Most times, people are sold on the benefits of owning a home, but they are rarely told about the merits of renting. So many people have a hard time determining which option is preferable, and it can become a complex problem to have; however, it’s an understandable one. Buying a home or renting one has its merits and demerits, and regardless of the choice you make, it’s important to consider these factors when making the final decision.
Homeownership and renting are big financial engagements, so it is crucial to make an informed decision that carefully evaluates the areas in which renting beats home ownership and vice versa. Moreover, decisions shouldn’t be based on desire alone; they should be rooted in sound financial literacy that incorporates the reality of the economic climate, especially one that involves home ownership. With rising inflation, increasing interest rates on
mortgages, and the exorbitant cost of new construction in real estate, renting is a wiser financial undertaking to take or consider.
Here are seven reasons why you should consider renting a home vs.
buying a house.
The cost of renting a home is less expensive
Security deposits, non-refundable application fees, moving costs, first and last month’s rent, and appliances are some of the costs(upfront, recurring and hidden) associated with renting a home. 64% of prospective renters pay a non-refundable application fee, and 87% of
renters pay security deposits; these are some of the financial hurdles renters have to overcome. However, these financial commitments are no match for a down payment or closing costs. Additionally, there are cases where your monthly rent may be higher than a monthly mortgage; the advantage you have is that you don’t need to worry about paying for home repairs or fronting for things like property taxes.
Renting is less risky
The decision to buy a home is a consideration to invest in, and like anything investible risks are associated with it. On the other hand, when you rent, you are not bothered about inflation, a possible market crash, or high-interest rates on mortgages. The biggest risk associated with renting would be the suitability of the place you rented or whether you’ll be happy with the choice you made. In most cases, this is a risk most people are willing to take.
Renting is much more flexible
Flexibility is one of the greatest benefits of renting.
Renting gives you the freedom to choose where you would want to live. If you ever feel like you’ve had enough of a particular place, it’s a lot easier to break a lease, and move across the country than it is to sell a house. Just in case you don’t cut out early, a big advantage of renting is that it sets defined terms that allow you to base big decisions around. It is a lot easier to end up with regret that stems from a decision made over a location or a living situation and put up with it for a year. This is definitely better than the regret that comes from buying a house you wish you didn’t buy.
Less Worries about Repairs on a Rental Property
When you rent a house, you worry less about repairs because it is someone else’s problem, Guess who? the landlords. Plumbing issues, electrical problems, a broken dishwasher, or a warped window trim, renters do not need to worry about these repairs and the associated costs. It is the property owner or the property manager’s responsibility to resolve these issues. There are lease agreements that require renters to bear the costs of repairs caused by the damages made by renters; however, if you treat the property with care, this shouldn’t be an issue. Who would not want to relinquish the responsibility of handling repairs by simply calling their landlord or property manager? It is a lot less painful to call your landlord or property manager and place a maintenance request than it is to pay for the repairs.
You don’t have to deal with property Taxes
When you are renting, you have no obligation to pay property taxes on a rental apartment or unit. Contrary to renting, home ownership comes with a major expense of property taxes; this expense can a huge deterrent to potential home buyers, given that it can put an affordable home out of a buyer’s purchasing power. Some states have very high property taxes, and when you think of how much money that will gulp from your finances, renting becomes a safer option to explore and consider.
Don’t Sweat the Little Things
As a renter, there are a few things you might worry about that require time and effort to handle. These things might range from yellowing grass to chipping paint which will need your attention, but in no way comparable to the big responsibilities you’d have to deal with as a homeowner. When you’re renting, you wouldn’t need to lose sleep over things you probably might not notice most of the time. Homeownership comes with huge responsibilities that can be time-consuming and financially demanding. If you derive great pleasure in hanging out with friends on weekends instead of decluttering the gutter or climbing up a ladder, rest assured renting is a preferable option for you.
Utilities
One of the advantages of renting is that you might end up not having to pay for utility costs. Some property management companies and landlords offer benefits like free water, heat, internet, and more. Just in case some utilities weren’t included in your rent, the associated costs will still be cheaper than buying a home. The reason is that many rental units have less square footage than
single-family homes.
Bottom line
Ultimately, the decision of renting vs homeownership is dependent on factors like affordability and the level of responsibility you would want to have when it comes to your home. Renting offers you a level of flexibility that is in no way comparable to the option of homeownership. Making a decision to rent or buy a home isn’t a bad idea, what’s important is arriving at a decision that makes you happy and falls within your budget.
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