Renting comes with a lot of under-talked-about benefits; probably because we are always hearing the constant chatter of financial experts telling you it’s the right time to buy.
As a result, buying a home should be a carefully considered decision, with all the pros and cons of both buying and renting evaluated against your own priorities and finances. Don’t get pressured into something that won’t work for you!
The benefits of renting include:
Financial flexibility. Think of a ocean liner and a speedboat. The first represents your mortgage, the second is your lease agreement. If you get into financial trouble and need to reduce your living expenses, it’s much easier to make changes to your life if you rent.
Financial stability. A renter’s finances are very predictable. There are few “unexpected expenses,” like an appliance breaking or a roof leaking that you’ll need to take care of on your own. There’s also less risk of uncovering an unforeseen problem (think “termites” or “airport corridor”) because you can just move.
Career flexibility. As many unemployed home owners will attest to these days, when you rent you’re not locked into your location if the job market or economy shift, or your career preferences change.
Low maintenance costs. If nearly anything inside or outside your house breaks, it’s your landlord’s responsibility to fix it. That includes the cost, but also the time required. It’s also their responsibility to maintain the yard, paint, keep up common areas, etc.
No market risk. When you buy a home, you take on the risk (and potential reward) of the home’s value changing. This puts the capital you “invested” in your home via the down payment and subsequent mortgage payments at risk, and influences your ability to change course.
You don’t pay taxes or insurance directly. Your landlord is still asked to pay property taxes and insurance, and presumably rolls that into your rental price, but you’ll never be asked to write a check for these on your own, or get hit with a surprise bill if they increase abruptly.
No cash outlay required. There’s a tremendous amount of money required to close on a house, including the down payment and closing costs. Many people feel like it’s money they’ll never see again (if they sell the house, it will roll into the next one they buy). When you rent, no one will ever ask you for $20K out of pocket.
Some bills are included in the rental price. Many communities include things like water, trash collection, and even cable in their base rent price. While it’s probably priced into the rent, it still saves time every month not having to deal with extra bills.
Communities often offer “bonuses” for moving in. What was the last time you got a “bonus” for buying a house? It’s not unheard of to get a month of free rent or bonus amenities just for moving into a rental.
Decreased stress. Owning a home leads to greater stress as you have to deal with your home’s problems.
You can’t be foreclosed on. You will be kicked out when you don’t pay your rent, but in the grand scheme of things, that’s probably a better alternative to the fairly damaging process of foreclosure.
Less area to clean. Most people who move into a home will upgrade the size of their living space, not the other way around. There’s also the new 2-car garage, and the front and back yards. You’re going to spend a lot more time cleaning, my friends.
You can change your neighbors. A large factor in the quality of life as a renter is the kinds of neighbors you have. The good thing is that neighbors move, and when they don’t–you can. Would you move out of the house you bought because of bad neighbors? That’s a much tougher decision.