One of the major life goals people tend to have included things like getting married, getting a great job, and even buying a house to live in. Buying a house is typically one of the indicators that you’ve “made it!’” and that’s a great feeling. However, this may not be the case for everyone. Sometimes the cost of buying may just be too much. So, while your own home with a white picket fence may still be a dream and is definitely still on the table, here are our 10 reasons why renting may just be better!
1. You don’t have to worry about maintenance.
One of the big advantages that renting has over homeownership is that when you rent, you don’t have to pay for maintenance or repairs. When renting, it’s the landlord’s responsibility to pay for those things. Throw some renter’s insurance in, and you’re as financially secure as you can be. If they offer specialty repairs or 24-hour maintenance, you’re getting a great service you may not have been able to afford otherwise. A burst pipe or a broken heater is much easier to deal with when you’re not the one paying!
2. You’re not stuck.
When you buy a home, you’re typically going to be locked into a mortgage and will have to pay on it until it’s paid off. This can take years which means you’re most likely going to be stuck there for years. Most rental properties have a yearly lease to re-up or have a month to month payments. If anything unexpected happens to you that would require you to move, it’s going to be much easier to do so from a rental.
3. Extra amenities.
Another benefit of renting is the extra amenities that some places offer. A lot of standard apartment complexes nowadays have amenities on their properties for tenants to use freely. These things include pools, gyms, rec rooms, etc. In order to get that in your home or even to use independently, it’s going to cost you a pretty penny. Also, some places offer extra amenities for tenants like smart home technology. These can give you extra convenience or comfort for free you’d have to purchase if you didn’t live there.
4. No property tax.
Along with not worrying about maintenance and repair costs, another thing renters don’t have to worry about is property taxes. These taxes can add a lot of unwanted stress and a lot more of your paycheck to be a homeowner. Landlords pay for their buildings and that includes any property tax on them.
5. No HUGE down payment.
Another striking cost to owning a home is having a ginormous down payment and closing costs, in most cases 20% of the house’s price. Toss this one on the ever-increasing stack of costs incurred. Renting can save you a large sum of money up front, usually only needing a security deposit and maybe a last month’s rent. A rental property is much easier to pay down and manage.
6. Property value is not a concern.
For you. Of course, it would to the landlord if they were thinking of selling or attracting more tenants. Since you don’t own the building you’re renting, property value most likely won’t affect your decision making. This is another matter that the owners must concern themselves with that you don’t have to deal with. This can relieve some stress on your end.
7. Fixed rent.
While your landlord may be able to change rent costs after a lease is up, you will always know exactly what you’re paying each month. Locking in rent on a lease is very stable, much more stable than the ever-changing costs of owning a home where anything from taxes to the market determines what you’re going to be paying each month (on top of your monthly mortgage payment). Having a fixed rent will allow you to budget more easily and spend more confidently because you know exactly what you need to pay to live.
8. Much lower utility costs.
A huge selling point for some rental properties is “utilities included”. When a rental property will pay for one or more of your utilities, that’s an entire bill you now get to keep. Also, apartments typically being smaller than houses, it costs much less to fully heat, cool, or light up a rental. This means saving on utilities each month.
9. Less debt.
The fact is, to buy a house, you’re going to have to pay full price. And home prices love to fluctuate. This usually means a loan from a bank. Then you’ll be paying it off for the next stated amount of time. Renting is not set up in the same way. Instead of having a large down payment and the rest paid off as debt over years plus the interest rates, renting is always the same rate until the end of a lease which is considerably shorter than a mortgage. You’ll be paying every single month but you probably won’t need a loan to rent a place.
10. Do more.
With all the money you can save, lack of debt, and general freedom to move when you want, you can simply do more while renting. I wouldn’t say a house is a dead weight keeping you from doing things, but I’d say it’s more of an anchor that will probably keep you in place for a while. You don’t get the same flexibility from owning a house as you do from renting. Overall it comes down to preference.
In conclusion, you shouldn’t discount homeownership completely, but when broken down, the cost of renting is more strategic in the shorter term and sometimes even long term. If there’s a chance you’ll want to move, travel, or even get a new job in the next 4 years, it may be in your best interest to rent instead of own. Your wallet and your adventurous side will thank you for it. Happy renting!