The Benefits of Renting Over Owning
While purchasing a home is a common American dream, it is not necessarily a realistic expectation for everyone. The United States has historically had low homeownership rates, despite its current high rates. Traditionally, families have had to either construct their own homes or find a place to rent.
While renting certainly has its drawbacks, it also has certain positives. It may be more practical, financially, for some people to rent instead of buy. There are several factors to consider while deciding between renting and buying a property.
To help you make up your mind, we'll compare and contrast buying a home with renting. Although owning one's own house has traditionally been seen as essential to achieving the American Dream, this view is slowly shifting as more individuals opt to rent. So, why is that?
More Flexible
Less commitment is required when renting a property rather than buying one, which is one of the main advantages of renting. It's typically easier and faster to relocate while renting when hiring expert Wandsworth estate agents than while buying a property. If you are relocating for career or personal reasons, this can help.
If you are a renter and your landlord decides to sell the property, you won't have to worry about relocating. Would you like to uproot your life and relocate across the country? The process of terminating a lease is far more streamlined and expedited compared to selling a home.
Many individuals find comfort in knowing that if they deeply regret their current residence or location, they will only have to endure it for a short time (often a year or less).
Lower Maintenance Costs
An added advantage of renting is that you usually won't have to spend as much on repairs as you would if you bought the property. If anything breaks in your rental unit, you can often expect your landlord to handle the bill. Plus, most landlords will remove snow and tend to the grass, two services that may add up quickly if you own your own house.
However, if you are a homeowner, you must perform routine maintenance and upkeep if you own a property. This may need a substantial financial investment. In most cases, the value gained from a remodeling project is less than the cost of the project itself.
Even while the value of a home increases with repairs and renovations, the costs of these projects continue to surpass their returns, as reported by Remodeling magazine.
No Property Taxes
Tenants of rented properties are not subject to any property taxes. Local governments collect property taxes from homeowners annually, often at a rate of 1% to 2% of the property's assessed value. Property taxes may be a major financial burden for homeowners compared to the cost of mortgage payments and maintenance.
Property taxes may cost several thousand dollars annually in some regions. It can be heavy on your budget if you have bought a house that does not generate rental income.
No Mortgage Payments
Another advantage of renting over buying is the lack of mortgage payments. A mortgage is a loan with a set repayment duration, often 15 or 30 years. The ability to keep up with mortgage payments might become challenging if interest rates rise or one's financial circumstances shift. You may forget about monthly mortgage payments if you choose to rent instead of buy.
Easier to Qualify For
It's also easier to qualify for a rental than a mortgage. Lenders are going to look at your credit report and income documentation very closely when you are trying to get a mortgage. When you rent, landlords tend to be less picky about your credit and more eager to let you in.
Whether you should rent or buy is a question of budget. It's also about how you feel and where you see yourself in the future. Individuals who tell you that renting is wasteful or that buying is always more beneficial over time are wrong.
If your mortgage payment each month is less than your regular monthly rent, don't listen to those who insist that purchasing is smarter. There is too much variety in the housing market and in people's personal situations for conclusions like this to be relevant.