Renting a property can be better than buying one for many reasons, including the fact that renting allows you to live in the desired area without having to make a long-term commitment. This is especially beneficial if you are not sure where you want to settle down or how long your stay will be.
Another reason why it might be better to rent rather than buy is that it gives you more flexibility when it comes to changing jobs and relocating. For instance, if someone wants to go back to school or change careers they may find themselves moving from city A to city B several times throughout their life span.
Renting could allow them this freedom as opposed to being locked into a mortgage which would have been difficult if they had wanted to relocate every few years.
You Don’t Have To Worry About Maintenance
One of the major benefits of renting versus owning a property is that you do not have to pay for upkeep or repairs. It is the landlord’s obligation to pay for such items while renting.
Add in some renter’s insurance, and you’re as safe as you can be financially. You’re receiving a terrific service that you would not have been able to afford otherwise if they provide specialized repairs or 24-hour maintenance.
When you’re not the one paying for a busted pipe or a broken heater, it’s a lot simpler to cope with!
No Property Tax
Besides not having to worry about upkeep and repairs, renters also don’t have to bother about property taxes.
As a homeowner, these taxes may add a lot of unnecessary worries and eat up a lot more of your money. Landlords are responsible for their buildings, including any property taxes.
No Down Payment
One instance where renters benefit financially is in the initial expense. Generally, renters are required to pay the
security deposit equivalent of one month’s rent. That is often all. This money is supposedly refunded to them when they leave the rental property, providing they have not caused damage.
While buying a house with a mortgage, a substantial down payment is required typically approximately 20% of the property’s worth. Naturally, that down payment leads to equity in the house, which grows as the mortgage is paid off gradually. Additionally, if you buy a property outright, you have a valuable investment that renters never have.
Property Value Is Not a Concern
Property values fluctuate. While this may have a significant impact on homeowners, it has a much smaller, if any, effect on renters. The value of your house may have an effect on the amount of property taxes you pay and the size of your mortgage. Renters may not be as negatively impacted as homeowners in a shaky property market.
Lower Utility Costs
Utilities are a significant selling element for certain rental units. When a rental property pays for one or more of your utilities, you get to retain the whole amount. Additionally, since apartments are generally smaller than homes, it costs far less to heat, cool, or light a rental. This results in monthly utility savings.
Conclusion: If you’re considering buying a property in an area where prices are on the rise, it may be worth looking into renting instead. The best way to figure out if this is better for you is by crunching some numbers and comparing your monthly rent payments with what your mortgage payment would be over 30 years (or whatever term of financing) at today’s interest rates.
You can also think about how much equity that money could generate in the long term.
We know there are pros and cons when deciding whether to buy a house, but one thing we do know for sure is that housing costs will only continue to climb so being proactive now might save you from making an expensive decision down the road.