RENT VS OWN – CATCH 22 REALITY CHECK FOR YOUR BUDGET

Rent VS. Own – another most frequently asked question that is not so simple to answer.

There is such an unwarranted social stigma associated with the “status” of where the money goes each month to pay for a home. I strive to teach my children that the size and appearance of someones home is usually only an indicator of how large their monthly payment is. If more people realized that, we’d have a much lower number of divorce cases each year ( as finances seem to remain the #1 issue in marriage complications ) and people would have a lot more money to spend on actually LIVING the life in their home instead of allowing their home to stand for the life they may or may not live inside of it.

I’ve been on “both sides of the fence”, so to speak. We purchased our first home at well below market value, nearly gutted and remodeled it and continued to live there for another 8 years. When we outgrew it (3rd baby!), it appraised at more than $50k that what we paid for it and had invested in it.

Many of you know that I went through a divorce after 14 years of marriage. From that point on, I chose to rent. It has only been in the last 6 monthes that that I began to weigh the pros & cons of renting versus owning again – with the future benefits in mind, as I currently enjoy the predictability of my budget that renting allows.

In my opinion, unless you are gifted your home through inheritance, etc., as far as monthly budgeting is concerned, renting is the way to go for a period of time. Monthly budget costs when renting are predictable and do not fluctuate. On the flip side, your monthly payment as the home owner is usually lower than the market value set for rental payments. But with that lower payment as the property owner, you also incur unpredictable expenses. It’s a total catch 22.

I made a chart for my kids to fully understand the difference between Renting versus Owning a home and I thought I’d pass along for anyone struggling with the decision to rent or own – sometimes it helps to just look at the pros and cons in black & white!

RENT YOUR HOME :

When you rent your home, you make your monthly payments to the property owner.