More households in the country are renting than at any point in the past 50 years. In 2016, the number of renters rose to 36.6%.
On the fence between renting and buying a house? Don’t make a rash decision without a little research first. Keep reading to discover the seven benefits of renting over buying.
After reading this guide, you won’t have to ask yourself, “Should I rent a house?” anymore. Instead, the benefits will speak for themselves.
Discover the many benefits of renting over buying in 2020 with these tips.
1. No Maintenance or Repair Costs
Imagine buying a new home only to realize it requires thousands in maintenance and repairs costs. Chances are you won’t have time to make all of those repairs, work every day, and get some much-needed sleep. One of the top benefits of renting over buying is that you won’t have to deal with the repairs yourself.
When you rent a property, your landlord is the one responsible for repairs, ongoing maintenance, and improvements to the home. If the roof starts leaking, call your landlord. They’re held accountable for fixing it.
If an appliance such as the refrigerator stops working, it’s the landlord’s job to replace it.
As a homeowner, on the other hand, you’re on the line for all repairs, maintenance, and renovations to the cost. Those costs can stack up quickly, especially if you have a mortgage on top of everything else.
Choosing to rent instead of buying a house can help you avoid stressful, costly fixes you don’t want to deal with.
Consider speaking with a property management team to learn more.
2. Amenities Access
As a homebuyer, amenities can become an enormous expense. You’ll need to pay for luxuries such as an in-ground pool or fitness center. As a renter, however, you might have access to these amenities without any additional cost.
Many mid-scale to upscale apartment complexes provide these amenities to no extra charge to the tenant. Homeowners, on the other hand, have to deal with thousands in costs to install and maintain these amenities themselves.
If you’re asking yourself “should I rent a house?” consider the amenities you want access to. See if there’s a community that will provide you access to these amenities for free. That way, you have all the luxury without the additional expense.
3. No Property Taxes
If you’re unsure about renting or buying a house, try thinking long-term. One of the great benefits of renting instead of owning is that renters don’t pay property taxes.
Real estate taxes vary by county. For some new homeowners, they can become a major expense. Property taxes can add up to thousands of dollars every year on top of the fees you’re already paying.
Trying to calculate your property tax can feel confusing. It’s usually determined based on the estimated property value of your home, as well as the amount of land you own. As more new, larger homes are built, property taxes can become a significant financial burden.
Take one more cost off your plate! By renting over buying, you won’t have to deal with property taxes on top of everything else.
4. No Down Payment
Renters also have a better deal when it comes to upfront costs. You might need to pay a security deposit equal to one month’s rent. Despite this cost, that’s a lot better than having to purchase a home and a mortgage, which can require a down payment of 20%.
The exact amount you’ll need to pay as a renter will vary on a case by case basis. Either way, the total amount is usually a lot less than the down payment you’ll need to buy a house.
If you don’t have enough savings for a down payment, renting is the way to go.
The majority of people choosing to rent instead of buy are millennials ages 35 and younger. In 2016, 65% of households headed by young adults were renting. This is likely because younger adults lack the savings necessary to make a down payment on a new home.
Homeowners are usually restricted to certain areas and homes based on the options available. If you plan on renting, however, you’ll find there are a lot more options available even in a smaller location radius.
Homeowners are also restricted to areas where they can afford to buy. A renter, on the other hand, can find affordable monthly payments a lot easier.
Choosing to rent over buying can give you the flexibility to downsize, too. In today’s economy, many people are forced to live paycheck to paycheck. By renting, you can downgrade into a more affordable living space at the end of your lease.
This flexibility is often beneficial for retirees who want a less costly option for their monthly budget.
As a homeowner, however, it’s more difficult to break free from an expensive house. There are fees involved with buying and selling a home that you’ll have to consider. It’s not nearly as easy to downsize if you’re living in a home.
6. Fixed Rent Amount
As a renter, your rent amount is fixed for the duration of your lease agreement. Landlords can raise the price of your rent, but they’ll need to give you notice. That notice can help you budget more efficiently.
With a mortgage, however, adjustable rates often fluctuate and property taxes can rise.
Renting over buying will provide more stability, especially if you’re on a budget.
7. Lower Insurance Costs
Homeowners are expected to maintain a homeowner’s insurance policy. Renters, on the other hand, need renter’s insurance. Renter’s insurance is usually cheaper and covers everything you own.
If you’re trying to decide between renting or buying a house, make sure to calculate your insurance cost among the fees mentioned above. Having a better estimate of the overall costs will help as you’re making the decision. Otherwise, you might not realize how expensive it really is to own a home until it’s too late.
Should I Rent a House?: 7 Reasons Why Renting Beats Buying
Still asking yourself, “Should I rent a house?” Take a look at your budget. By renting instead of buying, you can avoid numerous costs from stacking up and breaking the bank.
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