Self-made millionaire has owned 4 homes but chooses to rent instead

Bernadette Joy has heard the arguments against renting. It’s throwing money away. You’re getting killed on inflation. Homeownership is a cornerstone of the American Dream.

Joy, a financial coach and author of “Crush Your Money Goals,” was a longtime believer in the latter point. “I definitely grew up with the philosophy that homeownership was the way to go,” she says.

And when her career began to flourish, she went for it. She and her husband owned four homes between 2010 and 2022, typically owning two at a time — one to live in and another for rental income.  

But three years ago, Joy and her husband sold all of their property and went back to renting. And she says it’s made her richer, not only because she invested the proceeds of the sales into her portfolio, but also because she was able to better focus on her businesses without the stresses and time commitment of managing multiple properties.

“In 2021, when we grew our first million dollars of net worth — that’s when we first started to think about downsizing and going back to renting,” Joy says. “And then it only took us another three years to make our next million dollars.”

For now at least, Joy says renting is cheaper, more flexible and more compatible with her lifestyle, all making it a better fit than life in a too-big house or as an intermittent landlord.

“I could buy a house in cash today,” Joy wrote in a recent article for Bankrate. “But for the last three years, I’ve chosen to rent instead.”

Joy knows that the math can often work in a homeowner’s favor over the long term. When you sign a 30-year mortgage, you effectively lock in a fixed payment, whereas renters, over time, are subject to inflation. If property values go up, homeowners’ stake in their property appreciates while renters often get charged more.

Monthly mortgage payments help a homeowner build equity in their property, while landlords pocket rental payments. And if you can get on the other side of that equation, having other people pay you rent can help you build wealth that much quicker.

Having been there and done that, Joy chooses to rent for a few key reasons.

Homeownership comes with hidden costs

If you’re currently renting and considering buying, you may be playing around with mortgage calculators and figuring out how much home you could get by converting your rent to a mortgage payment. But be prepared to pay quite a bit more, Joy says.

Of course, there are property taxes and home insurance — some calculators include those. But then there’s the cost to make the place look the way you want it, says Joy. “I spent all this money on renovations and furniture,” she says.

On top of that, expect things to go wrong, and in expensive fashion, Joy says. “We had to pay for trees that went down in our yard and roof leaks and plumbing issues and electrical issues,” she says. “People really underestimate all of those costs.”

Being a landlord can be a headache

But what about people who “house hack”? If you buy a second property and rent it out, you can cover your mortgage and even give yourself some extra income toward buying your next big investment.

Joy says that being a landlord often wasn’t worth the hassle. When she and her husband tried to rent their home as an Airbnb, they soon discovered that, given the expenses, turning a decent profit required a headache-inducing amount of work.

They not only had to manage the bookings, but also hire people to turn over the property between stays, Joy says. Things that were broken by guests needed to be replaced. And that’s before the emotional costs; Joy recalls an incident when she was out of town dealing with a family emergency and began receiving messages from an Airbnb guest who didn’t know where to put her shampoo in the bathtub.

“I remember telling my husband, ‘We’re selling this property,'” Joy says. “The emotional labor that was attached to making sure it was rented out enough was not worth it.”

Upon crunching the numbers, Joy realized she could earn more money (and worry less) by selling the property and putting the proceeds into a portfolio of index funds. She does the same thing with the money she’s saved from downgrading to a one-bedroom apartment from her old four-bedroom house.

Renting can fit a more flexible lifestyle

As it turns out, the current digs, at about 700 square feet, are a little tight, Joy says.

“We definitely need to have our own bathrooms,” she says. “But that’s the nice thing about renting. We’ll be here for eight more months, and then we’ll go back to a two-bedroom.”

That sort of flexibility can be hard to come by for homeowners, Joy says. For one, those who are hoping to sell at a short-term profit may be in for a rude awakening, she says. “Real estate doesn’t always go up,” she says. Indeed, the median home sale price currently sits below its 2022 peak, according to Federal Reserve data. And those who bought homes in 2007 likely didn’t see their home recoup its value until roughly 2013.

And for those homeowners who locked in a favorable mortgage rate over the past few years, the prospect of relocating at a higher rate can make moving difficult, Joy says.

“I see so many clients right now who need to move, or want to move, and they feel like they can’t because now to buy a new home, they get a lot less house for a lot more money and at a higher interest rate,” Joy says.

For Joy and her husband, renting, at least for the time being, means having the flexibility to live in a space that suits their needs.

“I’ve seen a lot of people who are stifling their own income prospects or ability to change their careers because of the mental load of, ‘Well, what do I do with this house?'” she says. “My income has grown in the last three years because I’m able to be mobile and I’m not spending all this time and energy maintaining this four-bedroom house.”

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