Top 10 Reasons to Not Become a Homeowner!

Wait, did you read that correctly? It did say top 10 reasons to not become a homeowner, right? Doesn’t that go against everything real estate agents typically stand for?

Well, we didn’t become the best agency in Westerville by lying to our clients and, to put it bluntly, becoming a homeowner just isn’t the right option for everyone. Purchasing a property and taking on a mortgage is a big commitment, one that not everyone is ready for. Plus, there are plenty of reasons and circumstances which may make renting the best option.

Today, we’ll explore that further by discussing the Top 10 Reasons to Not Become a Homeowner. Read on for more!

1. Houses Cost a Lot

Most properties cost considerably more than your average person earns in a year. That means you’ll need to dig into the savings big time, take out a massive loan, and possibly settle for less equity upfront if you’re going to become a first-time homeowner.

For most people, buying a home is one of the biggest purchases they’ll ever make, but parting with the down payment and covering the closing costs is only the beginning of this massive expense. Once you close, you’ll have to cover the mortgage for many years.
And, if you can’t pony up 20% for the down payment, you’ll have to cover PMI to boot. So, going back to our original point, to say that houses cost a lot is an understatement. Not everyone has the savings available to realistically or responsibly take on the responsibility today.

2. The Upkeep is Never-Ending

You scrimp and save, stick to a super tight budget, and you finally come up with the savings to find and close on your starter home. Kudos to you, but you’re about to learn another hard lesson about home ownership: the upkeep.

Seasoned homeowners will give a sarcastic chuckle and lovingly refer to their home as “a money pit,” and that’s unfortunately true for many homeowners. Just when you come up with the money to renovate the kitchen, the hot water heater springs a leak or the retaining wall in the backyard starts to buckle. So, you pivot and put the important stuff first and rarely, if ever, get the chance to spend that money on something fun instead. It’s literally never ending.

Meanwhile, renters need only give a call to the landlord or property management office to get service in a pinch. Many leases offer extensive service that covers most major things, meaning they’ll never go out of pocket to fix things like appliances, toilets, leaks, and more.
So, while the renters are saving for a sweet vacation, the homeowners are stuck footing the bill for costly repairs. It all seems so unfair.

3. You Can’t Move As Easily

Renters get the luxury of picking up and going wherever they see fit, so long as their lease is at a natural end so they can dodge those all-too-common early termination fees. They’re free to try out new apartments and buildings, new neighborhoods— heck, even new states if that’s what they want to do.

Homeowners, on the other hand, don’t have it so easy. If they’re bent on moving, they have to list, show, and close on the house to get out and, depending on how much equity they’ve built, they may suffer a financial loss if they’re leaving before the all-important breakeven point.

Homeowners can definitely move if they have to, but it’s much more involved than it is for renters. So, if you’re the type who likes the freedom to go where they choose with ease, becoming a homeowner may not be for you right now.

4. Renting Can Be Cheaper

Owning a home has the distinct advantage of building equity, so, as you make your mortgage payments, you slowly become the owner of what will become a major wealth asset in your portfolio. Renters, on the other hand, will never own their apartments simply by paying their rent, so the money does not contribute to building wealth in the same way.
That said, renting remains the cheaper option in most major cities and, since renters will wind up with some extra cash on hand, they’re free to allocate that money wherever they see fit. They can keep it as disposable income and enjoy more luxuries today, invest it in an interest-bearing account or other investment to build wealth elsewhere, or put it in savings for the day that homeownership seems like the more attractive idea.

The point is renting puts more money in your pocket today versus down the line, which may, in the long run, prove to be more effective for your long-term financial plan if properly utilized.

5. Your Job Requires Travel or Relocation

Buying a home is a serious commitment that some working professionals don’t want or need. That especially includes people working in industries that relocate them every couple of years or require them out on business trips regularly for client face-to-face meetings around the world.

What’s the point in entering a 30-year mortgage if you’re going to move every 3 years or spend less than half of your time actually at home?

For some professionals, renting provides much more flexibility and may even allow the option for subletting, helping them earn passive income while they’re away for work. These individuals could do well with homeownership, but they have other options.

