[E27] Is Renting Really like Flushing Money Down the Drain?

<p>It doesn’t matter where you live in the U.S….the real estate market is scorching hot. And anytime you have a real estate boom, there’s a certain amount of pressure that bubbles up to the surface for younger buyers – particularly first-time buyers.</p><ol><li>Historically low interest rates (with threat of rising rates)</li><li>Rapidly appreciating real estate values</li><li>Social media frenzy (social pressure)</li><li>Fear of missing out</li></ol><p>Anytime you have financial pressures and social pressures converging, there’s a possibility for a dangerous outcome. </p><p>Buying a house is not bad (and can be very smart), but here are some reasons it might not be right for you...right now:</p><ul><li>Renting offers more flexibility<ul><li>Moving when you own a home is a pain + it’s expensive (8 to 10%)</li><li>With renting, you can move much easier when things change (job move, salary cutback, growing family, etc.)</li></ul></li><li>Renting requires no maintenance costs or unforeseen expenses<ul><li>If something breaks, it’s on your landlord</li><li>Less stress</li></ul></li><li>Renting offers access to amenities<ul><li>Pool, fitness center, business center, better location, etc.</li></ul></li><li>Renting requires no down payment<ul><li>Buying a house can destroy your emergency fund</li></ul></li><li>Renting requires no property tax<ul><li>Pennsylvania: 1.43% @ $300,000 property = $4,290/yr // $357/mo</li></ul></li><li>Renting insulates you from a crash<ul><li>It’s not hard to see a bubble forming...do you really want to buy before the bubble bursts?</li></ul></li><li>Renting requires cheaper insurance<ul><li>Average homeowner’s policy: $1,249</li><li>Average renter’s insurance policy is $179</li><li>Savings of $1,070 ($90 per month)</li></ul></li></ul>