The great debate: rent or buy?
A friend just announced that she needs to find a place to rent in metro Honolulu in the $900 per month range. While she doesn’t need anything fancy, just someplace clean and quiet, I wondered out loud if it wasn’t just time to buy. Prices are fairly stable and interest rates are low; it’s better to buy…isn’t it?
For the long term, it’s probably a good idea to buy if you can, but, because the cost of living in Hawaii is so high, Honolulu comes up in national studies as a place that may be less expensive to rent in. That said, here are some other reasons it may be better to rent.
Flexibility seems to be a big factor for people. If they change jobs or can’t stand their neighbors or roommates, it’s easier and faster to get out of your lease than put your home on the marketfor sale—not to mention, your money is tied up in the home until you sell it. I once lived in an apartment with a roommate who didn't seem to understand how bacteria grows. After six months, I’d had enough, but instead of making us both break the lease, I just found someone to take my place with two weeks’ notice.
Another big factor in renting is avoiding the hidden costs of home ownership. You can budget for your monthly mortgage, but many people forget to consider insurance, repairs, utilities, appliances and maintenance. Without those hidden costs, depending on where you live, you can actually get more home for your money if you rent.
The downside, of course, is that, even if you are a long-term renter, your landlord may suddenly decide they need to sell the place or have their relatives move in. You’re left scrambling for a new place to live, which adds unexpected chaos to your life.
Ultimately, you have to decide what’s best for you, your budget and your lifestyle, regardless of what others recommend.
In the meantime, if you know anyone who wants to rent out an apartment in town…