And were that not enough, Robert Kiyosaki, financial expert and author of “Rich Dad, Poor Dad” takes the idea of homeownership one step further and refers to it as a straight up bad idea...the very definition of a financial liability. He feels most don’t realize they’re starting down a path of deep, long-lasting personal debt.  

While many think of a home as an asset and perhaps a big part of a retirement plan, Kiyosaki feels most don’t really understand the difference between an asset and a liability. According to Kiyosaki, an asset is something that puts money in your pocket, while a liability is something that takes money out of your pocket. Basically, your house is a liability, as it consistently takes money out of your pocket in the form of mortgages, taxes, insurance and maintenance in hopes that maybe someday when you sell it, you’ll recoup a profit. Along the way, you’ll also spend an untold fortune on a new roof, new plumbing, yard maintenance, etc.   

Kiyosaki does, however, point out that homeownership can actually be an asset...for the bank! He says you don’t really own a house, you own a mortgage. And anytime you miss payment or default on your loan, like during a recession, job loss, global pandemic or medical emergency, the bank will snatch your house right out from under you and leave you with none of your investment. It’s a sobering point of view and certainly one worth consideration. 

So contrary to basically everything you’ve been taught, a better option than owning a home can be renting one. Plenty of investors are realizing the advantages of renting, and investment experts at Investopedia developed a list of the top 10 reasons that renting may be a better option. 

Lower Costs — When you rent, the landlord is responsible for all maintenance, improvements and repairs, including appliances. Those who own a home are acquainted with those unexpected problems—and costs--that seem to come at the worst possible time.  

Special Amenities — Living in a rental complex often offers luxuries that most homeowners would never be able to afford, including pools, saunas, fitness centers and safe, covered parking. Adding those amenities to your home, or paying the homeowner’s fees in a condo, would be cost prohibitive for most people. 

No Taxes — Besides mortgages, utilities and repairs, homeownership comes with a heavy burden of taxes, including property, federal, state and local. Depending where you live in the country and how your taxes are calculated, homeowners can pay thousands of dollars while renters pay none. 

Nothing Down — While renters need to put down up-front costs, including a security deposit and one or two month’s rent, home buyers generally need to front 20% of the sale price of a home, upfront and in cash. Depending where you live in the U.S., a purchase of a $100K home could require $20K as a down payment, while high-cost states like California, with average home prices above $500K, would require a $100K down payment. Saving up for those initial costs is prohibitive for many, and takes a considerable amount of time.  

Flexibility — Owning a home means staying put, but renters can pick up and move whenever and wherever they feel like it (though yes, there can be lease terms to consider).   

Less Risk — As we’ve seen in recent decades, fluctuation in the stock market, recession, or even inflation can adversely affect homeownership. Adjustable rates may "adjust” out of reach for some, while property taxes may increase by huge leaps. Renters experience none of the risks that come from the stock market or national emergencies. 

Downsizing — As people age and they have less need for a large house, it can be hard for them to break free of the expense of owning a home. Renters can do what they please when their lease is up. Being able to downsize to a smaller place is a key benefit to renting, especially for those near retirement age or are becoming empty nesters. 

Reliable Costs — When signing a lease, renters know exactly how much they will be paying for a specific amount of time. While mortgages also come with a fixed monthly cost, those with adjustable-rate mortgages are at the mercy of rising interest rates and terms.  

Lower Insurance — Insurance policies for homeowners are astronomically higher than they are for renters (who are only insuring their personal property inside of their units). Renter’s insurance can be a few hundred dollars per year, while homeowner’s pay several thousands of dollars to cover replacement costs, damages (depending on their local climate), and liability for people who might be injured while on their property. 

Lower Utilities — Rented spaces can be cheaper to heat / cool and therefore have lower utility costs. With outdoor landscaping that needs to be watered, outdoor lighting, and especially the many exterior walls that increase heating and cooling costs, homeowners pay much more for utilities. 

So, if you do decide to rent and save all the money that would normally go to mortgages, insurance, taxes, and upkeep, how can you best invest that money? Besides the obvious retirement funds, stocks and bonds, experts at Investopedia shared their top 5 novel investments: 

Peer-to-Peer Lending — While a newer phenomenon and unknown to most, P2P lending (as it’s commonly called), offers loans for businesses, personal use, and a wealth of other things. By joining a pool of investors who are willing to loan money to others, you can build a sizable amount of wealth in a relatively short time.  

Real Estate — Instead of owning the home you live in, you can invest in rental property like a house, duplex or an apartment building, and collect rent. You can even live in one of the units, basically for free (your tenant's rent pays your mortgage). While property ownership has many of the same risks as homeownership, you can also invest in residential property without having to be the landlord.  

Gold — Precious metals have always been a strong competitor to stocks, and are easier to liquidate if necessary. With a variety of ways to invest in gold — coins, bars, exchange-traded funds, mining or futures — you can invest whatever amount you can afford to risk.  

Business Owner — While it can produce the highest return on your investment, owning a business is not for the risk-averse, with its high rate of necessary commitment and, unfortunately, failure. If owning a franchise or a brick-and-mortar location seems way out of reach, consider starting a small business that you can work on in your free time. That way, you won’t be giving up the security of your regular paycheck while starting to build future wealth.  

Crowdfunding — If you don’t have spare time to start your own small business, you can always be part of others’ businesses. With a wide variety of ventures to invest in through crowdfunding, you can own part of a business and will be financially rewarded when it succeeds. (Remember, there is the risk of failure where you could lose your entire investment.) Sites like AngelList, CircleUp, SeedInvest and Wefunder allow you to get in on the crowdfunding game with minimal investment and risk. 

So, no matter what you decide about renting vs owning, or any of the other big financial decisions you could make, do your research, don’t make assumptions, and think hard before you adopt the opinions of “experts” (even us).