NEWLYWEDS: Renting Could Be The Smartest Move For Your Future Finances


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File this one under “Sad but true.” The old American Dream of prancing down the wedding aisle and straight into your dream home has quickly become a thing of the past.

In today’s economy, renting is all the rage. In fact, apartment vacancy rates have fallen from 8 per cent in 2009 to just 5.6 per cent at the end of 2011, according to

It isn’t the right path for everyone, but for newlyweds ready for a fresh start, renting could be the smartest move for your future finances. 

Every newlywed couple isn’t a pair of rosy-cheeked college grads, but there’s still a question about whether you should rush into throwing all your savings into a new home straight away.

Amy Bohutinsky, CMO of, said she and her husband learned that lesson the hard way when they purchased a small home two months after they tied they knot. It was early 2007 and they figured they’d just sell and buy a bigger pad when they expanded their family. 

But the housing crisis threw a wrench in that plan.

“Five years later, we’re positively bursting at the seams of the home we bought when it was just the two of us,” she said. “And we’ve lost a substantial amount of money,” due to declining home values.

Speaking of the housing market, although mortgage rates are the lowest they’ve been in years, don’t get swept up in any sales pitch that tries to convince you these offers “are not going to last forever!”

“It is my feeling that the housing market will continue to struggle till around 2016 or so, at which point, we’d be lucky to see modest gains,” said Adam Koos of Libertas Wealth Management.

And unless you plan on committing to a home for 10 years – which would hopefully give the market enough time to bounce back and your home to accrue value – Koos says you’re better off as a renter anyway.

“I think there is a lot be said for renting and being able to walk away from your home without incurring the financial hardships, hassle, and stress that home ownership brings in this kind of market,” he added.

That flexibility is a crucial factor for newlyweds, especially in a topsy-turvy economy where job loss and financial insecurity are very real possibilities.

“Renting absolutely gives you the flexibility that if things in your lifestyle change, you can find a new place,” Bohutinksy says. “Let’s say one of you decides to go back to school and you lose one salary. Renting lets you go with the flow.”

Even so, it doesn’t come without its set of cons. For one thing, you’ll need to have any home improvements approved by a landlord or building manager beforehand, which perhaps one of the biggest draws of being a homeowner. (See 8 crucial tips for accidental landlords.)

Negotiating is a crucial skill to have in this case, Bohutinsky says. Ask your property owner upfront about whether you’re able to plant a garden or they’re against you knocking out a wall for a nursery. (See 9 ways to renovate without ticking your landlord off.)

And after you’ve vetted your new neighbourhood to be sure the neighbours from hell aren’t living next door, your final move should be a phone call to your insurer to sign up for a renter’s policy.

“Agents recommend at least a basic policy to cover what you own – unless, of course, you think it would be no problem to replace it all in case of a disaster,” writes Your Money contributor V. L. Hendrickson of BrickUnderground. “And even if you think your possessions are not that valuable, all those clothes, furniture, electronics, and other personal items can really add up.”

In the end, the true beauty of a rental is that it can be as temporary or long-term as you like, especially as your family grows.

“There are just some things you don’t think about when you’re a newlywed with stars in your eyes,'” Bohutinsky said.

Now see 14 money lies that can wreck your marriage >