Shorter Version

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Renting a property as opposed to buying a house may be more favorable to someone who simply needs a roof over his or her head. However, many could argue that buying a house in your 20s, though some preparation is required, is a more solid step towards wealth. Both scenarios highlight varying levels of financial commitment and responsibility. There is no wonder why buying a house as a young adult versus renting remains an ongoing debate.

Upsides and downsides

Whether it be a condominium, apartment, townhouse, or a single-family home, receiving keys to a place you can call your own is simply gratifying within itself. Renters may boast about their limited to nonexistent responsibility of general maintenance, but homeowners can also flex their bragging rights by stating they are their own landlord.

Yes, once keys are handed over renters and homeowners can come and go as they please, but a renter can change their mind and move in twelve months.

On the other hand, a homeowner would need to consider their loan terms and the current market if they are suddenly overcome with buyer’s remorse. It doesn’t matter if renting or buying a house in your 20s scores more brownie points for you as long as you do not take on something you are not financially and emotionally available to commit to.

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Longer Version

Est. Reading Time: 2 Minutes

Buying a house in your 20s, or at any point in your life, comes down to knowing when you are financially ready for the responsibility of a mortgage payment, and all of the excitement that may follow a closing (repairs, renovations, budgeting, etc.). As a renter, you have the luxury of contacting your landlord or property manager to handle repairs as they arise. Have you ever heard one of those cheesy salespeople say – you break it, you buy it? Well, if something breaks under the watchful eye of a homeowner, they definitely have to fix it since they clearly bought it. In other words, buying a house in your 20s will grant many proud moments, but the expectations can make some people think twice.

Financial responsibility when buying a house in your 20s

Preparing for housing, in general, does not always have to apply to a current situation. There are people who may buy a house with the vision to start a family someday; whereas, a person with singular goals would suggest a rental is perfect for their budget and responsibilities. You may be someone with one obvious housing goal (not to be homeless), and that’s okay as well. Whatever your ideals are behind choosing to rent over buying a house in your 20s and vice versa, your decision should at least allow you to save money.

Even if you are not someone who likes to make plans, you will kick yourself if you spend years and years renting and do not have a decent amount saved to show for it.

Homeowners have more of a safety net in this arena, because if a situation develops where they need to move or are struggling to pay their mortgage, they can hopefully leverage their options to short sale the house to avoid foreclosure, rent it out for additional income, or leverage any equity so they can catch up on bills (if their local market is in better shape). Renters would most likely feel they dodged a bullet knowing they cannot be foreclosed on. However, if a landlord is dealing with foreclosure proceedings, the tenant will eventually be told to vacate the property by the bank or their landlord. The grass is not always greener on the other side, but with all of the nationwide housing programs being offered to first-time homebuyers, it could be in your best interest to explore all of your options.

It’s more than just the money

There is absolutely nothing wrong with you if paying the first and last month’s rent, and security deposit, seems more attractive than a down payment and closing costs. Maybe you are more comfortable with a lease at the moment because you are rebuilding your credit or your schedule is too hectic to pour into a place you cannot enjoy often. On the flip side, you could feel more drawn to buying because you would rather pay your own mortgage or don’t want to ask permission to paint one wall.

The bottom line is, different strokes for different folks. If you are trying to determine what side of the fence you are on, keep these factors into consideration: timing, finances, and lifestyle. Allowing yourself to get hung up on another person’s outcome (i.e. homeownership) may influence you to jump headfirst into a real estate investment that seems unrealistic right now but ideal in the near future.

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About the Author

Debrah Sutherland

Licensed Florida Real Estate Agent

Debrah is a Licensed Real Estate Sales Associate and Certified REO & Short Sale Specialist with a growing team of successful agents. She educates future first-time homebuyers via her co-created e-course and local events. Her 90% referral business has allowed her to close over $13M in sales transactions.
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