Believe it or not, sometimes renting is the solution


I have heard you talk multiple times on the (radio), so I decided to check out your website today – specifically your blog. You have some really good posts that definitely help us that are in somewhat of a bind (mostly due to our bad financial habits). I have a question for you, so hopefully you can help me out. I’m married and my lovely wife stays at home with our two kids (a 2-year-old and a 4-year-old). I currently commute to my job (63.5 miles – ONE WAY) and have a 30-year mortgage on my house. We would like to sell the house and move closer to my work, but our credit has taken hits over the past couple of years (late payments due to medical bills; neglecting financial responsibility; etc.), but last year we did sign up for a debt management program through (a consolidation service). The program consolidated all of our credit cards into a single payment (except the secure VISA credit card through our bank), which I feel has helped us quite a bit. The most recent problem has been some additional unexpected auto repair and medical expenses then throw Christmas into that and we’ve fallen behind yet again. I’m pretty sure my credit is so poor that we will be unable to even get pre-approved for another home loan/mortgage, but we would potentially save between $200-$300 a month on gas expenses (not including extra car maintenance we’d save on) so I’m really hoping to move sooner than later. Any advice would be greatly appreciated – even if you do a blog post about a similar situation.

Thanks for your time!

First, excellent decision to move. If your job is solid, then you should live much closer to work. You may not like the next part of my answer, but I think it could save your financial life. Rent. You should move, and then either rent a house or apartment. In your email to me, you said that you are afraid you wouldn’t qualify for a mortgage right now. People love to try to trick a bank into giving them a mortgage. That always makes me think about a random person trying to convince an expert juggler to let the random person juggle knives. If you’re able to convince the juggler to let you juggle knives, who wins? Not you. High five! Sorry, you can’t. You cutoff your hand. When you try to trick someone into do something that you shouldn’t “be able” to do, you generally end up hurting yourself.

This that means that you shouldn’t force the issue and try to get a mortgage. You should rent for a couple of years and clean up the rest of the financial mistakes. Who is in a better position?

1. A person with a mortgage with $10k in credit card debt and $0 equity in their home.

2. A person who rents with no debt.

The answer is always #2. Always. I honestly think, given the information you’ve given me, you should sell your house, move closer, save money on gas, and rent.

2 thoughts on “Believe it or not, sometimes renting is the solution

  1. Their is nothing wrong with renting, especially emotionally. I’m similar to your fan above… married, mom stays at home, solid six-figure job, long commute (only a few days a week thankfully) and two years ago we moved from our home we owned to a home we rented. The driving factor was to get out of the city, into the country, where our boys could run (as boys should do). We didn’t have the funds to own a home AND buy another. So we rented our home and became renters ourselves in the new home. And our quality of life went up. See, it was important to us to be in the country where our boys could be boys. We achieved that in renting. Emotionally, we were on cloud nine. And, we didn’t have the debt of two homes. Pete is right… a renter with no debt is RICHER than an in-debt homeowner in a home where value is decreasing, or increasing at a rate less than inflation (most of the USA). In full disclosure, we later bought that second home so we “felt” more in control. But, to this day… I strongly dislike owning two homes, even if we have a great renter in our other home. I’ve never met a rich landlord… ever. Good question. Great answer, Pete.

  2. I sincerely believe that renting is what has saved us – not just financially – but emotionally, too!

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