For a small family whose members are a combination of busy, lazy, and totally inept at house upkeep-related activities living in a HCOL region where a decent house in a good school district would start around 300-400k - would there be anything wrong with renting forever?? If you met a family like this, what would you think? Would you start judging? Because I think I would....
So to start with some background: I'm married with a 5-yo son, joint household income is about $130k, the only debt is student loans (about $25k that we'd like to pay off by the end of 2016, and about $150k of mostly grad school federal loans that should be forgiven in less than 10 yrs so just paying the minimum income-based amounts now).
We're renting a somewhat pricey (but not too crazy for this area) 2-br + den apt (~1300 sf) which is in a great location (northern VA), with great schools and community, easy access to public transportation, walkable to a lot of places (so we're hardly ever using our paid off car - we fill up maybe once or twice a month), the management company is awesome about maintenance/responsiveness, grocery store right across the street, gym in building, etc. So basically we've been here a few months but have really, really enjoyed being here. My son absolutely loves the school (and so do we).
Our mid to long term financial goals -
1) pay off $25k student loan in 1 year
2) start maxing out our 401ks (right now, we're putting in about 13% including agency matching)
3) save aggressively for a down payment on a house (not even sure how long it would take us to save up 20% plus be able to afford a decent place....we'd be starting from scratch as we have no real savings (~$1k in savings account, $60k in retirement)
4) Maybe retire early for me, but my husband wants to work as long as he can....so I guess semi-FI would be our ultimate goal
So we're right on track (and both on board) with #1 and 2.
However, a) we've loved living here so much, b) are daunted by the uber high housing prices and c) are kind of afraid of unexpected things that could break and we'd both be clueless as to how to fix them (ie: call a professional and spend more $$$) that we've started half-jokingly discussing the option of just renting forever and just invest our "down payment fund" to build up our savings. Added to the above is the fact that it would take us at least 3-4 yrs to save up 20%, which seems so long!
Based on my calculations, even assuming rent increased 1-2% a year, it would be more affordable compared to a mortgage on a $400k house which would be on the lower end of the spectrum here (and presumably more prone to expenses as opposed to a newer, more expensive house). Space-wise, we do want another child, but that prospect is looking dimmer and dimmer as I get older, so if nothing changes in our family situation, I don't see a huge problem with 3 people living in a 1300 sf space until our son leaves for college. I could also see us renting for 10 years or so and just outright buying a house with cash.
So those are all the pros....which, now that I've written it all out, seem even more attractive.
Now for the cons - the stigma of not owning your own home (even my boy has asked why most of the kids on his bus live in a "real" house and we don't! haha) - is this just something I'm being paranoid about or is it a real thing? Also, never really having our own outdoor space, garage, basement for kids, etc.; not enough room for guests; never having a paid-off house (and the financial flexibility/security that comes with that, especially when we're older/retired)...what else?