You Don't Have To Buy A Home Just Because You Want To Be Rich

There is just this perception that only the losers are renters, and buying a home is the only way to get rich.  I don't know how many times I was told by my friends, and relatives to stop renting, because I will never be able to build wealth if I don't own my own home.  Yeah? Owning my own home sounds easy to say, but  it's not so easy to do. Besides, I refuse to believe in such propaganda.

Yes, I am a renter, but it doesn't mean I am not building wealth.  I have been trying to spend less than what I earn from my paycheck, and I have been investing my savings in stocks.  Sure, I pay rent to my landlord and it's money out in the cold.  But so are my homeowner friends and relatives who are paying HOA fees, repairs & maintenance, mortgage interests to the banks (however low the interest rate is, it's never 0%)  and the property taxes to the government (yeah yeah, everybody says mortgage interest and property taxes are tax deductible but my rent isn't, which is also not totally correct and I will talk about this in my next post).

What I have as a renter that my homeowner friends and relatives don't have are:

1. I have more time to work for more money, like getting a second job or doing paid overtime because I don't have to take time off to stay home to wait for a plumber, or an electrician, or whoever contractor who needs to show up to fix this and fix that.  When I have anything not working in my rental, I will just call the landlord and let him deal with it. I also can choose to live a lot closer to work to reduce my commute time which I won't be so flexible in doing if only I own a home somewhere.


2. I have complete flexibility to move to any town, city or state that offers me a higher pay.  I don't have to spend time selling my home and I certainly don't have to be stuck in a specific job because of the locale of my home.


3. I have more flexibility to reduce my housing cost because I can always move to a place or a situation that charges less rent.  For a couple years, I was renting a tiny little guest cottage inside a very nice house in the same nice neighborhood as my friends, for US$550 a month, which actually was less than what my homeowner friends and relatives were paying for property taxes. Just because market rent in my town is $1,800 for a one-bedroom apartment doesn't mean I must spend this much. There are always options and landlords who are willing to rent a room, a cottage, or even an apartment to you at a good price, for whatever reasons they may have in mind.  In my case, the old lady who rented the guest cottage to me just wanted a housemate for companionship, not really for the sake of making money. She wanted a clean, friendly, responsible and professional housemate, and there I was.  But if I was owning a home, I would be pretty much tied to my monthly mortgage payment and my property tax obligation, unless I go through the hassle to refinance to a lower payment.  Sure if I own my home, I can always sell it, but the point is,  it's a lot more work and it takes a longer time to cut cost should my situation need me to cut housing cost.


4. I have more liquid savings than my homeowner friends and relatives because their savings are all used as down payments for their homes. They can refinance to get the money out but again, it will take time. Meanwhile, I can liquidate my holdings in my stocks anytime I want whenever I see there are better investment opportunities elsewhere. This is the opportunity costs that my homeowner friends and relatives never thought of.

So, in my opinion, there is nothing wrong in renting. I certainly will buy a home if I can afford it without sacrificing other more favorable investment opportunities.  Wealth can't be built by just being a renter or a homeowner. Wealth building is about how we can take advantage of the best investment opportunities available for what we can afford to invest, given our own very unique circumstances.