Here's Why I Had an Easier Time Saving Money as a Renter Than as a Homeowner

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Being a homeowner can be tricky from a financial standpoint.


Key points

  • Many people believe that homeownership lends to better financial stability than renting.
  • In my case, I found it much easier to manage and save my money when I rented a home.

Owning a home has its benefits. First, you have the opportunity to build home equity in a property you might one day own outright. And when you own a home, you don't have to play by a landlord's rules. As someone who's mildly obsessed with dogs and owns a large one now, that's a big deal to me.

Finally, when you own a home, you get the benefit of predictable monthly mortgage payments (assuming you have a fixed-rate loan and not an adjustable-rate mortgage). When you're a tenant, your landlord could jack up the cost of your rent the moment your lease comes up for renewal.

In spite of that, from a financial perspective, I find renting much easier than owning. In fact, when I rented an apartment, I found that saving money was far less difficult than it is now that I own a house. Here's why.

Homeownership costs can evolve

It's true that homeowners can benefit from predictable monthly mortgage payments. Sign a 30-year fixed-rate loan, and that's 360 payments you can anticipate staying the same.

But your mortgage payment is only one expense in the grand scheme of owning a home. You also have property taxes and insurance to contend with, both of which have the potential to rise over time.

My property taxes have risen by roughly $8,000 since buying my home 12 years ago. Now I happen to live in a state with high taxes to begin with. But when I bought my home, I didn't anticipate such drastic increases in such a short time frame.

My insurance costs have also risen since buying my home. And all of those rising costs have impacted my ability to save money.

Home repairs can throw your finances off course

When you rent a home, you're not responsible for upkeep, nor are you responsible for fixing the things that go wrong. When you own your home, you have to pay for every little issue that might arise, whether it's a leaky pipe or an air conditioning system that dies on you in the middle of summer (which actually did happen to me just a few months ago).

It's the unpredictability of home repairs that makes it harder for me to save money as a homeowner. There are months when I'll do a good job of spending minimally on non-essentials, only to have to plunk down $500 for a sudden repair rather than stick that money into my savings account.

Homeownership isn't for everyone

The reason I own a home is simple -- I need a larger space for my family and in my neck of the woods, you really can't rent a home with the same square footage as mine. But if renting a decent-sized house were an option, I'd probably take it.

Yes, I do get some tax benefits for owning a home. And I am building equity in a property that I may be able to one day cash out. But I've also spent a lot of money through the years on peripheral homeownership costs and repairs, and my savings have suffered because of it.

People are often told that homeownership is the ticket to financial stability. But I firmly believe that you can attain financial security as a renter -- and in some cases, have a much easier time doing so than you would as a homeowner.

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