Owning a home of your own has long been labeled “The American Dream” but is this a worthy title or a common misconception? Taking a variety of factors into consideration, we’ve compiled this list of 7 reasons you should rent, rather than own a home.
1. Save Money:
While owning a home is considered by some to be one of the best investments you can make, it does not come cheap. Simply do the math; by adding up your initial closing cost and sizable down payment, your monthly mortgage bill, homeowner’s insurance, property taxes and general maintenance expenses that will inevitably accumulate, there are considerable expenses associated with home ownership.
As you can see, although renting might feel like you’re just giving money away, on the plus side, the monthly payments are substantially smaller.
#1: Save Money
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2. Flexibility & Mobility:
If you’re hoping to make your mortgage payment even remotely manageable, it will require a substantial down payment and a loan lasting in the neighborhood of 20-30 years. Ask yourself; can you see yourself staying in one place for that long? Well, if you’re someone who likes a change of scenery from time-to-time or is considering a career change that might require you to move across the country, keep in mind that buying a home can be an extreme strain on your mobility.
Buying a home can tie you into a multi-decade agreement and location, renting is a great way to stay mobile and highly flexible with your residential options.
#2: Flexibility & Mobility
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3. Less Maintenance Responsibility:
One of the most nagging nuances of home ownership is maintenance. Be it a broken pipe, a leaky roof, a broken window or a blown water heater, when it’s your home, it’s your problem. On the other hand, as a renter, you essentially get all of the day-to-day benefits of owning a home, such as privacy and space; however, you get to avoid the ultimate burden of responsibility. Just call your landlord – the owner.
#3: Less Maintenance Responsibility
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4. Options & Variety:
When it comes to picking your place of residence for the next month, year or 30 years, you’re entitled to get exactly what you want. Unfortunately for prospective homebuyers, there are always more options available to renters. In addition to the many apartments and condos available for rent, now that the housing market is struggling, many owners are renting out their homes to help pay their mortgage, making for an ever-growing spectrum of rentable residences.
Whether it’s a budget studio or a luxury suite, there are simply more options when it comes to renting than what is available in the buyer’s market.
#4: Options & Variety
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5. Credit Leniency:
Having less than stellar credit in this world where “Credit is King” makes it difficult to rent and near impossible to buy. That said, for those with a sub-par credit rating, finding a landlord who will accept your score may be difficult but it’s much more likely than finding a lender – the rental market is simply more lenient when it comes to credit scores.
Additionally, a bad credit score will make for a proportionally higher mortgage rate and more interest paid; however, if you can find a landlord that is willing to work with you and your low credit score, they legally cannot charge you a higher monthly rate because of your struggling credit score and you’re therefore entitled to the market rate, nothing more.
#5: Credit Leniency
IMG SOURCE: http://www.goodcreditbadcredit.com/wp-content/uploads/2012/09/Bad-Credit.jpg
6. Renewal Options:
Whenever a 10, 15, 20 or 30-year mortgage is signed, your opportunities to alter your agreement are then few and far between – with the exception of one, maybe two refinances along the way, you’re stuck in an extremely long-term contract. In stark contrast, because most rental agreements are only 1, 6, 9 or 12 months, by renting you now have the luxury of reevaluating your situation much more frequently and, due to the number of options available on the renter’s market, you can simply choose to renew your lease or negotiate all new, more favorable, terms.
Further, it’s worth noting that the penalties for breaking a rental lease are far less severe than defaulting on a mortgage.
#6: Renewal Options
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7. Simplicity:
Long-term contracts with little flexibility, excessive square footage, unexpected maintenance, frequent yard care, property taxes, homeowners insurance, etc; all of this comes with owning a home and all of this is complicated. Renting, on the other hand, requires one check to be submitted at the beginning of the month and everything else is taken care of, courtesy of your landlord.
The truth of the matter is that owning a home requires an extreme amount of attention to a variety of financial and physical obligations. That said, if you’re an individual who appreciates a life of simplicity, renting is a great way to minimize your cares and live a simple life, free from the complicated duties that inevitably come with owning a home.
#7: Simplicity
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We hope you’ve enjoyed this article highlighting seven reasons to rent rather than own. While it’s definitely the dream of some people to own a home of their own, we trust that this information offered another perspective, illustrating that the grass isn’t always greener on the other side.
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