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As the cost of buying a home gradually rises, more and more people are beginning to recognize that in today’s world, renting is often the smarter move.
Whether you’re looking for flexibility or convenience, there has never been a better time to explore how much your rental experience can improve your quality of life.
From avoiding potential pitfalls associated with homeownership and gaining access to unique amenities not found in homes on the market to simply saving some money along the way, let’s take a look at why renting is increasingly becoming an attractive choice compared to purchasing a residence.
#1. 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.
#2. 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.
#3. 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.
#4. 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.
#5. 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.
#6. 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.
#7. 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.
#8. 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.
#9. 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.
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.
#11. 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.
#12. 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.
#13. 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.
#14. More Options
One of the primary benefits of renting is that you’re not tied down to a single location.
If you need to move for work or just want to try living in a new city, it’s easier and more cost-effective than buying and selling a home every time.
This gives renters a much broader range of options when considering their housing situation.
You’re also not limited to just one property.
You can explore a variety of rental options, from studio apartments to multi-family homes, and compare pricing and amenities in different areas.
Plus, you don’t have to worry about committing too much financially if you’re uncertain how long you’ll need the space.
Renting is a great option for those who don’t have access to a large down payment or who don’t plan to stay in one place for a long time.
Renting can also be an ideal situation for those with pets, or people looking for short-term accommodations while they look for a permanent home.
It’s also usually much easier to qualify for renting than it is to get approved for a mortgage.
This makes renting an attractive option if you can’t qualify or don’t want to pursue a mortgage at the moment.
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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.