Buying Your First Home: Is Hatred for Renting a Good Reason to Buy?

Anyone who knows me, or even stalks me on twitter, knows that I hate renting. It was just last month that I got a message from my landlord. She called one evening when I was watching a movie and I didn’t bother to answer. I knew she would leave a message if it were important. As it turns out, “important” is a relative term for her.

She was calling to let me know that one of the three tenants had been making a mess with our garbage cans. Not only was there loose trash in them that the garbage men (yes, they are men) would not take, but it became the new homes of hundreds of flies. While I wasn’t a fan, I knew it wasn’t my fault. Anyways, she called to tell us her new plan to change the cleanliness of the garbage cans. She decided that I was going to have to clean out a garbage can that would from there on out become “my” garbage can.

To make a long story short, I called and let her know that I wouldn’t be doing this and that she would have to clean them out first is she wanted us to be assigned to a garbage can. She agreed, but the annoyance of renting continues to nag at me through these renting moments.

As many of you know, my wife and I planning to buy our first home in about two years. We are already saving up a down payment and figuring out how much of a house we can afford. You know, all the things that young adults SHOULD do when buying their first home. Who wouldn’t want to be prepared? Yet, as I make the preparations and plans, I can’t help but wonder if my hatred for renting is causing me to jump into home ownership for all the wrong reasons. That led me to question what the good reasons are for buying a home and what the bad ones are. If you are looking to buy a home, or have just recently purchased your first home, you may want to think whether it is/was for the right reasons.

Reasons to buy a home

Bad Reasons to Buy a Home

Being the youngest of three boys, I have always wanted to grow up faster than anyone else my age. I am more responsible than anyone else I know and I plan like no one else. In many ways, it’s a good thing. It has helped me be successful in all of my employment opportunities. While my peers were working as student works, I was a full-time staff member. I not only got benefits, including vacation and holidays, but also free tuition. Simple put, my motivation has been a good thing in so many ways.

Many people take the same drive to be a grown up and carry it over to buying a home. In other words, many people buy their first home because it seems like the “grown-up thing to do.” While I am a fan of buying a home, I do not endorse buying a home for the wrong reason. This is one of those bad reasons. Buying a home to feel grown up will often mean that you are buying before you are ready (both financially and emotionally). You need to consider the financial and lifestyle changes of buying a home.

Here are some other bad reasons to buy your first home:

  • To have more space or a certain feature of what is often associated with buying (i.e. a backyard, garage, etc.)
  • You assume it’s better financially
  • You’ve been told the market is a buyer’s market
  • You don’t want to miss out on low interest rates

There are many other reasons not to buy a home. The easiest indicator of whether you are making a mistake seems to be making too a decision without thinking it through. This should come to us as no surprise. The aspect of considering all of your options, which is great advice for your personal finances in general, is going to apply to buying your first home. In other words, the message here is this: don’t jump into buying a home without knowing the reasons why you are buying.

Is Hatred for Renting a Bad Reason to Buy a Home?

The implications of thinking through why you are buying a house would suggest that buying a home for the sole purpose of not having to deal with a landlord is indeed a bad decision. You shouldn’t run to buy a home because you can’t stand dealing with a landlord. First, you need to consider renting somewhere else. There are lots of great landlords out there and if you are considering buying a home for the sole purpose of escaping that landlord, you’re confused. There will be more issues that you, as a homeowner, will have to deal with.

buying your first home

Reasons We Will Buy a Home

While my wife and I hate renting, this isn’t the only reason why we are buying a home. Here are some of the other reasons we want to buy a home, that I think make for good reasons to buy. You’ll have the option in the comment section below to tell me whether we are buying for the right reason or not.

  1. Building Up Equity - Equity in a home is a great way to build wealth. Instead of paying a monthly fee for renting, by buying a home we would be putting money into our own pocket. Equity isn’t just about net worth either. By buying this asset, we are increasing our wealth AND lowering our future expenses (once the mortgage is paid off). Who wants to pay rent forever anyway? The financial benefits are certainly the biggest reason for us to buy a home.
  2. Diversification - Buying a home allows us to invest in something different than our retirement accounts. When most people talk about diversification and how to do it, they don’t talk about real estate or buying a home. Diversifying your investments/assets is a great way to hedge against downward spirals in the market. Granted, it will initially put a lot of our money in a home, but if the stock market crashes, at least we will have value in our home.
  3. Responsibility - Like I already mentioned, I enjoy being responsible for things. I want to manage and take care of my own home. There’s something about successfully managing an asset that just excites me. On top of that, I know that since I am the one responsible, I don’t have to wait for my landlord to fix something or to go cheap on something because I will be the “landlord.” I will be the one who makes all the decisions (or Mrs. 20′s will be, at least).

