Buying Versus Renting
"A man builds a fine house; and now he has a master, and a task for life; he is to furnish, watch, show it, and keep it in repair, the rest of his days.”
— Ralph Waldo Emerson
When I graduated college, I lived in a two bedroom apartment that was comfortable, if not a little small. My landlord took care of things that needed fixing. The rent was easy enough to make, and I had good neighbors. I was free to come and go as I pleased, and I always came home to a plowed driveway or a mowed lawn. But, like most Americans, I wanted my own home, and I worked and saved until I had enough for a down payment. I found a small house in the country that I fell in love with, and I made an offer to the retired farmer’s wife. She said that I could have the home on two conditions – no smoking in the house and I get married. Nobody ever did smoke in the house, and I did eventually get married.
Fast forward to today, and I’m on my third home – and I can say with a fairly high degree of confidence (and this may shock the renters who are reading this) that I spend more time and money on my home than renters spend on their apartments. My own anecdotal evidence is corroborated by a recent study by Wharton’s Grace Wong Bucchianeri, a professor of real estate, which finds, among other things, that homeowners spend less time in social activities. This part of the American dream is not always what it’s cracked up to be, and, according to the study, homeowners are not, on average, any better off than renters. Here are some of my non-scientific explanations for the conclusions reached in the study:
Finding #1 – Homeowners derive as much pain from their home as the joy they gain from homeownership.
Explanation: I was really tired from spending the day bailing out my basement because of all the rain we’ve been having, so at first, the reason escaped me. Then, just when I had the answer, the handyman came to repair our dog fence, and I had to assist. I’m exhausted right now, but if the reason comes to me while I’m mowing the lawn, I’ll insert it into this post.
Finding #2 – The average homeowner tends to spend less time on active leisure or with friends when compared with renters.
Explanation #1: When people move, they enlist the help of friends. Friends stop answering calls after helping you move because they think you are going to ask them again. My friend’s haven’t called me much since they spent that beautiful fall weekend loading and unloading the U-Haul.
Finding #3 – The average homeowner tended to be 12 pounds heavier then renters.
Explanation: Homeowners tend to have larger decks than renter’s teeny, tiny decks and patios. Therefore, we can put larger barbecue grills on them. When you have that much barbeque square footage, it needs to be filled up. All of that food needs to be eaten by someone, and since our friends won’t answer our calls (see explanation #1 for Finding #2), we have to do it ourselves.
All kidding aside, I like some aspects of home ownership, and besides, who is going to rent to a family with seven dogs? Having a place to call my own is appealing, and in many cases it can make financial sense. But, the opportunity cost of home ownership can be high, and most online buying versus renting calculators don’t factor in the intangible costs. When I have to make a repair, or spend the better part of a weekend mowing and weed-whacking, that’s money and time that perhaps I would like to spend on other things. My friends, who can afford to buy a home but choose to rent, are free to spend their weekends as they choose. And if they really get the urge to mow the lawn, that’s just fine with the landlord.
When it comes to retirement, it’s easy to see the appeal of maintenance free communities, because it appears to solve the problems associated with traditional home ownership. Perhaps this idea will become mainstream for people of all age groups.
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