Renting Vs. Ownership: Why Renting a Home Is a Great Idea

Homeownership only makes sense if you plan to live in the house for the long term. You might not gain anything and can even lose money if you sell early. Thus, moving soon after purchase is financially disastrous.

You do not have to worry about that as a renter. As long as you signed a reasonable lease, you can even move after a year without much damage to your finances. Thus, renting is a great option if you move a lot, for example, because of your job.

One of the biggest barriers to homeownership is the down payment. The conventional down payment is 20% of the purchase price, which works out to $60,000 for a $300,000 house. Again, you do not need a down payment to rent. The rental equivalent of a down payment is the security deposit, which is less than a typical down payment.

Sure, you may be able to buy a house with a low or zero down payment, but that option comes with some disadvantages. For example, a zero down payment often restricts you to a few lenders, increases your rates, and increases your monthly payments.

Homeownership requires more money beyond the mortgage payment and down payments. You have to pay:

• Homeowners insurance premiums
• Property taxes
• Maintenance and repair costs

If you rent your home, you also have some ongoing costs, such as utilities and renters insurance. However, the ongoing costs will not be as high as they would be if you bought the same home. The difference arises since the property owner takes care of some of the costs.

Homeownership also comes with responsibilities that renters do not face. In most cases, money alone will not take care of such responsibilities. For example, as a homeowner, you have to look for someone to mow the lawn, maintain the roof, service the major appliances, or repair a broken fence. A renter can be away for an extended period without responsibility worries.

As previously mentioned, you are likely to lose money if you move soon after a home purchase. As such, you might have to live in a house or neighborhood you do not like so as not to lose money. When you rent, you can try out the area for some time without a firm commitment. You can rent then move if you do not like the neighborhood or rent then buy a property in the area.

If you rent a house, you are likely to enjoy more amenities than if you buy a house. Most property developers are able to include more amenities in rental houses than houses for sale. For example, a rental complex may include a basketball court for the renters.  

Many people cannot afford to buy a house with a basketball court. For those who do (such as condominium owners), relevant fees apply.

Property values usually appreciate, but this is not a given. People do buy homes and sell them at the same or even lower prices. With a rental property, you do not have to worry about any depreciation since you do not have any equity in the house.

Many homeowners start out as renters before they take the purchase plunge. If you are at the renting stage, Meadowdale Apartments can provide your next home. Contact us so that we can show you the available properties.