Renting vs Home Ownership: Hurricane Edition

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The transition from homeowner back to renting has been an interesting and enjoyable experience. It was different to put ourselves out there in a rental application, tour properties, and ultimately finding someone who would rent to an early retiree without a traditional W-2 income. Giving up control of small things we would change has been an adjustment too, we value preparing food at home and would have already swapped out the stove and dishwasher if it was our house.

Now that I’m renting I occasionally flip on the morning news I smile when I see the following commercials roll through:

  • Plumbing: Let the landlord deal with it
  • Roof Issues: Also the landlord’s responsibility
  • Deck Repairs: Not my problem
  • Foundation: Still not my problem
  • AC Repair: The landlord does that too!

Wait…none of these are my problem. For the last fifteen years, we’ve been responsible for finding/hiring/waiting for/paying all of these vendors in our money losing housing ventures. Now that we’re renting, we just take a picture and send a text to our landlord. So far its been too good to be true!

One of my “less bad” home purchases

Hurricane Edition

We haven’t exactly disclosed where we moved, but if you’ve followed along the blog you can probably pin our location on the southeast coast somewhere between Wilmington NC and Savannah GA. A couple weeks ago this put us squarely in the path of Hurricane Dorian. Mandatory evacuation orders were issued and we had to figure out what to do. Fortunately since we were renting, our biggest concern was if/when to leave, not damage to the property.

What was the extent of our preparation? We made a short packing list of a suitcase worth of stuff that would be difficult to replace and walked through the house taking a video in case contents were lost. We had renters insurance if a tree came through the house. Then we setup the coin on frozen water trick in the freezer in case the power goes out were done. It turned out we now had three days to watch others prepare and figure out our travel plans.

Here’s the list of things we didn’t have to worry about:

Wind damage? The siding and roof isn’t our responsibility. The worse that could happen is having some windows blown out and someone looting our stuff. There’s insurance for that.

Tall trees behind the house coming through the house? There’s renters insurance for that. Maybe we have to find a new place if it takes a while to repair, but not a big deal.

Long lines for sandbags? That would be miserable to sit in. Fortunately we rented a place much higher above sea level and in master development with strong water management. The nextdoor arguments over “people taking too many sandbags” were unfortunate to watch. If it did flood, the stuff is replaceable.

Backyard flooding? I’ll pick up some debris and mow what’s left. If the HOA starts complaining, the landlord has to replace the grass.

That leak that showed up in the garage when we got back? We checked to see if it was on our stuff (which it wasn’t) and called the landlord to let him know.

How did everything turn out?

Fortunately our area fared pretty well during the storm with power outages and a few downed trees being the extent of the damage. We weren’t present for the storm, but all signs are the house kept power through the entire ordeal. After the storm but before we returned, the landlord checked on the house and let us know it was fine. Outdoor cleanup was quick and this only turned into a minor inconvenience.

Two and a half months of renting, do I think I’ll be a homeowner again?

It will all come down to price. The standard rule for buying a rental property is the 1% rule. Buying a residence shouldn’t be much different than renting a property, its merely a financial decision to replace renting with ownership. The 1% rule implies it makes sense to buy if a house sells for 100x or less of its monthly rent. If we are going to use the house as a primary residence, we can pay a little bit more than 100x thanks to the benefits of owner occupied mortgage financing, reductions in property taxes as a homestead, and the premium we value on control.

In our case, I think we would pay an additional 25% over the one percent rule…but that’s about it. However, I refuse to ever feel trapped in a house again and be extorted by real estate agents preying on someone who can’t reasonably convert their house into a rental property. As the saying goes, you make money on a house when you buy and not sell. I can’t make sense of buying in this current market.

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4 Replies to “Renting vs Home Ownership: Hurricane Edition”

    1. The first house we bought was sixteen years old and so is the rental. All the same stuff is breaking and it’s nice not being the one figuring it out.

      We’ll buy again, but the break is so nice

  1. We also recently went through this transition. My landlord has been lucky thus far without even a phone call from us for an unfortunate fix of something broken, but I love the feeling of not having to worry about it. We have toyed with the idea of trying to buy our rental, but why complicate things and lose our flexibility?

    1. It’s a great feeling! Do you think you can pick it up at a reasonable price? It’s nice being familiar with a property. FWIW, I wouldn’t buy mine, but that’s because it’s now 17yrs old and there’s a to of life-cycle replacements that’ll be hitting all at once

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