Renting can be smart money management

On the list of "must-do" things in order to be considered a "real" adult are marriage, home, and children. All of which cost a lot of money. My focus today is on owning a home, which seems to be one important measure of whether or not you've "made it" or "grown up." It's just the socially acceptable thing to do. Buy a home and prove you're an adult.

Yet it can make a lot of sense to rent an apartment. Especially during turbulent times in the real estate market. But even if we were still in the housing bubble, renting would make sense for plenty of people. Here's why...

With home ownership, you theoretically are better off because you're building equity, so all the money you're paying to be in that home theoretically leaves you owning something in the end. Yet the cost of ownership is very expensive when you figure in mortgage payments, mortgage insurance, property taxes, association dues (if you have them), repairs, property insurance, and general upkeep. And some people aren't even building any equity because they went into "interest only" mortgages or otherwise bought houses which they can't afford.

It also takes a fair amount of cash just to get into a house. When you figure in the down payment and the closing costs, there is a lot of money paid up front to live in a house. And that can be painful on the pocketbook. All in all, plenty of homeowners find out quickly that the cost to own is much higher than they planned.