Consider your buying timeline to decide.
- 2022 was a terrible year to be an aspiring home buyer, and there’s no guarantee that 2023 will be any better.
- If you’re going to be staying in your rental for a while, you should consider making the kind of changes that will make it a more comfortable home for you.
- Note that you could lose your security deposit if you can’t return your rental to the same state it was in when you arrived.
If you’ve been renting for a while and are hoping to eventually buy a home of your own, you might be feeling some despair about the state of the housing market. The supply of homes remains low, prices are up across the board, and to add insult to injury, interest rates climbed over the course of 2022. Even if you can find a home in your price range and get your offer accepted, you’ll be paying much more for a mortgage.
If you’re resigned to waiting out the market, and plan to keep putting money aside for a down payment, I get it. I’m in the same boat. While I originally had hopes to buy in 2023, I had a good hard look at my finances and decided that for the sake of them, it’s better to wait until 2024 or beyond. So I decided to renovate my rental in the time being.
Here’s what I did
I started meeting with a financial planner in early 2022, and his advice was the splash of cold water I needed to rethink my 2023 home-buying plans. I pay less in rent than I will for a mortgage payment, and when I renewed my lease for a second year, my landlord didn’t raise my rent (I do anticipate a bump when I renew for the third year, however). So it makes a lot of financial sense for me to stay here and do what I can to make it comfortable.
I took down the glass shower doors (and instead hung a custom shower curtain that I painted myself), bought a large tapestry sized to fit my bedroom wall, and I hung up a lot of wall art. I did make a more permanent change to my home office, however.
Most of my apartment’s walls have dark wood paneling. This is easily one of the worst things about being a renter — I never would have bought a home with wood paneling, but renters often can’t be choosers, at least not at my price point or in my city of old rental homes. So I painted over the wood paneling in one of the spare bedrooms.
It immediately transformed the space, and along with purchases I made in 2022, changing the room this way significantly improved my work and home life. Having a beautiful space to work from can make you more productive and therefore more financially successful. Should you take the plunge on renovating your rental, too? Let’s consider some pros and cons.
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Pros to renovating as a renter
Making your living space more comfortable can be a serious win for your mental health, and this affects absolutely every other part of your life. It’s easy for renters to feel as if we’ll never truly have a real home — I’m familiar with this feeling, as I’ve moved 10 times in just the last 10 years. And if homeownership is feeling out of reach for you due to the costs, personalizing a rental might be the shot you get to feel at home.
If homeownership is a possibility but you need more time to save money, improve your credit, or otherwise prepare, making some changes to your rental can make waiting less of a hardship. This is especially true if you don’t pay a lot in rent and can swing the expenses of fixes like new kitchen cabinet hardware, painting, custom furniture, or even a new large appliance (to replace the too-small refrigerator or ancient stove in your rental). However, there could be some drawbacks to renovating.
Cons to renovating as a renter
It’s written into many lease agreements that tenants must leave a home or apartment the way they found it, and if you made a lot of permanent or semi-permanent changes, that could present a hardship. Say you hung peel-and-stick wallpaper in your bedroom and are now moving out. You’ll either have to remove it, or throw yourself on the mercy of your landlord.
If you made the space friendlier and more appealing to future tenants, you may not lose your security deposit, but this will of course depend on your landlord. And if you bought a piece of furniture custom-sized to your rental’s living room, it may not fit in the living room of your next home, whether that’s a house you’re buying or yet another rental. So you could be forced to sell it at a loss on what you paid for it.
Should you renovate?
No one can answer this question but you, but I personally am in favor of doing what you can to make a rental more of a home in this most difficult of housing markets. Consider your timeline to decide whether to nest in your rental. Did you just sign a new lease with intent to stay a good long while? It might be a good move to renovate, especially if you spend a lot of time at home (say, if you’re a remote worker). But if your lease is expiring in a few months, and you’ve managed to get an offer on a home accepted, you have likely missed the boat on renovating, and should save that money and creative energy for your new home, you lucky duck.