When you think about celebrities, you immediately tie them to the houses (more like estates) they buy:
Michael Jackson bought Neverland, his 2,400-acre estate in California.
Jon & Kate (Plus 8) are now living separately, but she and the kids are primarily living on their 24-acre playland with plenty of room for Jon’s ATV habit.
Hugh Hefner still lives with his girlfriends at the Playboy Mansion (which he just lent to former girlfriend Kendra for her nuptuals).
Elvis Presley lived at, died in, and was buried at Graceland.
But in addition to owning a fortress (or theme park) somewhere, celebrities like Michael Jackson and Angelina Jolie increasingly rent houses instead of buying homes. Why? Renting a house:
1. Gives celebrities like MIchael Jackson greater control over their finances. When you rent a house, you typically only have a flat monthly fee that you’ll pay the landlord. The landlord takes care of all other costs of homeownership, including rising property taxes and maintenance expenses. Renting gives you greater control over your finances, something celebrities value. Also, if you’re unsure of where your next dollar is coming from – not Michael Jackson’s problem, but one faced by many Hollywood actors, writers and producers – renting allows you to spend more or less depending on your cash flow.
2. Can provide a celebrity like Angelina Jolie more house for the money. Want to live in a castle? Not sure if you’ll like it? You can rent a castle in France or Scotland less expensively than you can buy one, as owners of these palatial residences desperately search for ways to bring in revenue to offset increasing costs. These days, you can rent many premium homes and estates for far less than the cost of owning them.
3. Provides celebrities who travel the world much-needed flexibility. Of course, if you’re a well-traveled celebrity like Michael Jackson or Angelina Jolie, you’re not spending that much time in one place anyway. Michael Jackson spent several years living in the mid-east, in the aftermath of his well-publicized child molestation trial. He moved back to the U.S. but didn’t want to move back to Neverland, so he rented a home in a well-protected area near Los Angeles. Angelina Jolie, Brad Pitt, and their ever-growing brood need big estates in locations all over the world, as they travel to accomodate their movie schedule. Renting houses provides them with the flexibilty they need.
4. Can be more secure than owning. Remember when Britney Spears cut off her hair? If you’re a celebrity, the last thing you want is a paparazzi mob scene at the bottom of your driveway. Renting allows you to change locations frequently, when the pressure of celebrity gets a little too hot. You can also try out properties that are in gated communities, to see if that affords you more security.
5. Can be abandoned more easily and with minimal damage or fuss. Celebrity rentals are often short-term, where the occupants rent from month-to-month rather than signing a 2-year lease. If you’re Angelina Jolie and you decide to leave your rental unit a month early, the cost is negligible compared with the time and expense of trying to sell an expensive home in a tough market.
If you’re trying to decide whether to rent or buy, you should consider these factors as well. Renting is the perfect opportunity to test out a neighborhood as well as help you live more cheaply than if you buy a home. If you don’t know where you want to live, and you don’t know how secure your job will be over the next few years, renting is probably a smarter choice than buying a home.
Ready to buy a home? Pick up a copy of Ilyce’s bestselling book 100 Questions Every First-Time Home Buyer Should Ask, 3rd Ed