Adam Conover’s Renting vs Owning a House

In the episode of Adam Ruins Everything - Why Home Ownership is Actually a Terrible Investment, he debunks the misconception of owning a house as the ideal choice for settling. Home ownership as the “American dream” or “the ultimate middle class ideal” is not so ideal after all since, as Adam says, “a lot of people who shop for homes would actually be better off renting”. People opt to home ownership with their primary reasons such as freedom, stability, and privacy, however that is not the case as renting offers more mobility thus freedom to “move whenever you want” as Adam puts it. Moreover, owning a house does not essentially equate to stability in financial sense as studies show that such mentality leads to higher unemployment; while you can have privacy and security either way. Adam also revealed that both options bill you periodically – “mortgage to some bank” or “renting to a landlord” whereas the former makes you pay off interest over time and the latter gives you service privileges.

Such pros and cons are yet to be considered by different people of different dispositions in life. Although there are truths mentioned and exposed by Adam, it does not necessarily apply to everyone, or to put it more clearly – not everyone realizes such disparity between the two because of certain mentalities that fixate their decision making. For instance, a typical newlywed couple plans to settle for good, and home ownership as their principal goal is such an eventuality. For them, it would be an investment regardless the long years they agreed upon of paying off. But is that the case really? People would rather choose to be enslaved by financial obligations just to gain a real property without considering that the interest they have paid is better spent on other investments if they had only rented. Conversely, renting or leasing a place to live in offers more flexibility with regard to mobility and stability. But is that the case really? Renting also comes generally with contract commitment and rules set by the property-owner whereas having your own house allows you to creatively modify it in greater extent at your own discretion. Indeed, renting a place does not burden you much with paying off interest hence the amount that would have been paid as mortgage if you owned a house can be better invested on other things. On the other hand, aiming for equity calls for another consideration. Renting technically does not earn you that, homeownership does. As the value of land increases over time, such equity can be earned if you completely own the property; being said, the value of renting a place is also subject to surge.

To sum up, the dichotomy between renting and owning a house clearly gives people the idea what suits them best. It is not all right to state that one is the best. Yes, one can be better than the other which is dependent solely on the stature of the person. One can opt to renting their whole lives as they wish to for they think it is better than homeownership. One can also invest on a property and arrange the financial aspect accordingly because they think it is more worth it. The decision which is better lies upon the person’s goal, status, and even financial capability. Home ownership might be a terrible investment, as Adam claims, and renting would be a better choice. We have to be reminded that the respective advantages and disadvantages of each choice are for us to consider. Renting might be the better choice if it fits the person’s disposition best and the same applies for homeownership per se.

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Position paper

Math 2 (Practical Math)

26 October 2018