If I had a cocktail for every time my mother e-mailed me and told me that “Carrie, honey, now is the time to buy”, then I’d be one drunk ‘lil lady. (Love you, Mom!)
If you’re a 20-something like me, you probably know that renting instead of buying is the biggest financial no-no according to our parent’s generation. It has been ingrained in them to buy, buy, buy. Sure, you earn equity in a home and enjoy that warm, fuzzy feeling of “home ownership”, but what’s the rush if you’re not prepared?
Lloyd and I plan to enjoy all the perks that renting has to offer until we are 100% financially able to purchase our dream home. Check it out:
1. I flushed my deodorant down the toilet. True story. I was rushing to get ready for work one morning and somehow simultaneously flushed the toilet while knocking deodorant into it at the same time. How is this possible? I still have no idea. But, damn, that Lady Speed Stick was jammed in there and was not going ANYWHERE. Lloyd and I don’t know Rule #1 when it comes to fixing a toilet. Thank God we can just call our apartment fixer guy, er…I mean, Maintenance Man.
2. Snow in April. It’s Kansas City. The weather is out of control. My apartment complex shovels my walk way and my driveway for free. No further explanation necessary.
3. Lawn Boy. Although I don’t mind mowing the lawn (hell-oo tanning and leg workout package deal), it’s still not as fun as lounging by the pool on a Saturday afternoon. Plus, who knows how much a lawn mower is these days?
4. No Interest Payments. Lloyd and I are planning to buy a house in the $200,000 range and plan to put 20% down as to avoid the dreaded PMI insurance. I did a quick mortgage calculator online this morning based on an $180,000 loan at a 5% interest rate and the numbers scared me. For a 30 year loan, we’d pay some $175,000 in interest over 30 years. Our goal is to be financially stable enough to qualify for a 15 year loan. Guess how much interest we’d pay on a 15 year loan? Approximately $75,000. I’m sorry, but home equity or no home equity, if I can rent for a couple extra years to save $100,000 in interest, I’m gonna do it.
5. PMI Insurance. It always amazes me that people my age rush into buying a home so fast they can’t put down 20% and get hit with the PMI Insurance. For a $200,000 loan at 5%, PMI Insurance is about $170 per month. I know some people avoid this by taking out an 80/20 loan, but why not avoid all that hassle but just saving for awhile longer?
6. Amenities. I mentioned last week how great it is to walk across the street to my apartment gym versus driving 10 minutes across town to my regular gym. Plus, on top of the gym, there is the pool, the free DVD library, the free mountain bikes, racquetball, free Wifi, and free continental breakfast. (I swear I don’t live in a hotel…)
7. Cheap Rent. Our monthly rent is way cheaper than what we’d pay on a house even with a 30 year loan. This is allowing us to save about $3,000 per month in total to put towards our down payment and other savings. Not to mention the fact that we don’t have to shell out a month of savings if our air conditioner breaks down.
8. Live in Luxury. You can live in a part of town that you normally wouldn’t be able to if you bought a home. The homes around our apartment are in the $400,000 to $1 million range. Umm, that is so out of our price range. But, as renters, we get to enjoy the neighborhood for less!
9. Referral Bonuses. I just received received $250 for referring a friend that lives in the complex I moved into. Can’t beat free money!
10. Renter’s Insurance & Property Taxes. My renter’s insurance covers WAY more than I even own and I swear it’s like $10 a year. CNN Money says the average annual amounts for property taxes and homeowners insurance are $3,500 and $481, respectively. After my calcuations, $10 is less than both of those amounts.
Of course, there are plenty of cons to renting. I could go on and on about how many times I’ve cursed my neighbors for playing their music late at night or not being able to get a close parking spot.
Lloyd and I don’t want to rent forever and we have lofty dreams for our first home. But, until then, why not enjoy the little things that renting has to offer while we can?