You have a stable job and a solid nest egg. Time to buy a home, right?
Although homeownership can offer financial benefits like equity, appreciation and tax deductions, there may still be good reasons to keep renting even when you can afford to buy.
"It's really just not as cut and dried as the famous 'throwing money away on rent,' especially if renting is buying you something you value, such as flexibility or consistency in terms of cost of living," says Charlie Bolognino, a certified financial planner at Side-by-Side Financial Planning LLC in Plymouth, Minnesota.
Here are some reasons renting might make sense for you.
You want flexibility
Buying a home could easily tie you to a place for years, if not decades. You can always sell, of course, but there are associated costs — and you could lose money if you sell too soon or are forced to sell in a down market.
Renting, on the other hand, gives you more freedom to relocate as desired. Sure, you have a lease to consider, but those typically last just 12 months, and you may have the option to sublet if you can find a new tenant. So you can more easily jump at a career opportunity across the country or simply try a different neighborhood.
That level of flexibility can also provide relief if your financial situation changes.
Homeownership is work: Yardwork. Housework. Maintenance work. All of that can be a drain.
"Owning your own property just takes more time," says Kenny Kline, an entrepreneur who lives in Brooklyn. "Dealing with maintenance, the co-op board, the occasional construction project, all takes more time and stress than you realize."
Kline previously owned a home, but went back to renting and has "never looked back," he says. "Now, I live in a well-managed apartment building, and all of that is taken care of for me."
You've got a good thing going
Another great reason to keep renting? You love where you live.
If you have a great house or apartment with a reliable landlord and below-market rent, follow the adage: "If it ain't broke, don't fix it."
"Everyone needs a place to hang their hat, but there's no law that says you need to own that place," Bolognino says. "Find a place that meets your needs, that provides you flexibility or value or piece of mind."
Get extras without the hassle
Renting can give you access to perks like an on-site gym or a rooftop swimming pool. But some buildings go well beyond the basics, says Sophie Morrison, a real estate broker in downtown Chicago.
"We're seeing things like bowling alleys, boxing rings, golf simulators, massage rooms, salt saunas, basketball courts, movie theaters, recording studios and wine cellars," Morrison says. "These luxuries are significantly more common in rental buildings than condos."