Good Financial Sense?

I have something to confess: My wife and I are renting an apartment in New York City, despite having the ability to purchase one, and despite the fact that we’ll be shelling out more money for rent than we would paying a monthly mortgage. But for us, what made the most financial sense in this situation didn’t end up being what made most sense. We opted to rent a nicer, larger apartment to fit our lifestyle and immediate priorities.

When you decide to buy, you are essentially locking yourself in to your home for a set period of time – if you leave too soon, you’re inevitably going to lose. But there’s no long-term commitment in renting, which is going to allow us to live comfortably in Manhattan and within walking distance to things we like to do – shopping, restaurants, etc. Regardless of the fact that we may spend more in rent and lose what we would gain through lower monthly mortgage payments, funding an investment and building equity, we lose in flexibility, the opportunity to walk away, and the chance to buy when the right opportunity presents itself.

Before every financial decision you make, you have to ask yourself, “Does it make sense?” And what makes most financial sense may not always be what makes most sense.

For us – the price of flexibility (renting) turned out to be the better buy.