Indianapolis Area Real Estate Blog

5 Reasons You Should Not Buy a Home

Home for Sale in IndianapolisBuying a home is a major investment and one that should not be taken lightly. I know it’s not common to have a Realtor give you reasons why you should not own a home, but, there are times when buying a home is not the best financial decision.

Lack of Job Security or Possible Relocation.

There are costs involved in buying and selling a home that would be difficult to recoup in a short period of time. If it takes two incomes to qualify and both wage earners don’t have job security, you may want to wait to buy or look at buying a lower priced home.

If you may be relocating within a few years and don’t have the luxury of a corporate paid relocation, you should consider renting.

Major Life Changes

I see people leap before they take time to examine all their options. When major life changes happen, such as a death in the family, divorce or a new child, it is often better to wait until you have a plan in place before committing to a new mortgage or a bigger home.

New to Town or Relocation

Unless you have had enough time to research neighborhoods, schools, commute times and amenities, it may be better to rent short term and familiarize yourself with your new city and community. See #1 if you think this may be a short term relocation.

You Have No Savings After You Buy

Homeownership is not over when you close and move in. Owning a home requires routine maintenance you must perform to preserve your home and equity. You will be responsible for yard work, watering the lawn and the cost of water, which equals time and money. Other yearly fees include check-ups on your heating and A/C, gutters cleaned, snow and ice removal.

You should also have reserves for major appliances, hot water heater and roof. The amount of reserves depends on the age of the unit.

You Prefer a Carefree Lifestyle

There are advantages to owning a home, as well as disadvantages. Some people do not want the responsibility or maintenance of owning a home. (See #4) Often, rentals come with appliances and maintenance included.

Real estate is not a liquid asset you can easily dispose of. If you need to move yourself or your money, it is generally not a quick process.

I’m sure there are other reasons people prefer to lease rather than buying a home.

I’d love to hear your reasons and any comments.


#1 By Ricky Potts at 12/30/2011 7:11 AM

First off, thanks again for the follow on Twitter. Glad that I could spark a blog post for you. Love it! Since I don't think I will ever want to buy a home, I wanted to respond to this blog on each point. So... here I go!

Lack of Job Security or Possible Relocation
I don't want to deal with the process of selling a home in the first place, let alone if I have to move or choose to leave the cold winters of the Midwest. But I do have a job. We both haves good paying jobs, and are very comfortable with our salaries. That being said, the money that we save on renting a place is going to pay for things such as travel that we enjoy more than anything. So us renting, in the long run, will save us tons of money.

Major Life Changes

We are pretty lucky here... not many life changes would effect us. A death in the family has happened, and didn't change anything in terms of how we pay our bills or whether we owned a home or not. But i can see how and why that might be an issue for folks.

New to Town or Relocation

We welcome this one. We have been in Indy for about 10 years, and are ready for what's next. Relocation excites us!

You Have No Savings After You Buy

I couldn't imagine a life without savings. A certain percentage of my income goes to savings and I will forever treat my bank accounts as such. This is for retirement more than buying a home.

You Prefer a Carefree Lifestyle

Heck yeah we do. If my AC goes out... I am a phone call away. The dishwasher stopped working? A phone call away. I was at Sears the other day and a fridge was $3,000. Um... came with my place! So did the dishwasher, washer and dryer, etc. If ANY of those break, they are fixed within 24 hour or replaced. That is an ease of mind that I can't replace.

Thanks for writing this. It's nice to have someone agree with me that owning isn't for everyone. It seems to be a trend in the Midwest... graduate college, get married, have kids, buy a home. Not for us! I look forward to more blogs.

#2 By Paula at 12/30/2011 7:44 AM

Thanks for your input and the idea for this post! It's really great to hear from someone who has no desire to ever buy a home. There is a lot of freedom and flexibility in that decision.

We have lived from the east coast to the west coast and a few cities in between, due to relocation. We have rented and bought throughout the years, depending on the circumstance. It is difficult when you are relocated to consider the cost and inconvenience of selling a home before you can pack up and move.

We have actually had a good return on our investment in real estate by buying instead of renting. Luckily, we were transferred before the bottom fell out of the market. Still, if I were transferred today, I would rent and probably couldn't sell my current home for what I have invested in it.

There are pros and cons and each has to be weighed against a person's long term goals and plans. Not many have thought through the long term implications on their lifestyle as thoroughly as you have.

And the cold Midwest winters.....have me longing for the sunshine in Phoenix or SoCal about this time every year!

#3 By Dena Stevens at 12/31/2011 6:42 AM

Great post! It's not true that Realtors are always pushing people to buy. There are some very good cases not to buy as you have pointed out here. And if the potential buyer still wants to buy maybe they should consider down sizing or bringing their wants and needs, expectations down a peg or two.

#4 By Paula at 1/2/2012 9:19 AM

Dena - There are times when people should not buy a home and certainly they should not overextend themselves to do so. Often, the desire for more home can lead buyers to get caught up in the moment and forget their actual needs and budget.

#5 By Rich Cederberg at 1/2/2012 0:29 PM

Every potential home buyer should read this list. #4 is particularly important. There are a lot of expenses that come up, especially if you're a first time home buyer. Think garden hoses, appliances and tools for home repair. These things add up fast and if you've depleted your savings just to buy a home then you'll be stuck in a tight situation if something major arises. Great post.

#6 By Paula at 1/5/2012 6:17 AM

Rich - I didn't even think about the cost of tools for minor fixes around the home. You can guess I'm not the repair person in our family:) There are many small items that do add up to a significant amount.

#7 By Seattle Homes at 1/9/2012 2:39 PM

Whenever I have clients in Seattle homes, I also tell them not to expect their homes to be 'investments'. It should be first and foremost thought of as a home.

#8 By Jessica at 1/17/2012 8:10 AM

Changes are very normal but I don't think I would prefer buying a house knowing I don't have savings after and I know for sure that would create another issue. And I don't like moving always.

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