Three months ago, I made the decision to sell my house. Well, I'm happy to say that it finally sold this month and I have voluntarily became a renter again. After nearly 7 years as a homeowner I learned some valuable lessons along the way and while it wasn't always ideal, it was good experience to have. But my priorities in life have changed and owning a home is no longer a priority for me. I would rather be self-employed than an employee, travel and not have the burden of a house to worry about while I pursue both those passions.
Unlike many people, I don't view renting as throwing money away. I'm exchanging money for a roof over my head and that roof happens be a lot less expensive and in a better location for my desired lifestyle. I moved from the suburbs to a downtown urban environment where I feel more at home than I did before as a homeowner. I hadn't even considered buying again because it's not the right time in my life for that and I'm working on growing an accounting business. By downsizing my 3 bedroom, 1,511 sq. ft. house to a 600 sq. ft. studio loft, I'm hoping for a better quality of life. It's all about priorities but I'm really happy to be a renter again for these reasons:
1) Less stress
I tend to stress about things that cost a lot of money, put me in debt, and requires a lot of attention. So basically, owning a home stressed me out a lot. I'm happy that by renting, it will be less stressful. I know what my monthly payments are and there are going to be no surprises. Unless I find out one of my neighbors is an axe murder, then I'll start to worry.
2) Less maintenance
Quite possibly my favorite reason for being a renter again is that there will be less maintenance. This ties in with having less stress but it took a lot of work on the weekends just for the upkeep of my house. There was mowing the lawn, trimming the bushes, spray weed killer and finding and eliminating the threat of various black widows hiding in my garage. Every single week. While I just wanted to relax and spend time doing fun things, I had the responsibility of making my house look good for the neighborhood. It was more square footage than a non-married, childless guy really needed to begin with.
3) Less stuff needed to furnish
Going from a 3 bedroom to a studio loft means I don't need as much stuff. I was able to sell a lot of my things on Craigslist and really reduce the amount of stuff I have to less than a 10 x 10 foot storage unit. The way I feel about lots of stuff is this: it ties me down and I don't want to be tied down. It's also less to clean and less to move come time when I leave my current place. My studio setup is the perfect size for all of the stuff I did keep after my house sold.
4) Easier tax return
Who loves a complicated tax return? Well, I'm kind of weird and I don't mind the challenge since I'm an accountant and it's like a fun puzzle to put together. But I am looking forward to being able to file an easier, less expensive tax return. It appears that for the 2015 tax filing, I will not need to use a Schedule A form with my itemized deductions. No more mortgage interest, property tax, charitable contribution deductions to keep track of. My 2014 tax return was a pain in the ass and I'm looking to make 2015's return a lot easier. Less stuff to keep track of and less paper is always a good thing. It will be easier to predict my tax liability now and I can try and get to my goal of a zero refund.
5) Less expensive
Owning a home can be costly and have unpredictable expenses. Just as I sold my house, my backyard fence was about to crumble over. It was the original 50+ year old fence and was in need of being replaced. I was happy to sell before I had to repair that. Aside from major repairs I will be paying less in utilities and overall less living expenses. The great thing about the loft complex I currently live in, is that they were offering a special of first month's rent FREE. This was a nice surprise to me and allows me to bring the average monthly cost for the first year from $1,050/mo down to $963/mo, a savings of 8%. Compared to my former mortgage amount of $1,030 (Principal, Interest, Taxes, and Insurance) that's a savings of $67/mo for the first year. Also, the utilities will be a lot less. With my property management covering water/sewer/garbage, I'll be saving $120/month compared to what I was paying each month for my house. And since I'm living in a place that's half the size of my house, I'll be paying a lot less in energy bills: about half of the $60/month energy bills I was paying. So altogether, I estimate a savings of over $215 per month for the first year. That's over $2,500 savings for the first year of being a renter!
6) Closer to fun activities
Because I went from the suburbs to an urban environment that means I'm in close proximity to fun activities with people near my age and demographic. The reality is, I don't want to live in the suburbs for a long, long time and would rather be within walking distance to everything I need. I'm within walking distance of great parks, free concerts, farmer's markets, and restaurants. It also help that I'm only a 15 minute Uber ride from the airport so I can easily jet off to my next travel destination.
7) Less driving
If I could, I would get rid of my car and live the car-free lifestyle. But, I still need a car for running some errands plus I visit my folks often and they are a good 45 minutes away from me. The good thing is, my car is paid for so it's not a recurring cost that I'm paying for. I only plan on driving less than 300 miles per month so my gas expense should be a lot lower, plus I like walking when possible. I recently signed up for Metromile per-mile car insurance, so by driving less I will be saving even more money with that expense as well.
8) Less commitment
The "C" word. Many guys are afraid of commitment and I would admit that I'm one of them, but only when it comes to long-term contracts like a mortgage. I'm thrilled to not be bound by such a huge weight on my shoulders anymore. If for some reason I had to pack up and move, I could get out of my lease or sublet my loft if I had to. With a house, it's not so simple to break that commitment between you and your mortgage company and the transaction costs and time involved in selling are not small. Plus after my year lease is over, it goes to a month-to-month lease which is an even better arrangement. I may someday like to live in Puerto Vallarta and it's nice to know I can make that happen without the commitment of owning a home.
9) Debt-free living
I am now officially debt-free! Okay, okay, paying off a mortgage due to a sale is not the same thing as paying off credit card debt or student loans. But in my eyes, I don't really like debt either way it's packaged. My net worth statement isn't going to show any debt going forward and that's a beautiful thing for me to see. It means I'm not at risk of being underwater on my mortgage, I don't have to shop around for the best interest rate, and I don't have another several decades to be slowly chipping away at a mortgage. Less debt equals more freedom and I feel more free than I have in 7 years.
10) Simplified finances
No more tracking the value of my home, the mortgage, prepaid property taxes and the escrow account. I get rid of four accounts that I need to keep track of and simplify my finances. Sure, this is a minor reason but I really enjoy seeing my cash balance increased due to cashing out the equity in my house.
The Bottom Line
The bottom line is I now have an easier way of life as a renter. While I had some great experiences as a homeowner, I feel like it's time to simplify and live in a location that has more to offer, all within walking distance. Being a renter isn't always viewed as a wise choice, but when it comes to living a care-free lifestyle that's one of the best options compared to owning.