Why will you rent a house when you can buy one? Hmmm… Why indeed. Don’t get me wrong here. I do own a house back in my city of origin. And until today I still have mixed feelings about the house. Questions like, why did I buy it? Why I didn’t I just rent it?
Why would you want to buy a house? Is it because of the myth that land value doesn’t depreciate? Really? Think about that again when you ask the people of Marikina that question. Remember Ondoy! Sense of fulfillment? Sure… what kind of fulfillment? Spiritual? (It won’t feed you) Or monetary? (It won’t make you rich) Wealth is not the amount of money you make but in the buying power that you have. Can you buy the house outright? Doubtful. Chances are you’ll be taking out a mortgage loan to buy it. Isn’t that right, my friend?
How about the argument to save on rent? Your loan amortization is your rent. Why make someone else richer from the rent? Think about that one, too. Chances are the owner of the home you rent is also paying a monthly amortization for the loan they took out to buy the place. Plus they have to pay the taxes on the property you’re renting. Not you. They also have to pay for the maintenance, repairs and general upkeep.
There’s also the argument that homeowners make better citizens. Being a better citizen does not happen by owning a home. It’s about reaching out to your fellow citizens and helping the country be a better place to live in. That they contribute to the overall economy of the country they live in? How? By adding to the overall debt to equity ratio of the country?! Our country’s already up to neck deep in foreign debt (if not yet drowning in debt). Don’t think your debt will not contribute to those numbers. They do.
The advantages of renting are, for me, these…
- It’s easier to bolt to a newer, better place. If I get bored, I just cancel my contract and leave.
- I don’t have to worry about the major maintenance and repairs for the upkeep.
- I don’t have to be in debt since I only spend what I can make. Not to mention “escaping” Capital Gains Tax.
- I can have more money for better investments (stocks, bonds, treasury bills, businesses and other ideas come to my mind right now)
- Insurance is only for personal items. Cheaper.
If you work out the math, renting comes out cheaper than owning a home by 15% to 25% per year. More if you manage your finances right. Plus the advantage of being paid interest on your money. Yes, my motto since 2001 has been to let banks pay me interest instead of the other way around.
Here are some additional articles to help you decide… Rent or buy.
5 myths about home sweet homeownership
Still not convinced about renting? Go ahead and take the plunge. Don’t say I didn’t warn you. Counter arguments are welcome below. 
Come to think of it, this week might not be so incongruous, after all. More likely there’s a symmetry involved. Again. I’ll have to explain this at a later post but what I heard this morning from Teteth was definitely not so good a news. It seems that our first born son has been up late last night surfing p0rn. Which made her go into a panic fit. Good thing she texted me first before going all ballistic.
What They Said