Buying Vs Renting: Beyond the Numbers

If you want to see what the numbers say, check out my previous post: Buying Vs Renting: The Numbers.

Types of Data

Having taught the scientific method for many years, I have spent a fair amount of time helping students analyze, understand, and interpret data. There are many forms of data. Not all data is quantifiable. Data that cannot be expressed numerically is known as qualitative data. It is no less important than the quantitative stuff, but it's harder to analyze, so it often gets overlooked in large-scale data analyses: to the detriment of anyone affected by decisions made based on that data.

When it comes to your life choices, it's important to consider all of the data. Your life will be affected by the raw numbers yes, but also by the qualitative aspects of life. For most of us, our goals include a financial component, but also quality of life.

When it comes to deciding whether to buy or to rent the place you live in, quantitatively it makes more sense to rent for most people. It's really a gamble if your property will grow in value enough to make up for the cost of a mortgage and the opportunity cost of not investing your lump sum. But financial costs are not the only ones to consider.

Qualitative Data

There are four factors most people should consider in addition to the financial side of buying vs renting:

1. Pride in Ownership

2. Sense of Security

3. Building a Community

4. Flexibility

Pride in Ownership

This one is a big win for buying. If you own your home, you will likely feel a sense of accomplishment and will probably invest more in making it yours. You may upgrade the interior, buy furnishings that make your home feel that it's really yours. This raises your quality of life for the duration of the time you live there. You will feel a sense of pride in your home that renters don't typically have.

Sense of Security

Having recently been evicted by an owner who sold their property, I can personally attest to the vulnerability of being a renter. When you are renting, you can never been sure that you'll be able to stay in the same place year after year. This is another win for buying. When you buy your home, even with a mortgage, you can be fairly certain that you will be able to remain in your home for years to come. Additionally, in the UAE, you are required to buy life insurance when you get a mortgage, which guarantees that your mortgage will be paid off upon your death creating more security for your family.

Building a Community

I call this one a tie. There are many homeowners who never socialize with their neighbors or invest in their communities just as there are many renters who build friendships with their neighbors and spend time making their neighborhood a better place to be. You can work towards a positive community either way.

Flexibility

A clear win for renting. If you don't buy your home, you have the ready availability to move to be closer to family, work, or school. You can easily upsize or downsize as your family needs change. You can relocate to be closer to new developments or to get away from annoying construction noise. Renting allows you a level of freedom of movement that buyers don't have. It also insulates you from economic issues if you face unemployment or other financial difficulties as you have the option to find less expensive housing.

Weighing It Out

In the end, for most people, the decision to buy or to rent will be swayed one way or the other by these qualitative factors (not just the raw numbers). Weighing them out will be different for different people at different stages of life.

For my family, renting is the clear winner right now as we value flexibility most. We don't know how long we will stay in this country, and we like having the sense of security that we get knowing we can always relocate to a less expensive place if our income no longer meets our expenses.

We have a lovely community of owners and renters around us. We spend time getting to know our neighbors and making our apartment feel like a home; even though we know we may have to move again in a year or two.

What about you? Let me know what makes the most sense for your situation in the comments.

My daughter walking at the edge of the water near our rented apartment

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