Why Homeownership Is Not For Everyone

If you live in the US, you’ve probably heard your parents or older coworkers tell you to buy real estate as an investment.

Their logic is simple: no matter who you are, you need a place to live. Housing is always in demand. If you rent, your money just disappears into the void. You never recoup it because none of what you paid for belongs to you.

And sure, that is true on the surface. But that still doesn’t mean renting is automatically “throwing money down the drain.”

Where Renting Can Be Beneficial

The biggest benefit of not owning a house is flexibility. When you rent, the main thing tying you down is the lease. That means you can make quicker decisions based on your finances, your job, or the market.

When you own a house, you have obligations everywhere. Mortgage. Property tax. HOA or condo fees. Insurance. Maintenance. And if you rent the place out, now you also have to worry about keeping the property in shape and making sure the management company is actually doing its job. We’ve all dealt with lazy management companies, right?

Owning a house doesn’t just consume money. It consumes time, energy, and freedom too.

That part hardly ever gets discussed, because people focus on the fact that at the end, you get some cash back with equity. That makes all the inconvenience feel justified.

But if you look at it from a net gain perspective, renting does not look nearly as bad. What if all you had to worry about was monthly rent? Yes, rent can go up, but so can property taxes, insurance, and HOA fees. At least when you rent, you usually have a chance to adjust. You can move somewhere cheaper if that is what fits your budget at the time.

A lease usually renews every year, which gives you a natural point to reevaluate. But if you own and decide you want out, now you have to wait for a buyer or renter. You are not really in control of the timing, even if the property is technically yours.

And if moving somewhere cheaper lets you save even a little more, that money can go into your retirement accounts or brokerage account and compound over time.

My Condo Changed My View on Ownership

I own a condo in the suburbs, about an hour away from the city. I didn’t buy it as an investment but for convenience. But I am definitely paying for it now, especially with an HOA fee that has crawled up to almost $700 a month.

I finally decided to sell it. My partner was reluctant to sell because I got a very low mortgage rate, around 2.3%, but the HOA kept rising and basically ate away at the benefit of that low rate.

When I look at similar condos being rented out around me, a lot of them are listed for around $2,600. That roughly covers the mortgage and HOA with very little padding. Honestly, I think a lot of these owners are in the same boat, just trying to make someone else pay for their house and the soaring HOA.

That is why I decided I would rather sell and move into a studio or one-bedroom rental until we figure out our move to Japan.

You Don’t Control as Much as You Think

You might think buying a condo was a stupid decision on my part, but even townhouses around me come with not-so-trivial HOA fees. And the real problem is that it is hard to predict how much those fees will rise. When I first bought this place, my HOA was around $300. At the time, it was cheaper than a lot of other places I looked at. Now it has more than doubled in a decade, and it still keeps going up.

That is what I mean when I say house ownership doesn’t give you full control. The mortgage might stay fixed, but property tax, insurance, and HOA fees are all outside your control. Those can keep rising no matter what you do.

Don’t get me wrong. I think owning a home can be great if you enjoy DIY projects and get a sense of fulfillment from having your own place. Buy a house or two. Flip them if that is your thing. It just was not for me, and I am sure I am not the only one.

Still, I wanted to become a homeowner before deciding it was not for me. For that reason alone, I think it was worth it.