6. Your Love Life and Family Life is Uncertain

Some people feel compelled to check all the traditional boxes as they age, including getting a degree, getting a good job, finding a partner, getting married, buying a home, and having pets or kids, not necessarily in that order. There’s nothing wrong with that and it’s a rewarding path for a lot of people, but it’s not the only path or the right path for everyone.

Even if it is what you want to do, you may find yourself checking these boxes in the “wrong” order, leaving many things in your life uncertain. And, when it comes to finding the right home, you want to be sure (well, mostly sure) of some things.

For example:

Are you getting married soon?
Will you need to cohabitate with your partner first and, if so, do they have their own apartment or house you need to move to or get rid of first?
Do you want kids and, if so, how many?
Do you need all those bedrooms in your starter home or do you have a timeline in mind for how soon you’ll need to possibly upsize?
What if you wind up having twins?

The good news is you don’t need all these answers today, but they’re important questions to ponder before finding and buying a home. The last thing you want is to go through that process only to find that the place isn’t going to work out for what you need.

Until you have some clarity, renting is a great, flexible option that gives you time to decide what you want and see what you get.

7. You’re Only Doing It To “Keep Up With the Joneses”

Many of us are reluctant to admit it or may not even be aware of it, but we make a lot of major decisions based on social pressure and norms, even if it’s a bad time.

Let’s say you’re fresh out of college or graduate school, you may or may not be staring a staggering amount of debt in the face with minimal savings at your disposal, but your parents catch you up with all the neighborhood gossip and you find out a lot of your classmates are tying the knot, driving new cars, buying homes, and having kids.

You want to be happy for them, but a little part of you feels like they’re doing all the things you feel you should be doing, so you decide you’ll show everyone you’re just as good and buy your very own home so everyone can see how well you’re doing.

We’ll be blunt: that’s a terrible reason to buy a home! You should only buy a home if you’re sure that’s what you want and it’s a good time for you to responsibly accept that kind of responsibility. If your life is still uncertain, if you’re in debt, if you’re still focused on other areas of your life at the present moment, it’s okay to let everyone else do what’s right for them while you navigate what’s best for you. There’s no shame in that.

Of course, that won’t stop your parents from going on and on about that kid down the street you used to play with and how well they’re doing, but parents will be parents, right?

8. You Can’t Afford Where You Want to Live

We’re all searching for our coveted “dream homes” that contain all of our must-haves, most or all of our nice-to-haves, none of our dealbreakers, and fit our budget nicely. In reality, we rarely get everything we want and wind up compromising something in the process.

Compromising on the exact neighborhood you want is a common one and, in many cases, it’s fine, but sometimes it’s a really bad move. Buying property in areas with lower-ranking schools and high crime rates puts you in potential danger while also complicating the resale process and diminishing your potential return on your investment.

Some areas are prone to natural disasters too, meaning you may wind up with floods, earthquakes, tornadoes, heavy thunderstorms, blizzards, and other phenomena that hike up your insurance costs and work to destroy your property more often than you’d like.

If you can wait to become a homeowner in a year or a few years when your financial health improves, you may wind up with a much better deal, a much better investment, and substantially less headaches.

9. The Market is Declining

Let’s say you have all your ducks in a row: your financial health is great, you’re recently married and know generally how many kids you want, you have a steady job, and it’s a good time for you to take that step towards homeownership, but the housing market is in decline.

The best way to get the most from your investment is by buying low and selling high, but a market poised to decline puts you at risk to suffer a loss on your investment until many years down the line when the market corrects the downward trend.

Unfortunately, it’s difficult to determine precisely when that will happen, but your local real estate professionals should have insight on the matter that they’re happy to share. It may mean buying a home today is not the best investment choice, but a year or two can make a major difference and help you enjoy an overall better return on your investment.

10. You Don’t Want to Own a Home

Going back to what we said about people making major life decisions based on social norms and social pressure, there is 100% no rule that you have to buy a home one day. Many people prefer the convenience and flexibility of renting and so they rent for the entirety of their lives. They’re happy renting, so why mess up a good thing?

If you don’t want to own a home, you don’t have to buy a home, despite what friends, families, financial advisors, and everyone else might tell you. It’s your life and you deserve to live it the way you choose.

So, if you’re not interested in home ownership, don’t be a homeowner. But, if you do, feel free to contact us anytime and we’ll be happy to assist you.