seems like more people our age are putting their money into renting apartments – multifamily housing gained 5.1 million residents over the last decade or so – and that stampede of feet just can’t be wrong.
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Make room on the dance floor!
Interesting that fear is mentioned in this post.
In the related article, “Why We Rent,” the individuals interviewed expressed fear that they’d lose money on the house, may get divorced and lose financial support, may lose their job, or may suddenly stop traveling and enjoying life if they get a mortgage. (Is there really data showing that homeowners travel less than renters?)If anyone seems motivated by fear, it’s renters.
More food for thought: yes, home values fluctuate for better or for worse, yet homeowners reap the benefits of value increases. Renters will never reap the financial benefits of value increases in their units. Rather, they pay higher rent without the hope of gaining equity. They just make their landlords richer.
Secondly, this blog features plenty of DIY and home improvement articles so homeowners aren’t the only ones running to Home Depot and telling stories about it! Homeowners simply have more options because there aren’t lease stipulations to limit our creativity.
Renting is optimal for those who are transient and value their mobility. I’d argue that the intrinsic value or renting stops there.
Bring your A-game to the dance floor next time