Reasons Why Renting an Apartment is Better than Buying
For a lot of people, owning a home is one of the most significant milestones in life. However, many miss the fact that renting a house also has its advantages.
Let's admit it, homeownership isn't for everyone. Not only are the prices of houses steadily increasing over the years, but the benefits of buying a home are also getting lesser and lesser. That said, renting a house is ideal if you want less responsibility and more flexibility in your finances. Buying a house needs commitment and some big savings, unlike renting, where you can still maintain your lifestyle and financial flexibility.
This is especially true for those in an expensive housing market and who have no savings for a new house. With that in mind, renting a house can be a much simpler way of acquiring a house without saving money for a few years or taking out a big mortgage.
Not only that but renting also allows you to have more flexibility with your monthly payments and can move whenever you can. There are many more reasons you should rent instead of buying a house, and luckily for you, we'll talk about them today.
Renting is Less Expensive
As we all know, having a house is much more expensive than renting one. This is because of the maintenance and upkeep alone. Since it's your house, you are responsible for checking the entirety of your house for damages and its faulty aspects. Not to mention that if you do find some damages, you'll be paying for the materials and labor.
However, renting a house means that you are not responsible for the house's maintenance and upkeep. Also, the owner itself will do the survey and look for professionals themselves to fix what's broken. Of course, we're not saying you won't be paying for those, but it surely will be much cheaper than fixing it yourself.
No Down Payment Needed
Even in a moderately high housing market, it will take the average citizen several years or a decade at most to pay for the down payment of a new house. According to a survey made by Unison, a typical earner will most likely save money for 12 years to be able to pay for a down payment for a house located in Ohio.
This will even be longer in more expensive cities like 30-40 years' worth of saving. While, of course, in renting, you still need to pay for a security deposit, it's still much cheaper than a down payment for a new house.
Let's delve into this deeper. When purchasing a new home, you are liable to pay for its down payment, which is usually 20% of the property's original value. Of course, the down payment will go down to your equity of the house. This equity will gradually grow as you pay for the mortgage over the years until the house is yours. And once you paid for it in its entirety, it will be a sizable investment that renters will never attain.
Although that might be the case, the amount for the down payment is much larger than a security deposit. For example, 20% for a brand new home with a market value of $200,000 is $40,000. However, the average rental security deposit usually costs less than $5000. If you don't have the money for a brand new house, then you're better off renting one.
Property Value is None of Your Concern
While buying a house, the property value is your main concern; renting a house doesn't have any of that problem. This causes less stress since the property value of the house you're renting has no bearing on your decision. It's the landlord's concern alone.
While, of course, your landlord can change the monthly payment after the lease is up, he/she is liable by the law to tell the renters their upcoming monthly payment to avoid confusion. Also, locking in rent on a lease is very stable, unlike a house whose value, tax, and mortgage fluctuate along with the market. Having a fixed monthly payment is a huge convenience in budgeting, especially if you're very concerned about where your money is going.
You're Not Tied to It in the Long Term
If you're planning to stay in the city for less than five years, renting a house is much more manageable and suitable for you than buying a new house. This is a good benchmark if you want to decide if you should sell or rent.
For those people who can't stay in the city for at least five years, renting gives you the freedom to be more flexible with your money and to do what you want in the foreseeable future. It sure will be much less stressful to move to a new city without a mortgage in tow.
Something to Remember
Although having a new house is a huge accomplishment, there are certain factors you should consider on whether you should buy a new one. Renting a house is much more flexible and not to mention much cheaper than buying a new one. It also gives you the freedom to move in at least half a decade if you're constantly on the move every few years due to work. In short, renting gives you a home without any of the burdens of buying a new one.