Confessions of a CFP: Homeownership is not for everyone

One of the biggest purchases that people will make in their lives is the purchase of a home.  From the time we are young we are taught to save money and purchase a home because it’s a good investment.  As a financial planner I have to admit that this is not always true.

Buying a home creates an expensive debt.  Hopefully it also creates a more valuable asset, but once again this is not always true.  The decision to buy a home is a personal choice and the reasons to do so – or not do so – depend on your personal goals, your budget and your personal financial situation.

Some people think that paying rent is a waste of money but I tend to disagree. There are several benefits that come with renting an apartment versus buying a home:


The advantages of renting an apartment

Carefree living. When you rent an apartment you don’t have to worry about, well anything.  One of the main advantages of renting an apartment is that you have no responsibility to maintain the premises.  If your drain gets clogged all you have to do is call your superintendant and they will send a plumber.  Renting an apartment is hassle free.

It’s easy to budget.  Paying rent is just one bill a month that you have to budget into your expenses.  I absolutely love this about renting –it’s simple and easy and that’s just the way I like to set a budget.  Whether it’s for myself or for my clients, an easy budget is one with the fewest expenses.  When you have too many expenses each month it’s easier to forget about the due dates and you can miss payments  – this doesn’t happen when you rent an apartment.

No long term commitment.  If you don’t like to plan for the future then renting an apartment is the best choice for you.  I love that fact that I can pack up my things and move away any time I want.  Committing to a five year mortgage term is not for me.  I love the flexibility and freedom that comes with renting an apartment.


The disadvantages of owning a home

The cost of maintenance.  Owning a home is a lot of work, both inside and outside the house.  I don’t know about you but dusting, vacuuming, shovelling snow and cutting grass is just not my thing, in my opinion this is a major disadvantage of owning a home.

All of the other expenses.  The down payment for your mortgage is only the first expense that comes with owning a home.  Afterwards there are several additional ongoing costs involved in homeownership such as taxes, utilities and the cost of furnishing a home.

What do you love about renting or owning? Tell us on Twitter @ TahnyaKristina


Photo by images of money

T, Kristina

Kristina is a Financial Services Professional with over 12 years of experience working in the Banking industry. She helps people invest their money wisely, plan for their retirement, pay down their debts, and enjoy their financial lives. You can see what Kristina is up to on her personal blog or you can follow her on Twitter @TKBlogs.