Many people feel overwhelmed when deciding whether to go the homeownership or the renting route, especially with the rising costs of homes. Renting a house can offer many benefits over buying, such as flexibility, savings on maintenance and repairs, and protection against decreasing property values.
It can provide an excellent option for those looking for a place to call home without the long-term commitment and financial burden of owning a home.
This article will explore why renting a house may be your better choice. Here are seven advantages of renting a house over buying one.
No Maintenance Costs
One of the key benefits of renting a house is eliminating maintenance and repair costs.
If the toilet breaks or the roof starts leaking, you don’t have to worry about dipping into your emergency fund for the repairs unless you were directly responsible for them.
When renting, you simply have to call your landlord or property management firm and have them call a maintenance specialist out of their pocket. When you rent your house, you’re no longer responsible for the maintenance and home improvements. You can look out for reputed companies like Nashville rental houses for awesome rental deals.
No Real Estate Taxes
Property taxes can be a significant cost for homeowners. In New Jersey, the property tax is 2.26%, meaning a $250,000 home would cost you $5650 in property taxes per year.
While this is on the higher end, property taxes can burden homeowners substantially.
As a renter, you do not have to pay property taxes which can increase over time.
Instead, the landlord or property owner is responsible for paying them. This can free up more money in your budget for other expenses, such as saving for retirement or paying off debt.
It Doesn’t Require a Down Payment
When you purchase a home, you typically need to put down a significant amount of money as a down payment.
This can be anywhere from 3% to 20% of the home’s buying price, depending on the type of loan and the lender’s requirements. For a $300,000 home, you have to put forward a down payment of $60,000 to $120,000.
For many people, coming up with such a large sum of money can take time and effort, especially if they are also trying to save for other expenses such as retirement or their children’s education.
Renting doesn’t require that typical timeframe of saving. With a simple security deposit and the first month’s rent, you can be well on your way to moving into your new home.
Costs Are Lower – Renters Insurance, No HOA Fees
Another added advantage of renting over buying is not having to worry about the homeowners association fees and homeowners insurance.
You may be required to pay HOA fees when you purchase a home in a neighborhood or condominium complex. These fees typically cover the cost of maintaining common areas such as swimming pools, tennis courts, and landscaping.
According to Realtor.com, typical HOA fees can run up to $300 every month, depending on the community and services. This can quickly end up being a significant expense. As a renter, you do not have to pay HOA fees. The owner of the house foots this expense.
Additionally, you will only be paying a fraction of the price for the house insurance policy. Homeowners are required to purchase homeowners insurance upon purchase. This can be costly compared to renters insurance which can, at times, be half of what homeowners pay.
You Don’t Have To Worry About Decreasing Property Values
When you purchase a home, you expect the house to go up in value. This doesn’t always end up being the case. The value of homes can increase and decrease due to several factors.
This can leave you with significant financial losses.
As a renter, you’re not at risk of experiencing financial loss if the property’s value decreases. You are only responsible for paying rent each month. This can provide a level of financial security and protection against potential losses.
Renting a home affords you the flexibility that most homeowners don’t have. It allows you to try out different neighborhoods or housing options without committing to a permanent home.
While the costs of buying a house in San Francisco might be out of reach for most homeowners, it’s “easier” for renters to get an apartment.
With renting, if a particular issue arises, i.e., the neighborhood is no longer to your liking, you can break the lease and move to a new area without the hassle of selling the house.
The Rent Is Fixed for the Term of the Lease
An additional bonus of renting over buying is the fixed rent. This can allow you to budget more efficiently. Homeownership relies on the terms of your mortgage rates. Interest rates may go up at a moment’s notice, leaving you scrambling to make the payments and breaking your budget.
While renting, you set a locked price for the specified time of your lease, and even if your landlord decides to raise the rent, you can always move to another apartment.
Renting a house can be an excellent option for those who are looking for a place to call home without the long-term commitment and financial burden of owning a home and those who are not ready for the responsibilities that come with homeownership.
While there’s no denying that you will be giving up certain luxuries, what you gain in return is incomparable.