Renting v. Owning - Lifestyle Changes
When it comes to deciding whether to rent or own a home, many people immediately think about financial factors like down payments, mortgage rates, and credit scores, which is a great place to start. After all, it’s a big decision!
But while these are certainly important, there’s another crucial aspect to consider: your lifestyle. Your personal circumstances, job stability, future plans, and long-term goals should all play a significant role in the decision-making process. Renting and owning each come with their own set of advantages, and the best option for you depends on more than just your bank balance!
As a Colorado mortgage lender, I've seen firsthand how lifestyle factors influence the decision between renting and owning. Of course I’ll always recommend owning, but there are certain situations where it may be better to wait.
Here are some examples and insights into how your lifestyle preferences and future plans can determine which path is right for you.
Job Stability and Location Flexibility – Rent or Own?
One of the biggest lifestyle factors to consider when choosing between renting or owning a home is job stability and location flexibility. If your job requires you to move often or you’re in a temporary position, renting may be the better option. Renting does provide flexibility that owning simply can’t match.
Young Professional Example
Let’s say you’re a young professional who just landed a job with a large corporation, but you're unsure of where your career will take you. Maybe the company has offices in different states, and you're unsure if you’ll want to settle in the city you're currently in. Renting a home allows you to make the most of your location without the long-term commitment that comes with homeownership.
If you're in a position where you know you’ll be relocating for work or exploring different career opportunities over the next few years, renting offers a level of freedom. Renting typically comes with a lease term of 6 to 12 months, which gives you the flexibility to pick up and move without the burden of selling a home.
I’ve had friends and clients who relocated for work and found renting was the perfect solution. They had the flexibility to move with ease and weren’t tied down by the responsibility of owning a home. Once they settled into a permanent location, they were able to consider buying a home.
Homeownership for the Young Professional
On the other hand, if you have a stable job and you know that you’ll be in the same city or region for the long term, owning a home can be a good choice. Homeownership can offer stability, and if you're able to secure a mortgage with good rates, buying a home can be more affordable than renting in many markets.
Example
If you’re established in your career and have been in the same job for several years, homeownership might make more sense. Owning a home provides you with long-term stability and can be a great way to build wealth over time through home equity and property appreciation. What’s even better is if you do have a work-travel schedule, you could even rent out your owned-home to make extra income!
When working with clients who are settled in a stable job and community, I often suggest buying. There’s something deeply fulfilling about owning a home in a place where you plan to live for many years. Not only does it provide a sense of permanence, but it also opens doors to building wealth, especially in growing neighborhoods.
Future Plans
Your future plans—whether you’re thinking about starting a family, moving up in your career, or planning for retirement—can also influence whether renting or owning is better for you.
When Renting Makes Sense
Renting can be an ideal solution if you’re not sure what the next few years will bring. Whether you’re considering a career change, thinking about traveling, or unsure about your family situation, renting provides the flexibility to adjust your plans as needed.
The Undecided Example
Perhaps you’re in your late twenties or early thirties and thinking about starting a family in the next few years. But maybe you’re not sure if you want to settle down in the city or if you'd prefer to explore other areas first. Renting gives you time to make that decision without being tied down by homeownership.
Some of my clients have opted for the “rent first, buy later” option while they’re figuring out their future, and that’s totally fine! I’ve had families unsure whether they want to raise their kids in the suburbs or downtown, and renting has given them the freedom to try out different neighborhoods or even move to a different city for work before they commit to homeownership (PS - 9 out of 10 of those clients always ended up buying once they felt confident in their location!)
When Owning Makes Sense
If you know you want to settle down and build a life in one place, buying a home may be a better fit. Homeownership can be a great long-term investment, especially if you're planning to raise a family or if you want to establish roots in a specific community.
If you’ve just gotten married and are planning to start a family soon, buying a home in a neighborhood that fits your family’s needs could be an excellent choice. With homeownership, you have the freedom to create a space that suits your lifestyle and grow into it as your family expands. And with the market today, it’s possible to sell in a few years with better return on investment.
