- Tori Dunlap is a 29-year-old multimillionaire who chooses to rent rather than buy.
- She feels that renting currently offers her more flexibility and is a smarter financial decision.
This as-told-to essay is based on a conversation with Tori Dunlap, a 29-year-old Seattle-based financial educator and founder of Her First 100K. The following has been edited for length and clarity.
When I was 22, I almost bought a $175,000 condominium. A day before closing on the home, I backed out. That was one of the best financial decisions I've ever made.
Today, I'm a multimillionaire who still chooses to rent.
I think of renting as paying for a service, and liken it to a hotel. I get somewhere to sleep and to put my stuff. Also, I get a safe place to stay with certain luxuries that homeowners don't have, like flexibility and ease of mind.
I think the idea that renting is throwing money down the drain is absolute b.s. and one of the most pervasive personal finance myths that's just meant to shame people. I currently put my money in the stock market and see better returns than locking it into a mortgage.
Renting is a smarter decision for me right now
I live in a three-bedroom, two-bath townhouse with a garage in North Seattle, where the average home price is nearly $900,000. My rent is $3,250 a month. If I were to buy a similar place, my monthly payment — including mortgage, insurance, and taxes — would be higher than my current rent.
Renting is flexible, and I don't have to worry about things that homeowners worry about, like committing to a particular place or neighborhood or dealing with a burst pipe. I travel a lot for work, and I don't have the time or skillset to fix things if they break. My landlord lives in a house right up the hill from me, so when I need him, I can call him, and he's right there.
When you buy a house, there's a sense of permanence that I just don't have right now. In 2021, I actually packed up my entire apartment, ended my lease, and traveled and lived out of a suitcase for eight months. I'm glad I'm not doing that anymore, but I'm really glad I had that opportunity.
Renting is also a smarter financial decision right now, with how high interest rates are. It's cheaper to rent in many major cities.
I backed out of buying a house and became a millionnaire
At 22, I had just graduated and found a decent-paying job in Seattle. For the first couple of months, I lived with my parents.
My well-intentioned parents believed that buying a house would be a smart financial investment for me; otherwise, I'd just be giving my money away to somebody else.
Although my job was in Seattle, we looked at a $175,000 condo in the town that I grew up in 35 miles outside the city. I couldn't afford anything closer. I had enough money for a 10% down payment, and my parents were so passionate about me buying a house they were willing to loan me a bit of money if I needed it.
But it would've been a four-hour daily commute, and I wouldn't have been able to have a social life.
The day before signing on the condo, I decided to pull out.
I have no regrets about my decision. The condo is now worth over double what I would've paid, but I think my life would've been very different and much worse if I had gone through with buying it.
I probably wouldn't have started my business, which helped me become a multimillionaire, because being in Seattle allowed me to attend networking events, where I met my company's current COO.
I encourage people to consider three things before buying a home
1. Do you actually want to be a homeowner, or is it just what you think you're supposed to do?
That's the most important question. Is it something you want, or is it what your parents want for you? Do you only want to do it because you think it's a "smart financial investment"?
One of the reasons I didn't want to go through with my condo purchase at 22 was because it felt like a collaborative decision spearheaded by my parents rather than a decision I myself wanted to make.
Homeownership feels like something we have to do to become adults and build our wealth. So many people, especially those my age who can purchase homes, end up moving an hour out of the city to the suburbs.
I have friends who have moved a half hour outside the city and ended up selling their houses a year later because they couldn't see any friends or have their social community anymore.
There are a lot of things to consider beyond just whether a decision is financially smart.
2. What's the total homeowner cost, other than the mortgage?
There are more costs to being a homeowner than just the mortgage. I always want to encourage people to consider both the financial and mental costs of homeownership.
If you can't put down 20% for the down payment, are you paying for private mortgage insurance (PMI)? That's not the end of the world, but it's something to think about.
What is the total cost of owning a home — the mortgage, the insurance, the potential PMI, the property taxes, the maintenance costs, and any sort of refurbishing — compared to what you're paying renting?
There can also be homeowners association (HOA) fees. The average HOA fees I've seen in Seattle are around $400 a month. You need to be sure that if you're paying that amount of money, the property is managed well.
3. If you're thinking of taking out a mortgage, how good is your credit score?
If you have a pretty good credit score, it's going to make the cost of your house cheaper because you're going to get a better interest rate.
But if your credit score is not great, it might be worth spending six months diligently raising it before you start thinking about a mortgage.
I don't think I'll rent forever
My finances now are different than they were when I was 22. I can afford a house in the place I want to be now, and that's a privilege that comes with my financial standing.
For me, renting is a choice, but for many people, it's not. It's a decision made for them because of how inaccessible home ownership is.
Many policies could better support Americans' financial health and their ability to purchase real estate, such as addressing the student debt crisis, stagnating minimum wages, and lack of paid family leave.
Renting really fits the current season of my life, but I don't think this is the choice I'll make forever.
The itch to buy has been there for probably about a year. I'm 29, about to turn 30, and I'm in this transitional period, asking myself, "Where do I want to live? How do I want to spend my time? What do I actually want?"
I'm definitely going to miss the parts of renting that I love right now, such as the flexibility. But I want to put wallpaper up. I want to be able to customize my house. I want to know that I have a more permanent place I can come home to.
If you have a unique experience renting or buying a home and would like to share your story, email Jane Zhang at janezhang@businessinsider.com.