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Renting has become a popular alternative for many people who are looking to save money, simplify their lives, and minimize their commitment.
In today’s fast-paced society, where houses can get bought and sold in the blink of an eye, having the option to rent allows you to be agile with your day-to-day decisions.
Whether due to financial constraints or simply the desire for more flexibility, renting is becoming an increasingly attractive solution as our lifestyles have adapted over time.
Let’s take a look at why now might be one of the best times ever to consider renting instead of buying, no matter what stage of life you find yourself in today!
#1. Less Stress
Renting is the way to go if you want an easier lifestyle.
With rental properties, there are generally fewer expenses and commitments than buying a home outright.
A lot of the maintenance and repair work needed around the house is taken care of by your landlord or property manager, leaving you with more time and money to focus on other important things in your life.
#2. No Risk of Losing Money
While rare, losing money on a house through depreciation does happen.
Nationally we saw it during the Great Recession.
But it also happens in smaller markets at housing costs inflate too high.
#3. No Mortgage Debt
With interest rates around 7% and high housing prices, many people will take on a lot of debt and pay a lot of interest when buying.
It might be wiser to wait a few years for interest rates to come back down and spend the time waiting to build up a significant cash cushion so you put 20% or more down on the house you want to buy.
#4. No Maintenance Costs
Aside from keeping your apartment looking good inside, you have zero maintenance costs.
This includes landscaping outside and paying to replace large system failures like the hot water tank or HVAC system.
#5. Predictable Costs
Rent is predictable. Every month you owe the same amount.
Your mortgage is also stable, but many more things can go wrong.
Replacing a mower, landscaping, and more all add to your variable costs as a homeowner.
#6. Easier to Relocate
Leases are typically year to year, meaning after every 12 months, you can move across town or to another state.
This reason alone is why most people recommend renting when moving to a new city, so you can figure out where you want to be and then buy a home there when you have the money.
#7. Lower Insurance Costs
Insuring a home will cost you a thousand dollars a year or more.
But when you rent, you might be a few hundred.
This is because you are only on the hook for your personal contents and not for replacing the building in the event of a fire.
#8. Access to Amenities
Many apartments come with amenities on-site. These include a pool, clubhouse, exercise facility, and walking trails.
A home comes with none of these things.
#9. Lower Monthly Payment
In most cases, your rent will be less than your monthly mortgage payment.
This is because your mortgage includes your principal, interest, taxes, and home insurance.
Depending on your circumstances, your rent could be anywhere from a few hundred to a thousand dollars less.
#10. Lower Upfront Costs
Securing an apartment comes with a much lower upfront cost.
While you might have to pay the first and last month’s rent, plus a security deposit, this is still much less than making a down payment and paying inspection and closing costs.
#11. Easier to Find Housing in Your Price Range
With crazy high housing prices, finding an apartment or home to rent in your price range will be easier.
If you buy, you may have to save tens of thousands more for the down payment to afford the monthly payments.
But with rent, you can get a nice place without waiting until you can afford it.
#12. Lower Risk of Being Cash Poor
If you buy a house you cannot afford, you risk becoming house rich, cash poor.
This means all your wealth is tied up in your house. You have no other savings.
When you rent, there is a slight chance you end up this way if you take an apartment you cannot afford, but more than likely, this won’t happen.
Renting offers a lot of flexibility.
If you get a new job across the country, it is easier to break your lease, pay the penalty and move on than it is to list and sell your house.
Plus, renting lets you move more frequently, exploring other areas.
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I have over 15 years experience in the financial services industry and 20 years investing in the stock market. I have both my undergrad and graduate degrees in Finance, and am FINRA Series 65 licensed and have a Certificate in Financial Planning.
Visit my About Me page to learn more about me and why I am your trusted personal finance expert.