Editor's note: Nearly 70 percent of us are owner-occupants, which means that more than 80 million of us rent -- and it's a good thing. Without rentals there would be little if any need for real estate investors, apartment developers would be bankrupt, and real estate brokers who sell investment properties and manage rental units would be out of business.

There are circumstances where renting can be a more attractive housing option than ownership, but such a view is voiced infrequently. The commentary below, by John O. Andersen, presents the case for renting in a way that is both logical and realistic.

My spouse, Mandy, and I are both middle-aged. We have been married for eleven years. We have two children ages 10 and 8. We have zero personal debt. We have a spotless credit history. We have been profitably self-employed for seven years. We have put away a substantial sum of money for retirement.

And we are renters by choice.

We are renters because renting meets our needs better than owning a home. Situations change, however, so we will stay open-minded to the home ownership option. But at least in the next 5 years, we will not be in the housing market. Nor will we save specifically for a down payment.

In a culture in which home ownership is supposedly the ticket to middle class respectability, we often feel constrained to defend our choice to rent. Yes, we confess our deviance from conventional wisdom on this issue. Yet with each passing year and steady accumulation of financial assets, we feel more comfortable with our questioning of the accepted notion that home ownership is the only way to go.

Why Rent?

• We like the flexibility of renting. In 1997, we moved from Indiana to Oregon. We were grateful to be free to move when we wanted without the burden of selling a home before we left. Granted, in some markets selling a home is not much of a fuss because it can be done quickly and profitably. Many markets, however, are less favorable.

• With relatively limited leisure time, we enjoy the lesser maintenance and repair demands of renting as compared with owning. When we do have time together, we like to play, not work on the house. Some people have time for both. In an ideal situation we would have time for both, but when forced to make a choice, we always opt for non-homeowner related activities such as travel, reading together, and visiting museums.

• Renting relieves the pressure to earn a large income or pursue dual careers.

We have made a commitment to never get a mortgage that is more than double our annual income. This is to avoid becoming "house poor" (in our opinion, not having enough left over to invest in savings and for fun activities right now). Currently we live in a three bedroom "starter" non-fixer-upper home which likely sells for a minimum of $160,000.

If we were to put 20 percent down on a $160,000 home, we would have a mortgage of $128,000. Considering the no-more-than-double our income rule, this would require an annual household income of $64,000 or greater. We do not earn that much yet because some time ago we made the following two decisions:

1. We want to homeschool our children. Thus, one spouse will be out of the work force; in this case, Mandy.

2. We want our business to remain a solo business. This is because I have a strong preference to work alone, and avoid the stress of employing someone else.

We are content with the reality that our income is necessarily limited by the hours I can work. Because of our desire for simplicity, and, to the greatest extent possible, hassle-free days, we favor this less remunerative option. We believe that changing this in order to "qualify" for a mortgage would be a bad move.

Our rent is less than the monthly expenses of owning the home in which we live.

The upshot of this is that lower cost renting enables us to invest those savings and other funds in a big way. Here are three areas into which we funnel those savings:

1. Family Travel

Each year, along with around five local 1-3 day camping trips, we like to take a 2-3 week vacation. We went back to England in 1998 to visit Mandy's family. In 1999, it was San Francisco and LA (by train). This year it was a long distance car trip to Madison, Wisconsin and back. Next year it will be another train ride down the coast (this time riding in first class--the sleeper car). In 2002, we think it will be time to "cross the pond" again and reacquaint ourselves with England.

2. Short-term savings

We try to set money aside for big-ticket items in the future, like replacing our 11-year-old car. We intend to pay cash for the replacement.

3. Medical fund

We have a major medical policy with a $5,000 deductible. We are working to build up a separate account earmarked solely for doctor bills. Once we reach $5,000 in that account, we will let it sit and accumulate interest.

Right now, if we were buying the home in which we live, we wouldn't have money for those three priorities. So when people go on about how renting is "money down the drain," we silently disagree. As demonstrated above, renting enables us to accumulate more than sufficient "equity" to help us reach our financial goals.

We have always had good landlords. Horror stories about landlords abound, but having been a renter now for over 15 years and Mandy, for her entire life, we do not have any horror stories to report. On the contrary, we have many good memories.

Once after a heavy downpour in Indiana, we noticed a few small water spots on our bedroom ceilings. We notified the landlord. After looking at the situation (which was not dire and repairs could have waited for a year with no further damage), he promptly contracted to have the entire roof replaced.

This landlord also trusted us to call plumbers and electricians (he gave us his approved list) and just send him the bill or deduct it from our rent. When we first signed the lease, he told me that he saw himself as the best landlord a person could ever have, and in the four years we lived there, he proved it.

Our experience leads us to conclude that if you choose landlords wisely, keep their property clean, and pay your rent promptly, the chances of having a positive experience are very good.

Renting a small place makes it difficult to accumulate things

Basically, we do not have anywhere to put the stuff. We suspect that if we owned a home with more space, we would buy more stuff to fill it. We've observed that the psychology of home ownership frequently induces people to accumulate more things than if they were renters. We fear we might fall into the same trap.

To be fair, we know of homeowners who are as frugal or even more so than we are. And, we acknowledge that out-of-control spending and home ownership are not necessarily linked. Nevertheless, renters in our particular community have a built-in excuse for not accumulating stuff (we are supposed to be "poor"), hence, nobody applies pressure. We like that a lot.

Renting is Simply a Better Choice for Us

It's not my intention to persuade homeowners to sell their homes and become renters again. Many homeowners could show me how their financial situation is better as a result of owning a home. I do not question their claims. And I freely admit that in many cases, if you can afford to, it makes more sense to buy than to rent.

Nevertheless, our lifestyle preferences and finances decidedly favor renting. Others who are in major transition periods (changing careers, going back to school, building a business, downshifting, etc.), or have time-consuming hobbies, or major interests unrelated to home projects, may also find that renting is a good interim, if not permanent option.

We like renting. It simplifies our lives, preserves our time and energy for the things we are passionate about, and makes it possible for us to build a solid financial future. We cannot ask for much more than that.

John Andersen is the author of Uncoventional Ideas: A Collection of Short Essays Which Question Mainstream Thinking and operates a site at UnconventionalIdeas.com

Published: December 6, 2000

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