About a year ago, Jason and I were in house hunting mode. I spent my lunch hours scouring real estate websites looking for deals. Weekends and evenings were spent setting up times to check out potential homes. It was exhausting. We wanted a house badly, partially to cash in on the First-Time Home Buyer credit and partially because we saw it as a good investment. After looking at our budget over and over we decided it would just have to wait.

Fast forward to now. We’ve signed a new lease for an apartment and are settling in for the long haul. I couldn’t be happier with the decision, so I thought I’d outline some really good reasons one might choose to be a renter rather than an owner. To be clear, this isn’t intended to discourage or mock home owners in any way but rather to challenge the idea that renting is just “throwing money away.”

[Just to clarify, when I use the term "owner," I mean someone who has a mortgage on a home, not someone who owns a home outright.]

1) Grounds-keeping duties are not your problem

Hate mowing the lawn, pulling weeds, or shoveling snow? When you rent, all of that is taken care of. Instead of spending time doing those types of chores, you can spend your time doing things you enjoy.

2) Maintenance is included in your rent

It’s a big relief knowing that if an appliance breaks, your landlord will take care of it. No need to worry how an unexpected repair will fit into your budget. It just gets fixed.

3) You may not be responsible for all utilities

It’s fairly common for at least some utilities to be including in your rent. Heat, water, and trash removal have all been included. This is simply impossible in the land of home ownership. And depending on what you’re renting, your utilities might cost a lot less than a home or condo.

4) If your financial situation changes, it’s much easier to get out of a lease than a mortgage

Consider two families. Family #1 rents a duplex, while family #2 owns a home. The economy starts to downturn and layoffs mean that both families are now down to only one income. Family #1 decides that it it would be best to break their lease and move in with a very generous relative until they get back on their feet. Family #2 also has a generous relative, but “breaking” the mortgage isn’t an option.

The point is that Family #1 has a lot more flexibility to make drastic changes in order to prevent going into debt. Though breaking a lease will result in a fee, it’s a one-time hit. Getting behind on a mortgage can really quickly snowball into foreclosure.

5) You don’t have to pay property taxes or interest on a loan

A major factor that caused Jason and I to stop house hunting was that we weren’t sure we’d be staying in Lansing for a long time. If we had found a house, the first few years of payments would have just gone to paying off the interest on the loan. Therefore, a home is a good long-term investment.

Property taxes are an easy to overlook part of home ownership. They can significantly change how what mortgage payment you can afford and they never go away. As a renter, you don’t directly pay property taxes, rather, it is included in your rent payment.

Conclusion

This probably sounds like a renter trying to justify the fact that they couldn’t afford to buy a home, but that’s definitely not the case. We simply took a hard look at our finances and realized it wasn’t the right time for us. We don’t regret our choice and have learned that home ownership isn’t always the best option.

Update 05/31/2010: Jason found a helpful calculator for determining how long you would need to live in a house for it to be better than renting.