Now before you start giving me “Financial Planner” speak I want you to listen to what I have to say.
For people with particular skills who will likely have jobs in different areas of the country or the world over her professional life, renting makes sense.
Given the nature of “work” now, maybe it is time to re-think the idea of home ownership. It is well documented that “professional occupations” change job every seven year or less and that next job is likely to be in a different part of the country or world.
For that reason, maybe home ownership is not desirable. It makes each move a major event instead of just a job change.
Default on a mortgage wrecks your credit standing
Given the economic instability of our times, having one job throughout your work life is nearly impossible. When a company closes out a major factory thousands are suddenly unemployed in that geographic area. That fact depresses home prices alone. Since statistics show that most people are only one paycheck away from insolvency, losing a job often results in mortgage foreclosures where you lose any assets you might have in the property and wreck your credit rating for borrowing for other needed things.
For people over 60 renting makes the most sense
This is the group where renting instead of owning makes the most sense for several reasons.
- Since you are no longer tied to a geographical area renting gives you a level of freedom you have never had before.
- You can try different areas of the country without much economic hardship. No seven-percent realtor fees to pay at every move.
- Being free from the daily maintenance of home ownership allows you to spend your time on more enjoyable pursuits.
- Not owning a home puts almost all your assets in the liquid variety. You can spend it all or more easily distribute it to your heirs.
There are distinct advantage to renting
As shown in the graphic below there are some pretty serious advantages of renting instead of being tied down to a mortgage.
Serendipity is something good that happens as a result of something else. One of those results related to this topic is that you just might find that you can live in a much smaller residence than you imagine. Since rent and home ownership costs are determined by square footage, you can save a considerable amount of your assets that can be used for other things. Living with only the space you “need” can also simplify your life and maybe even give you peace.
Living Simply is practiced much more in the rest of the world than it is in America. Maybe that is the reason that so many more Americans are stressed out and make poor decisions.