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Don’t Overpay For Rent

I’ve always seen renting as “temporary” and buy as permanent. So the two years I spent renting in the Baltimore, MD area, I hardly ever took any time to decorate the place and I tried to pay as little as possible. From my point of view, because it was temporary, not actually mine, and something whose cost I wanted to reduce as little as possible, it made no sense for me to pay more than the average rent in the area or even spend money on decorating it. Now, I didn’t pick the absolute cheapest rent (though I had a roommate and am fairly certain I was paying a pretty good price for rent) but I was pretty close to it and I did very little upkeep outside of vacuuming. As the saying goes, who washes a rental car?

Now, I don’t entirely agree with the idea that renting is “throwing your money away,” as many homebuying proponents espouse, but I do see it merely as an expense that should be reduced to as little as reasonably possible. The reason why it’s not throwing your money away is because the housing market has always been difficult to predict, though the trends were always pointing up in the long run as they are even now, and because a house isn’t always a winning proposition even if the value goes up. You’re throwing a lot of money away in interest payments (a small part of which you get back), you’re throwing a lot of money away in maintenance, and you’re throwing a lot of money away in taxes, insurance, etc – all of which are not concerns (though they’re integrated into your rent price) for a renter (I bring these up in the Devil’s Advocate post Rent Forever, Don’t Buy A Home [3]).

So, when friends of mine talk about how they can get this awesome apartment with all these incredible amenities for the low low price of something like a thousand dollars per person, I wonder to myself why they would pay so much for rent when cheaper options, though with fewer amenities, exist. Granted, part of this is in perception, some people like to rent in nicer areas with great amenities and are willing to pay that price, I certainly would pay a higher price for a nicer area (from a crime, convenience perspective, etc. within reason); but sometimes the numbers are exorbitant – I know people paying at least twice what I paid in rent!

Are you the stingy renter like me? What are your thoughts? Or are you on the other side, willing to spend the money for a really nice place, please share your perspective!