We’re all familiar with the classic American Dream spiel: homeownership, a white picket fence, two cars in the garage, 2.5 kids, and a chicken in every pot. Yeah, right. It’s time to scratch that first part, anyway. Here at the end of 2023, many of us might as well aspire to owning a unicorn. Between rising interest rates and inflated real estate prices, buying a house is now 52 percent more expensive than renting.
But lest you think we’re launching into a bitter diatribe, consider this: Jonas Bordo, CEO and cofounder of Dwellsy, says that renting makes way more sense than homeownership for many Americans—and for reasons other than money.
“Most advanced countries have strong renter cultures where it’s clear and accepted that renting is better for most people,” says Bordo. “In the U.S., you’ll hear people sheepishly say, ‘I’m renting only until I can save for a down payment.’ I hate that renting is seen as a less-desirable option, when in fact, it can save many people money, time, and lots of stress.”
Of course, there are plenty of reasons why homeownership might be the best choice for some people, and if you’re one of them, Bordo isn’t trying to convince you that you’re wrong. But if you’re on the fence about owning and maintaining your own picket fence (and everything else that goes with it), here are six reasons to embrace renting:
Renting helps you save money—especially right now. It’s right there in black and white in the Wall Street Journal headline: “There’s Never Been a Worse Time to Buy Instead of Rent.” That article is where the “52 percent more expensive” statistic cited earlier came from. It also notes: “A person taking out a 30-year mortgage today on a $430,000 home with a 10 percent down payment would fork out around $3,200 in monthly repayments, 60 percent more than if they had bought the same house three years ago.” Yikes!
“Brand-new homebuyers are saddled with a nearly 8 percent interest rate,” says Bordo. “And according to one recent estimate, you’d need to earn tens of thousands of dollars more than the average American income to afford the average American house.
“Renting, on the other hand, is looking like a great deal by comparison,” he adds. “Throughout 2023, rent prices have been unusually flat across all property types and bedroom counts.”
Even if your friend’s mortgage payment is lower than your rent (which may or may not be true, depending on what kind of property you’re renting and the market you’re in), the cost of owning and maintaining a home tends to cut deeper into your wallet. Homeowners insurance, property taxes, repairs, lawn maintenance, utilities, and more can add up quickly.
“Most of us have heard that owning a home is good for building wealth,” adds Bordo. “And yes, some people do sell their homes for more money than they paid. But in many cases, that profit isn’t enough to make up for—much less exceed—the amount the homeowner paid for property taxes, maintenance, improvements, insurance, etc.”
Renting saves you time. If you’ve never owned a home, you might not realize just how big of a time-suck it can be. In addition to keeping the interior (relatively) clean, you are responsible for changing the air filters, unclogging the drains, mowing the lawn, pulling the weeds, cleaning out the gutters…and the list goes on. For every new season, there’s a new to-do list of tasks.
“Of course, homeowners can choose to outsource these jobs—but if they do, that’s one more expense,” points out Bordo. “And anyway, wouldn’t you rather spend your free time focusing on your hobbies, hanging out with friends, or just relaxing than raking leaves or dealing with the rodent infestation in your attic?”
Renting doesn’t force you to become an amateur handyman or handywoman. Bordo has touched on this point already, but it bears repeating: Hiring someone to fix your leaky faucet or install your new ceiling fan costs money. Consequently, many homeowners find themselves watching YouTube tutorials so they can complete these tasks themselves…and then watching more tutorials to fix the mistakes they made the first time around.
“When you’re a renter and you need something repaired or installed, the steps are simple,” says Bordo. “One: Pick up the phone. Two: Call your landlord. Voilà!”
Renting gives you flexibility. Imagine you get your dream job offer, but it’s in another city or state. If you’re a homeowner, there’s a long, complicated slog ahead of you. Selling your house might involve expensive repairs and dozens of inconvenient showings. Finding a buyer might take months, and there’s no guarantee you’ll come out on top financially.
“As a renter, you won’t have to deal with any of that,” says Bordo. “You can usually tell your landlord you’re leaving and work things out by paying some extra rent, even if your lease isn’t ending soon. If it is, all the better—no extra rent necessary.”
Renting can cut down on your stress. Imagine this: It’s a dark, stormy night. The wind is howling, thunder is booming, and—great!—it’s just started to hail. If you’re a homeowner, your thoughts are rapidly doom-spiraling: What if that tree in the front yard comes down? How much damage is happening to the roof? Will the basement flood again? Can I afford all these repairs?
“If you’re a renter, such worries won’t feel as dire because you know that any damage and repairs will be your landlord’s responsibility,” says Bordo. “Your stress levels are less likely to go through roof when it isn’t your roof.”
Renting can offer you a greater variety of places to live. In many areas, renters have more choices in terms of geography and aesthetics. For instance, your rent budget might get you a quirky little space in a historic downtown building, a trendy new apartment in a complex with a pool and a clubhouse, or even a bedroom in a house-share. Homeowners often don’t see this kind of variety within their price range.
“Recently there’s been a material uptick in the delivery of new rentals, especially apartments,” says Bordo, “so your choices are expanding even further!”
“Having your name on a property deed isn’t an automatic ticket to happiness,” concludes Bordo. “For most people I know, the American Dream consists of living in a place you love, saving as much money as you can, and having the time and energy to do what you like. Renting is often the best way to achieve those things. So instead of telling people, ‘I’m just renting for now,’ start proudly announcing, ‘I’m renting so I can live my best life! Jealous much?’”
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About Jonas Bordo:
Jonas Bordo is the coauthor, along with Hannah Hildebolt, of the book Everything You Need to Know About Renting But Didn’t Know to Ask: All the Insider Dirt to Help You Get the Best Deal and Avoid Disaster. He is the CEO and cofounder of Dwellsy, the free residential rental marketplace that makes it easy to find hard-to-find rentals. Prior to cofounding Dwellsy, Jonas was a senior executive at several leading real estate firms including Essex Property Trust and BentallGreenOak, and was with the Boston Consulting Group after graduating with his MBA from the University of Chicago Booth School of Business.
About the Book:
Everything You Need to Know About Renting But Didn’t Know to Ask: All the Insider Dirt to Help You Get the Best Deal and Avoid Disaster (Matt Holt, August 2023, ISBN: 978-1-6377439-2-8, $21.95) is available from major online booksellers.
About Dwellsy:
Dwellsy is the renter’s marketplace: a comprehensive residential home rentals marketplace based on the radical concept that true, organic search in a free ecosystem creates more value than the pay-to-play model embraced by all of the current rental listing services. Dwellsy has more than 14 million residential rental listings—more than any legacy classifieds site—as well as the most diverse set of listings, including single family rentals, condos, and apartments. Dwellsy’s entirely different approach to residential rental listings focuses on presenting houses and apartments based on features renters need and want, not based on how much landlords pay to show their listings. Dwellsy investors include Frontier Ventures, Ulu Ventures, Blackhorn Ventures, Heroic Ventures, and the University of Chicago. For more information, please visit our newsroom or find your next home at Dwellsy.com.
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