For many people, owning a house encompasses the American dream. Having a home you can call your own feels like a significant financial milestone. But for some, renting has proved to be a more advantageous approach.
GOBankingRates spoke with self-made millionaires Tanya Lamont, owner of Conversational, and Josh Bolstad, CEO of Niche Ranker, to discuss the ways they’ve remained wealthy by opting to rent versus own.
“I think the key to building and maintaining wealth isn’t just about how much you earn, but how strategically you manage your assets and liabilities,” said Bolstad. “Renting, for me, has been a strategic choice rather than a necessity. When I compare the flexibility and liquidity that renting offers versus the potential financial burdens of owning a home, renting has always come out on top.”
Below, both he and Lamont share the advantages that led them down the renting path.
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Renting Maximizes Flexibility and Financial Liquidity
“[Renting] has given me the much-needed financial flexibility in this rapidly changing market,” said Lamont. “I haven’t tied up so much capital in real estate that I am impeded from rapidly shifting to take part in other high-return opportunities that would move the needle regarding my company’s goals.”
She said this form of agility is one of the cornerstones underpinning her wealth preservation strategy.
There Are Lower Overheads and Reduced Risk
According to Lamont, there are hidden costs to homeownership: maintenance, property taxes and market volatility. “By renting, such overheads and risks are kept low, and therefore I can reinvest my resources in my business and other high-return ventures,” she said.
Not only has it helped her build wealth, but it’s also given her the satisfaction of not having her assets tied to the whims of the housing market.
Bolstad similarly agreed. “Renting allows me to allocate more of my capital into investments that generate higher returns than real estate typically does.”
Instead of locking up a significant amount of money in a down payment or home equity, he said he’s been able to invest in businesses, stocks and other ventures that offer greater growth potential.
“I also avoid the high costs associated with homeownership, like property taxes, maintenance and unexpected repairs,” he pointed out. He said these savings are substantial, allowing him to then redirect these funds into more productive investments. “I think this is a smarter way to use your money if you’re looking to grow your wealth over time.”
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It Provides the Freedom To Live a Quality Life
“It has also given me the luxury of choosing where I want to live in terms of lifestyle rather than financial reasons,” said Lamont. “The freedom to move about as my personal and professional needs change has been invaluable.”
Bolstad noted the same. “Renting gives me the freedom to move as my business and personal life evolve. I don’t feel tied down to a particular location, which is crucial in today’s fast-paced world.”
Why They Recommend Renting
“I would suggest this strategy to others because renting can be a way to minimize risk while maximizing financial flexibility,” said Bolstad.
He explained that homeownership can sometimes feel like a forced savings plan, but it’s not always the most efficient way to grow your wealth. “By renting, you maintain liquidity, which is vital for taking advantage of investment opportunities that can arise at any moment.”
For anyone serious about growing and protecting their wealth, especially in the early stages, he believes renting can offer more advantages than homeownership.
Lamont equally noted that it’s a strategy she would recommend to anyone looking to retain flexibility, enjoy financial security and to be able to cash in on emerging opportunities. “It has been a strategic choice that, for me, will keep my money at work and not be tied up in bricks and mortar,” she stated.
Overall, she said it is about smart allocation of resources. “In my case, it has meant renting my home but owning my business.”
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This article originally appeared on GOBankingRates.com: I’m a Self-Made Millionaire: 4 Ways I’ve Stayed Wealthy Renting vs. Owning
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
