I'm Bringing Sexy Back...

I'm Bringing Sexy Back...

Lady GaGa, Tim Tebow and Steve Harvey. This might, possibly, be the first time these three names have been mentioned in the same sentence. After all, with the exception of being major celebrities and getting more likes on Instagram than I ever will, these individuals don't have much in common. While their personalities and lifestyles may be as different as their choices in career or clothing, these three stars share one thing in common. They love to rent.

Even after his Miss Universe PR debacle, Steve Harvey is still living the high life. Literally. Harvey lives on the 88th floor of Chicago's Trump Tower and rents the city's most expensive apartment at $22,000 a month.

During his tenure as quarterback of the New York Jets, Tim Tebow elected to save money and rent a modest home in a New Jersey suburb, rather than shell out millions to purchase a New York City apartment.

For the last 6 years, pop music sensation Lady Gaga has been paying $25,000 a month for her Bel Air mansion, which she had the option to buy for $4.5 million.

While I do have a special place in my heart for celebrity gossip and always have the answers to any pop culture question at Trivia Night, I'm not sharing these facts just for fun. I share this information about prominent public figures to demonstrate that renting is absolutely not just for those who can't afford to buy. At the astounding monthly rents these celebrities are paying ($25K!?!), they can all certainly afford to buy a home, but, for one reason or another, they choose not to.

So, as the title of today's blog post suggests, I'm bringing sexy back. To renting that is. A few weeks ago, I debuted the first post in my series on housing and real estate, in which I broke down a few common misconceptions about home ownership. While everyone and their mother will try to tell you that real estate is a great investment and a must for financial success, it is important to remember that a home is, first and foremost, a place to live, not a way to get rich. Today, I'm playing devil's advocate and sharing a few reasons why renting can be a solid financial decision and why you should not feel guilty about doing so. There are absolutely plenty of reasons to buy (Don't worry, home owners, I will share these in an upcoming post), but renting should never be ruled out as a housing option or viewed as a consolation prize for those who can't afford to buy. After all, if Lady GaGa can thrive while renting, so can you. Without further ado, here are four big reasons why renting is fabulous and why you should "own" your decision to rent.

1) Make Your Money Work For You

Unless you've been living under a rock (in which case, you probably don't care about renting or buying), you've heard that a 20% down payment is a good rule of thumb. Let's say you want to purchase an average home in Seattle. Zillow.com will tell you that the average home price in Seattle, today, is $600,000. It doesn't take too much time to figure out that to purchase just the average Seattle home, you need a down payment of ONE HUNDRED AND TWENTY THOUSAND DOLLARS. Even if you don't save the full 20% down payment or you decide to purchase a home outside of the city, you still need a sizable amount of cash saved.

The average mortgage term is 30 years. If you were to invest the $120,000 rather than use it toward a down payment, you could have 2 million dollars at the end of 30 years. And that's being conservative.

My point is, renting allows you to put money to work in so many ways, most significantly investments. Doing so will earn you more money in the long run and it does not require you to tie up this money in a down payment, or even have this money saved at all.

2) Maintain The Lifestyle You Love

After learning that the average home in Seattle will run you $600,000, I'm sure most, if not all, of you immediately thought you would never be able to afford it. You're not alone. For decades, suburban population growth has increased exponentially, while urban population growth has, in many cities, declined. People are buying homes where they can afford which, in many cases, brings them 30+ miles outside of the city to suburban communities with little diversity, amenities, nightlife or convenience. This dramatically changes the lifestyles that people are accustomed to.

An incredible perk of renting is being able to afford to live in a neighborhood and home that you would, likely, never be able to afford to buy. I, for one, absolutely love being able to walk to work every day, have too many Happy Hour options to choose from, live amongst people from all walks of life and be able to spontaneously attend any cultural or social event without having to factor in traffic or travel time. To me, the convenience and cultural richness that come from living in the heart of the city have an intangible value. Life is short and we should all be able to live a life that makes us happy. What makes me happy is not necessarily what will excite you, but, for me, renting allows me to live a life that I would, otherwise, give up as a home owner.

3) D.I.Y.? Umm...Not For Me.

I will be the first to admit it. I am the farthest thing from a handyman. I can't tell the difference between a flat head or a Phillips head screwdriver. In fact, I don't even own a screwdriver. Needless to say, if something broke in my home, it would be a disaster. Unless the problem could be solved with one of the millions of leftover parts from Ikea furniture, I wouldn't know where to start.

As a homeowner, if your roof is leaking, you pay. If your furnace goes out, you pay. Whatever goes wrong, you are responsible. This is both time-consuming and a huge financial burden. As a renter, if something goes wrong, I simply submit a maintenance request and the problem is, usually, solved by the time I get home from work that evening. Zero stress. Zero money. Zero time (on my part). Unless you have intentionally caused the damage, as a renter, you are always off the hook.

4) Freedom and Flexibility.

As young people, the world is our oyster. We don't have much that ties us down. If we want to pick up and move to a new city, as many of my friends have done, we can do so without thinking much of it. If we want to spontaneously switch careers and do something more personally rewarding, but a little less financially lucrative, we can go for it. If we decide to downsize our apartments, are bored with our current neighborhood or want to try out a townhouse instead of a studio, we can easily change our minds and try something new.

As a homeowner, you give up a great deal of the flexibility and freedom that we crave and, in many ways, need as millennials. On average, it takes about 5 years to recoup just the closing costs on a home purchase. In other words, if you don't stay in your home for a minimum of five years, you stand to lose a great deal of money. No longer can you daydream about moving to a new place or taking a new job. When we are just finding our way in the real world, renting gives us the time to decide where we want to live and what we want to do. If you are tied down in a home, it becomes increasingly difficult to make your daydreams a reality.

Ultimately, for many people, buying is just not for them. What scares me, as someone with a passion for personal finance, is that we are so brainwashed into thinking that it is the only option, one that we all need to be working towards. Absolutely not.How many times have you heard someone say that paying rent is just money down the drain? Whenever I hear this, I think it sounds just as crazy as someone saying that buying food is money down the drain. I mean, once you eat food, it's gone, right? Hello! It costs money to live. Renting isn't throwing money away. It's providing you with a roof over your head. Not to mention flexibility, freedom and the ability to live the lifestyle you want, all things that you can't put a price on.

Just as someone's choice to be a career man/woman versus a home maker is personal to them and uniquely theirs, so should be the decision to rent or to buy. There are many amazing reasons to support either choice, but there is not one blanket rule or one right way to live your life. If you love renting, as I do in this phase of my life, don't feel guilty about it. Where you live is undoubtedly the biggest and most personal part of your budget and, in many ways, your life. It's complicated. Our homes, whether we rent or buy, should always be viewed, primarily, as places to live, not as investments. So, whatever you choose to do, you do you, boo boo.

Keeping Up With The Joneses

Keeping Up With The Joneses

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