I cannot tell you how many times I’ve heard someone say, “Renting is just throwing your money away.” As a young professional fresh out of college or as a middle aged person looking to downsize, that sentence can be very frustrating. There are many reasons that a person may not be able to buy a home and many reasons a person may not want to buy a home. So, let’s ponder the question, “When is renting better than buying?” After doing some research, here are some of the interesting things that I discovered about the pros of renting versus buying.
- There is no big downpayment on a rental property. When buying a house, it is not uncommon to be asked for up to 20% down. Not only is that huge, but takes years of budgeting and self-discipline to save that kind of money. When renting, a security deposit and the first month’s rent are usually all that is expected. This is a great help in getting into a rental home rather quickly.
- You can live in trendy and more highly sought after areas. Often people try to buy a home in the hottest, most trending area of town. Instead, find that they cannot afford it; settling for a smaller house and less than ideal home just to be near their favorite area. Renting can be the more affordable option that provides you with the freedom to live right in the area you love, without having to settle for less.
- You may have access to more amenities. Most rental communities come with some amazing amenities to draw renters in. Often, renters have access to swimming pools, fitness centers, dog parks, playgrounds, event rooms, laundry centers, business centers, wi-fi and more. Amenities provide the renter more for their money in rent, ridding them from costly memberships and extra gas guzzling.
- You have no maintenance costs or repair bills. The property owner is solely responsible for all maintenance costs and repairs. Renters, rejoice! You do not have to save up massive amounts of money for that new roof or to fix the air conditioning! You put in a call to the property owner and the repairs get taken care of without emptying your bank account.
- You don’t pay real estate/property taxes. The property owners are responsible for all the taxes on the property. They have accounted for that fact when setting the rental price, but the main point is that you, the renter, don’t have to set aside your own money each year to pay property tax. That is the property owner’s issue. Consider it money saved.
- You will pay less in renters insurance than homeowners insurance. According to the National Association of Insurance Commissioners, “the average renters insurance policy costs between $15 and $30 per month.” Homeowners insurance is closer to $80 per month. This difference in insurance costs is definitely money you can save or put towards other investments.
- You will have freedom to upsize or downsize in your own time frame. Another great thing about renting is that renters have the option to pick up and move more easily than homeowners. When a lease is up, renters are free to move as they see fit. If a renter gets a job offer in another state, it is much easier to end a lease (or live out the end of a lease) before moving than it is to sell a house. If a renter does not like their neighbors, they can wait for the end of their lease and move. If the rent gets too high, renters can downsize or seek a new place to rent. If the family grows, renters can upsize much more easily than someone who needs to sell a current home before they can make a move. Renting brings much more freedom to people who like to follow their dream, change scenery often, or find themselves needing more or less space.
- You will have less stress and more leisure time. While the homeowners around you are scrimping and saving for taxes, insurance, and home repairs, the renters are walking around with none of that stress. While homeowners are cutting their grass, pressure washing the house, and staining the deck, renters are enjoying leisure activities. While homeowners are dealing with noisy, nosey, or shady neighbors, renters are counting down the months left in their lease until they can move away from pesky neighbors. Having less stress and more leisure time provides some great health benefits for renters and is definitely worth considering when making the decision to rent.
If you are trying to decide whether to rent or buy, consider the above benefits before making a 30 year commitment to homeownership. There may be a time in life when you do take on the challenge and privilege of a home, but until that time is right, renting is a fantastic option. Carefully consider your needs, your family and your financial situation to make the decision that is best for you! Never let the pressures or opinions of others keep you from making the best choice for your situation. If you need further advice, the professionals at Rent Holy City will be happy to serve you!