For many, renting a home is just a temporary stop on the path to home ownership. It’s the standard argument: Why throw away money on rent that could be used to build home equity?
But these days, the renting narrative is changing. Millennials are not investing in homes like we thought and the housing market is far from “fixed.” The industry leaders advertise a sellers’ market, meaning homeowners can expect to see multiple offers on their homes as the inventory remains low. While that’s great for homeowners, it means home buyers can expect dangerous bidding wars and price increases.
For that reason, many people are putting the American dream of picket fences and front porches on hold and choosing to make one of their smartest decisions to date. It’s a personal decision to rent or buy, but there are many pros to renting your next home rather than buying.
Here are 15 convincing arguments for renting a home — and they’re not all financial.
1. Buying and selling a home is difficult for everyone involved
Selling or buying a home is more stressful than bankruptcy, divorce, and the loss of a loved one, according to one poll. Homes are on the market for an average of four weeks, and 37% of sellers reported reducing the asking price at least once. Plus, if you’re in a long-distance relationship, do yourself a favor and rent. A 12-month lease is a whole lot easier to break or buy out than a 30-year mortgage — nevermind the added stress moving can place on an already suffering relationship.
2. Property taxes can kill you
Many homeowners are unaware of unexpected costs that come with owning a home of your own. Fees, such as property taxes, insurance, and maintenance, add up quickly. For landowners in Hawaii, the property tax on a home worth $179,000 will do little to raise eyebrows, amounting to only $487 annually, according to WalletHub. But those in New Jersey are stuck paying a tax rate of 2.35% that equates to $4,189 annually on a house of the same value. Taxes can fluctuate, but rental terms are consistent across the duration of your lease.
3. You can take time to repair your credit
Irresponsible spending habits in college and those sneaky credit card scams will haunt you for years. Sometimes, it can take more than seven years to fix your credit. If you’re in the bad-credit club, like one-third of the American population, it might be best to rent rather than buy. Those with low credit scores will find buying a home laborious, and it’ll be wise to wipe clean those credit blemishes before jumping onto the buying scene or making any substantial purchases in general. Renting to re-establish a solid payment history can be a good way to bide your time.
4. You’re financially unable
Those with irregular incomes, such as freelancers or small-business owners, prefer renting as a more stable monthly option. Homeowners are at the mercy of Freddie Mac and Fannie Mae — and who knows what their future plans are. Today, mortgage rates are still low, hovering around 4%. But before you think our nation’s real estate woes are over, remember the average 30-year fixed-rate mortgage was under 3.75% in summer 2016. Then, it shot upward after the presidential election and averaged 4.24% in December. If you’re still unsure about your ability to overcome any potentially rocky housing trends, consider renting while establishing a bigger emergency fund.
5. You remain flexible
Buying a home means choosing a location we want to plant roots in for at least a few years. For those who aren’t exactly sold on their current living situation, investing in real estate would be a mistake. Mortgages and other ownership obligations are like concrete shoes — don’t expect to pick up and move anytime soon. When the opportunity comes to accept your dream job on the opposite coast or marital bliss rides on relocating to another city, the last thing you want to do is get bogged down in selling a home.
6. Maintenance issues are not your problem
Flat head or Phillips. Socket verses pipe. If you have no answer, you might want to rent your next dwelling. Not all of us were blessed with the handy gene. Homeowners are often forced to fork over a sizable chunk of their savings to make impromptu and unexpected home repairs. But renters only need to place a call to their property managers when the sink drains are clogged or the dishwasher gets finicky.
7. Upkeep is less expensive
Say goodbye to weekends filled with long afternoon brunches and lazy days at the pool. That large backyard that originally sold you on your property? Well, it needs to be mowed — again. And last week’s storm really did a number on your gutters over the garage. Homeowners don’t have the luxury to bypass time-consuming chores that renters ignore. And renters need not worry about general housework and upkeep required of homeowners.
8. It makes filing taxes harder
If you think taxes are intricate now, wait until you buy a home. Yes, there are some valuable tax breaks homeowners receive, but processing mortgage interest deductions, home repair expenses, and rental income takes considerable time. That’s something renters don’t worry about. In fact, renters are already out socializing care-free, knowing their refund checks are already on their way.
9. There are options for roommates
Roommates are a great option if you’re looking for help shouldering the cost of living expenses. Having someone around to split the cable bill and vent about workplace drama is great, but with homeownership, one person is responsible for the payment at the end of the month. So when that flaky roommate is late on rent, the difference must be made up elsewhere. Apartment complexes, on the other hand, are experienced working with multiple tenants in one location and offer options for individual leases.
10. You have more access to amenities
Yes, you might enjoy the peace and quiet of a home in the country or a friendly neighborhood environment in the ‘burbs, but you’ll miss other amenities. Renting in a community allows you access to things, such as a community pool, fitness center, dog parks, and Wi-Fi. If you still want access to these perks after leaving the comfy confines of rental agreements, you’ll need to shell out serious dough.
11. You can grab cash bonuses
Many rental communities offer additional cash bonuses if you work for local companies. If you’re a local employee, you might be eligible for rental stipends or bonuses just for working close to home. Check to see whether your employer is on the list of nearby companies to max out every discount and money-saving trick in the book.
12. Urban living at a cheaper price
It’s been said millennials prefer city living over driveways and acreage, but they are unable to afford the fees that accompany urban life. Living near universities and vivacious night life is not cheap, and purchasing an Instagram-worthy loft is a merely a pipe dream for some. Depending on where you want to live, trendy areas, such as warehouse or arts districts, major cities, and beach communities, are typically more renter friendly. Finding affordable homes to buy might require moving into less popular areas.
13. There’s better security
Gated communities come at a high price, but most rental complexes have security features already included in their agreements. This is a welcomed benefit for women, single renters, or tenants living in urban environments. Homeowners will find neighborhoods with these extra precautions come at a price.
14. You remain adverse to risk
Financial advisers might say we must “risk it to get the biscuit,” but that’s easier said than done in a housing market that’s seen so much variation lately. Therefore, many are choosing the safer option to rent rather than investing in real estate. In addition to affordable prices, renters are also adverse to potentially debilitating changes in the housing market. Although experts are showing a recovery, a better, more accurate description is stabilizing. Words, such as “foreclosure” and “mortgage rates,” are still often paired with phrases of uncertainty. And that’s worrisome to fiscally conservative Americans.
15. You have the ability to invest elsewhere
It’s recommended home buyers put 20% down on a home to avoid being house poor. Even when considering upfront rental fees and deposits, it’s still cheaper than the tens of thousands of dollars it takes to buy a home. Some renters might already have potential savings stacked away for this very purpose, but with other uncertainties and future questions, it might be best to invest that money elsewhere. A few grand could do wonders for your future retirement or help hack away at those student loans that still burden you.
For more information on apartments in Lexington Park, MD, contact Abberly Crest.