Deciding if you want to buy a home or just settle on renting can be one of the biggest decisions you have to make.
The situation can also rely heavily on your finances. Both living options have their own benefits and setbacks. The heavily publicized American dream is to own a house and live happy and balanced life, but that can be a problem if you don’t have the money for such a big investment.
More recently the American dream has been changing as people are delaying getting a mortgage and choosing to rent long-term. Here are 5 benefits of renting over buying.
Renting is More Flexible
Buying a home is a long-term investment that can possibly make you feel stuck is a life changing event occurs. If a new job offer comes up that’s 300 miles away it would be a lot tougher to just pick up and move if you own a home.
If you rent, the option to sublease and even with a regular lease, you do not have to be stuck living in your home for several years. Some rentals (specifically apartments) even go month by month after the first 12 months which could also be great if you have to move in a hurry.
Less Utilities
Renting puts less pressure on you when it comes to paying utilities since most of them are paid by your landlord. While heat and air conditioning may not be covered by your landlord, other utilities like water, gas, and garbage may be covered which can save you money.
Some apartments even include basic cable in the price of rent. If you rent an apartment, it will also cost less to heat and cool your home than it would with a house. Having to pay for every single bill yourself can put a lot of pressure on you financially if you aren’t prepared.
No Large Monthly Mortgage Payments
In some cases, buying may seem cheaper than renting. This is as long as you purchase a house that is not costly to maintain and put a large down payment down. If you don’t put at least 20% down on your home, you will be required to pay private mortgage insurance which will increase your mortgage payments and you won’t have much equity in your home to start.
Having a large monthly mortgage and housing expenses that exceed 30% of your income can result in making you house poor. This can lead to other financial setbacks like not having enough leftover money to save or pay off debt each month.
Maintenance and Repairs
When you rent, most maintenance and repairs will be the landlord’s responsibility. As long as you take care of the property, you shouldn’t have to spend any money in this area. Even if you do happen to break something, if you submitted a security deposit when you first moved in, that money can go toward and repairs or equipment needed to fix things around the house.
Another benefit of renting is not having to worry about outdoor maintenance like lawn care, snow removal, etc. The landlord will usually hire someone to do these jobs as well so you won’t have to. When you own a home however, all of these tasks and expenses will fall to you. Even if you do hire someone to help with maintaining your property, you’ll still spend quite a bit of money even though it may save you time.
Some communities have homeowner’s association fees that you have to pay each month for various expenses related to keeping the overall community clean and maintained.
Some people believe buying is much cheaper than renting, but when you add up all the expenses in addition to the mortgage, that statement is hard to believe. If buying a house is your ultimate goal, it’s still well worth it if you’d like a property of your own to build equity in and do as you please, it’s just important that you are financially prepared to take on the responsibility.
Have you decided what is a better route to go? What are some additional benefits or disadvantages of owning over renting a home?
Chonce is a freelance writer who’s obsessed with frugality and passionate about helping others increase their savings rate, eliminate debt, and work toward financial stability. She chronicles her journey to becoming debt-free on her blog, mydebtepiphany.com.