Buying a home is something that needs to be done for the right reason. Jumping the gun, so to speak, is a great way to put yourself at increased risk of causing a financial disaster. If you are thinking about buying a home, make sure to take the time to think about why you want to buy. Ask yourselves whether you can afford it AND whether you are ready for that type of commitment.

Readers, what do you think are good reasons to buy a home? Am I buying a home for the right reasons?

18 Responses to Buying Your First Home: Is Hatred for Renting a Good Reason to Buy?

  1. A good reason for me is if you are spending more in renting then you would if you purchased a home. Also if you know you want to live in that particular area long term. No need to buy if you plan on moving again in my opinion. I actually don’t mind renting at the moment. We save a lot that we can use for down payment and it allows us to make sure we like that area before purchasing. I don’t really count on equity. Once my house is paid off I wont really care if its worth 100k more then I paid for it. if I like my home and the area I will be there long time and I don’t plan on taking a loan against the home.

  2. The hatred of renting is the absolute worse reason to buy a home. Why? Because that means you’re basing a hundred thousand dollar decision based on emotion rather than numbers. Home ownership is a lifestyle decision, but it should be about the best mathematical equation rather than how a person feels about it. If it makes sense to rent .. rent!

  3. I think hatred of renting, while I certainly understand it, is the worst reason to buy a home. It puts emotion into the equation and really should be a logical decision. Our reasons to buy were along the lines you mentioned and generally should be a grid to measure it against.

  4. Christian L. says:

    Corey,
    Hatred of renting could lead any home shopper to make a misguided decision. The first you need to do if you want to buy a home is guarantee you can afford it. Otherwise, you could be walking into financial suicide.

    I’ve heard lots of people tell me they bought a home because their landlord was awful or they were tired of paying for something they didn’t own. Fair enough, but you need to be absolutely sure you can still live comfortably when you buy a home.

    -Christian L. @ Smart Military Money

  5. I bought my house because it was cheaper to buy than rent and it made good financial sense. Maintaining it isn’t always fun but it is nice to be able to look at something I fixed and know I did it.

    • I made a similar decision as Lance. Our house does have a basement studio that we will rent out. Factoring this in, we are paying $300+ less per month on our mortgage than we would if we were renting. Plus the house we bought looked outdated and wasn’t staged for sale whatsoever. The fixes we are doing are mainly DIY and should immediately add equity into the house.

      I do think that factoring in interest rates into your purchase decision is a GOOD thing. It kind of came off in this post that low interest rates are a bad reason to buy now. If I can lock in at a 3.5% interest rate for 30 years, essentially knowing that long-term I am definitely beating inflation, why wouldn’t I? If it wasn’t for the Federal Reserves manipulation of the market interest rates would be double that, at least.

      I think everything has to be taken into consideration for the current economic climate, your personal finances, interest rates and how they compare to future inflation rates, potential for increased equity, etc.

  6. I guess it’s all relative Corey. I absolutely hate renting my home out to people. You’ve received calls from your landlord that I would never make, but I’ve taken the same calls from my tenants. They literally complain about bugs in the trees outdoors. This is a house 40 minutes from the city in a sparsely populated area. Seriously, bugs in the trees…?

    I would love to have a renter like you that wasn’t the number two most contacted person in my address book according to Google.

  7. Taost says:

    Most people fail to realize that if you have a mortgage, you are a renter… don’t believe me? Miss a few mortgage payments and you will find out who the “real owner” is.

    Don’t get me wrong… home ownership is awesome in the right circumstances. Just try to make sure if you are purchasing with a mortgage that you are staying put for 15 to 20 years and/or that there is plenty of consistent real estate liquidity in your area.

  8. You can make a case that renting is better than buying, and you can also make a case that buying is better than renting. The tipping point for me is that nebulous thing called quality of life.

    But even that’s not all that simple. Not having to field landlord calls is a quality of life improvement, no question about it. However, having to fix everything going wrong (instead of just picking up the phone and letting the landlord take care of it) is not a quality of life improvement.

    To my wife and I, however, the clincher was customizing. We own, and we can paint any room any color. We’ve added a deck and air conditioner and we upgraded the kitchen to our taste. (Note how I include myself in that “our.”) You can’t do that if you rent. And if owning costs more, that’s a price we’re willing to pay.

    One thing to keep in mind: the country is facing an increased risk of inflation. In inflation, owning becomes FAR superior to renting.