For families, homeownership offers a sense of stability. I’ve helped clients purchase homes where they plan to stay for 10, 20, or even 30 years. The security of owning a home where you can raise your kids and create lasting memories is often priceless, and the financial benefits—like building equity—can’t be ignored.
Long-Term Goals
Your long-term financial goals are another key factor when deciding whether renting or owning is right for you. If you’re someone who is focused on building wealth, homeownership can be an excellent way to do so, but if you prioritize financial flexibility, renting might better align with your goals.
If you’re focused on financial flexibility, renting allows you to avoid the long-term commitment of a mortgage, property taxes, and maintenance costs. You might also be saving for a different investment, such as a business or a significant life event, and renting frees up your capital to pursue those goals.
The Entrepreneurial Go-Getter Example
Imagine you’re someone in your early thirties who has dreams of starting a business in the near future. Instead of locking your funds into a property, you may choose to rent and use the money you would have spent on a down payment for your startup instead.
I’ve worked with clients who were focused on their careers or other ventures. Renting gave them the flexibility they needed to move freely, focus on their goals, and not worry about the upkeep and costs of homeownership. There’s no shame in waiting until the time is right for homeownership!
Building Wealth in Homeownership
If your long-term goals include building wealth and establishing roots in a community, owning a home can help you reach those objectives. Not only can you benefit from potential property appreciation, but owning a home allows you to build equity over time, which is one of the best ways to grow your personal wealth.
If you’re planning for retirement and want to have a paid-off home by the time you stop working, owning a home in your thirties or forties could help you achieve that goal. Paying off your mortgage before retirement means you’ll have lower monthly expenses in your later years, allowing you to enjoy your retirement without housing costs.
For my clients with long-term financial goals like retirement or leaving a property to their children, I’ve seen how purchasing a home can contribute significantly to their wealth-building strategy. With each mortgage payment, they’re not just paying for a place to live—they’re making an investment that pays off in the future.
Personal Circumstances
Finally, your personal circumstances—whether it’s your relationship status, family situation, or health—can have a big impact on whether renting or owning is best for you.
If your personal situation is in flux, renting may be a better option. This could be the case if you’re going through a major life change, like a divorce, a move to a new city for work, or taking care of an elderly parent. Renting allows for greater mobility during uncertain times.
The Situational Individual Example
If you’ve recently gone through a major life change, like a divorce or a death in the family, (I hope that’s not the case!) or maybe you are uncertain about your future, renting gives you the freedom to take your time deciding where you want to live next without the added stress of selling a home or dealing with the responsibilities of ownership.
I’ve been there personally, things come up and you just have to navigate as best you can. Some of my clients have had various personal situations, including divorce or job relocations. Renting during such a transitional phase makes sense because it allows time for adjustment before committing to the permanence of homeownership.
When Homeownership Makes Sense
If your personal circumstances are more settled—say you’ve been in a stable relationship, have children, or are planning to stay in one place for a while—homeownership might be a natural next step. Owning provides a sense of stability and permanence that renting can’t.
If you’ve been living with a partner for a few years and are considering starting a family, buying a home may offer the space, stability, and security you need for the long term.
For many clients, homeownership is about more than just a place to live—it’s about creating a foundation for their future. I've seen families thrive in their homes, raising kids and building memories, knowing that they’ve secured their space for the long haul.
So Which One is Right for You?
At the end of the day, the choice between renting and owning comes down to much more than just financials. Your lifestyle, job stability, long-term goals, and personal circumstances all play a huge role in determining what’s best for you. Renting offers flexibility and lower responsibility, making it perfect for those who aren’t ready to settle down. On the other hand, owning a home can provide stability, equity, and long-term wealth-building opportunities for those ready to make a commitment.
Whether you’re looking for the flexibility to move around, or you're ready to plant roots and invest in your future, I’m here to help you navigate the mortgage process and find the right path for your unique situation.
Let’s talk about your lifestyle and goals, and I’ll help you make the best decision for your future.
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Debbie Betts, NMLS #259629, is a mortgage lender under The Mortgage Co. NMLS #68929. Her license #100030463. This is information purposes only and is not a commitment to lend. Equal housing opportunity.