It's always going to be much easier to rent than to own. While homeowners may think they're enjoying more control over their surroundings, they're actually tied to a specific piece of property - and a specific neighborhood, and a specific set of commitments that goes along with home ownership. Throughout my adult life I've studied both of the options, and I'm convinced that there's simply too many drawbacks to owning a home. Here's a list of the top reasons why it's better to rent.
1. Plumbing problems. Just imagine what happens if your pipes are noisy or leaking, or if the hot water is too hot. If you're renting your house, you simply call the building manager and ask for a repair. But if you own your own home - guess what? You're the building manager. So good luck with those repairs...
2. Flexibility. It's always more difficult to move if you've also got to arrange the sale of your house. You're obviously still required to make your mortgage payments, even if you've already moved on to paying for new lodgings in a different city. And I've seen this happen when a company suddenly decides to move its operations to a different location. If you're renting, you simply give your landlord 30 days notice (and, in a worst-case scenario, pay an early termination fee for your lease). If you're trying to get out of a mortgage, the "early termination" scenario is much more expensive.
3. Unexpected repairs. There's always horror stories about the couple that discovers a dangerous mold in their house - but that's just one example of an unexpected expense that could rear up and make life miserable. Other homeowners have reported problems with termites or other bug infestations. There's fire damage, water damage, and in some cities, even earthquake damage. Granted your insurance should cover the cost of these repairs - but you're still going to have to be the one who calls in the professionals and oversees the work!
4. Homeownership is expensive. Here's something I always think about when I consider the advantages of renting a home. Finance author Venita Van Caspel once compared the long-term return that's realized from owning a home versus renting a home. First she'd calculated the appreciation in a home's value and then subtracted the amount invested to purchase it, along with all the other costs associated with owning a home. There's maintenance fees, homeowner's insurance, and of course, the big initial down payments and higher monthly fees.
Then she calculated the return you'd enjoy if you took that same money, and just invested it in a safe mutual fund (or even a bond fund with a guaranteed return). Her conclusion? The two investments performed nearly identically. You didn't enjoy any larger financial gain just by owning a home instead of just renting a home and investing your leftover money wisely. So if you're thinking of buying a home as an investment, just remember that you have other equally attractive options!