For those people who are not quite ready to purchase a home, renting is a very viable option compared to buying. Renters can save on many expenses such as taxes, insurance, and maintenance which homeowners have to take into consideration. While buying a home can involve a lot of saving and commitment, renting will help you maintain a more flexible lifestyle. Here are a few reasons why renting may be a better option for you:
- Renting helps you avoid large unexpected expenses
- Flexibility if there is a job change
- Less upkeep, especially if in a condo
With renting, you are not responsible for the maintenance of the home. On the other hand, homeowners need to save for repairs or anything that may arise that does damage to the property.
- Renters insurance is more affordable than homeowners insurance
Tax savings for owning doesn’t help everyone
- With the increased standard deduction, a family might not take advantage of itemizing taxes. This is especially true the less your income is and the lower the property value and loan is.
Renters insurance typically costs between $10-$20 depending on where you live. Homeowners insurance is much more expensive and can cost several hundred dollars a month.
- Renters do not need money for a down payment, only a month or two of rent for security deposit
While renters may need to save for a security deposit (Usually 1-2 months of rent), it is much less than a down payment and closing costs for a house.
- Fluctuations in property price do not affect renters
Homes increase and decrease in value as time goes on, but these fluctuations will not affect rent prices as much. If you purchase a home, you will have to deal with property value fluctuations, and it may become an issue if you want to sell the home in the near future.
- Renters do not pay property tax (although the landlord factors into what rent to charge)
The higher the value of a home, the more property taxes the homeowner will likely pay. Renters do not need to worry about paying property tax because they are not the owner of the home.
- Renters and not tied to a property in the long term
Renting gives you the freedom to choose where you want to live in the future. There are far fewer commitments and you can move to a new property once your lease has expired. As a general rule, homeowners want to stay in the house for at least 5 years which gives enough time for the house value to rise so they can sell it at a higher price than originally purchased.