It’s conventional wisdom I’ve bought into my entire life: “If you’re renting, you’re just throwing money away.” I never questioned the theory until M brought it up during what was otherwise a pleasant and uneventful walk.
“What if I just took the money we saved for a downpayment and invested it?”
I dismissed the idea immediately. Buying a house is an investment! And much less risky than putting all your money into stocks… I assumed. But as we talked around and around the idea, I felt a pit of dread growing in my stomach. What if it didn’t make sense to buy a house? What if we ended up renting forever? Would pragmatism make up for giving up a goal that’s been so important to me for so long?
It became clear that the only way to resolve the dispute was to look at some actual numbers. M made a spreadsheet and calculated the return on investment over time (adjusted for inflation). We added a row for house value over time, and savings from not paying rent. We adjusted for increases in rent over time. We adjusted for inevitable house repairs. We did a whole lot of guesswork with limited information–and then we found this: an official “rent vs. buy” calculator put together by someone who knows a whole lot more about this stuff than we did!
To be fair, there are a lot of unknowns involved in buying a house or renting an apartment in a certain city. Every house is different, and every city changes over time. There is no way to know the exact best choice. Our case was even more ambiguous–the numbers came out almost even, with renting slightly edging out buying if the price of the house was too high.
I didn’t realize how important owning a house was to me until I was confronted with the idea that I might not be able to. The idea of never having my own yard, never being able to renovate, and worse, having the threat of eviction always hanging over your my head… it seems worth buying just to achieve the secure lifestyle I’ve always dreamed of. However… there’s the flip side: living (at least temporarily) without a cash emergency fund, being locked into a huge debt in an unpredictable economy, being fully responsible for expensive repairs, and fact that the home losing value for any number of reasons… buying a house isn’t as safe an investment as I had always assumed.
I’ve felt a little unsettled since making this discovery. It’s worse knowing that M and I aren’t entirely on the same page about such a major life decision. The only silver lining here is that we’re happy renting for now, able to save money and live a lifestyle we enjoy in a city we like. Renting is a much less permanent decision, and we’re able to keep our options open… for now…
Art Source: Pixabay, CC0 License