    But… Corey, hold on with that “in two years’ time” thing. House prices are climbing now and in two years’ time they will no longer be all that reasonable any more. My advice would be to stick it out for another few years and wait for the next recession. Then you will get a better deal, and THAT represents a boost to your net worth that stays with you for the rest of your life. Just ask anyone who bought a home in 2006 or 2007 about this.

    And in case you’re thinking the next recession won’t come along for the next 100 years, think again. We always have recessions every 7-10 years and the last bottom already is almost 4 years behind us. Add 2 years and you can see you’ll not be too far from the next bottom. Much better to wait another couple of years or so and score $30,000 in a lower house price…

  9. Sarah says:

    Hatred of renting (by itself) isn’t a good reason to buy a home… but it can definitely give you that extra nudge when everything else falls into place financially. Where we live, buying is almost always superior to renting primarily because:

    a) home prices have remained stable through the recession
    b) you can buy an 1,800 SF home in the suburbs for less than $100,000
    c) homeowners can write off real estate taxes (which make up about 40% of your monthly payment)
    d) mortgage payments are fixed, while rental rates continue to rise with inflation
    e) eventually you will have no monthly mortgage payment, or equity to put towards a nicer home; whereas you’ll continue to pay rent forever

    The only hurdles are ensuring you have an adequate down payment, good credit history, and that you don’t anticipate moving in the next few years.

  10. I think your reasoning is spot on. We bought our first home as soon as humanly possible because we felt we were simply wasting money on rent AND I wanted complete control over my environment, lol. It worked out really well since our 15 year mortgage monthly amount was actually $10 less than our rent. So we pretty much only paid $2300 a year in property taxes for the ability to build equity and not listen to people stomp around above us…

  11. If the hate for renting makes you buy a house this month, then yes, it’s the wrong call. Otherwise, don’t you worry your pretty little head. :)

  12. slinky says:

    We just bought a house. Primary motivation: put a blacksmith shop in the backyard. Try to do that in a rental! Also, we got a good deal with the house appraising for much more than we paid.

  13. Hi Corey,
    This is a good article. I really like the points you made about the bad reasons to buy a home. I have only rented once in my life and it was for only 3 months. My town home sold quicker than expected so we needed a place to stay while my wife and I looked for a house. I buy mainly for the reasons you listed, but the features are a plus. I also like the tax write-off :). Since this article has been posted, have you found your home?

  14. Hey! I think these are good reasons. And it is a good investment. But a house is a LOT more work than renting….if you know you found the area you are going to stay and want to raise your kids there then I think buying is a smart move.

  15. Jason says:

    Buying a home is both exciting and scary. So much debt, but the freedom to live in a house you “own” is a great feeling. You don’t actually own it until you pay off the mortgage, but it is better than renting in my opinion. BTW…buy a home you can actually afford and put down at least 20% if not more. Once paid off you only have to worry about taxes and insurance for the rest of your life. I would suggest everyone put down as much of a down payment as they can on a property. Then pay off that mortgage as quickly as possible and take full ownership. Keeping a mortgage for 30+ years in order to reap the benefits of taxes is a fools game. Run the numbers…PAY OFF YOUR MORTGAGE. The goal of everyone (it really should be taught at elementary school and on) should be to become debt free as quickly as possible and then go out and take risks. Once 100% debt free on the essentials (car and house) then take risks on additional investments. Debt = financial slavery so get out of debt quickly…pay off the house. You’ll be so glad you did. Stress free and uncomplicated…that is the way to go through life!

  16. Jason says:

    Buying a home is both exciting and scary. So much debt, but the freedom to live in a house you “own” is a great feeling. You don’t actually own it until you pay off the mortgage, but it is better than renting in my opinion. BTW…buy a home you can actually afford and put down at least 20% if not more. Once paid off you only have to worry about taxes and insurance for the rest of your life. I would suggest everyone put down as much of a down payment as they can on a property. Then pay off that mortgage as quickly as possible and take full ownership. Keeping a mortgage for 30+ years in order to reap the benefits of taxes is a fools game. Run the numbers…PAY OFF YOUR MORTGAGE. The goal of everyone (it really should be taught at elementary school and on) should be to become debt free as quickly as possible and then go out and take risks. Once 100% debt free on the essentials (car and house) then take risks on additional investments. Debt = financial slavery so get out of debt quickly…pay off the house. You’ll be so glad you did. Stress free and uncomplicated…that is the way to go through life!
    http://es4mi.blogspot.com/

  17. audrey says:

    is “wasted” to be a year in rent, having to buy it all in, just to prove how you are, find your own spaces, etc., and then having to move house after a year and having to re-move everything.

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