Renting can sometimes take on a negative connotation. After all, the whole goal in life is to save up money, get a good job and buy a home. Right? Well, maybe it isn’t the right thing for everyone.
Sure, home ownership comes with a number of benefits like stability and the fact that you are building equity but you might have things you value more. Here are just a few of the reasons that renting a home might be better for you and your lifestyle.
You Hate Maintenance
You get many guarantees that come with home ownership. One of them is the guarantee that something will break.
There are a lot of parts in a home. You have plumbing, electrical systems, heating and cooling systems and a host of built in appliances. There are literally hundreds of things that can go wrong with a home.
If you hate maintenance, this can really get to you. Even if you do not do the work yourself, you have to call the repair person, get bids and then make sure that the work is done right. Going along with all of that is the sudden surprise expense of an emergency repair.
A renter who needs help with a repair can simply call the landlord.
You Are A Nomad
If you like to move around or need to move around for work, home ownership may not be for you. This is especially true if you do an annual move. Selling a home is a major process that takes a lot of paperwork and time. In an ideal situation, it may take months to sell a home.
When you rent, you can move just as soon as the lease is up. Even if you have to break a lease, the financial consequences are minimal, just a few month of rent.
The benefit of being able to get up and move on a whim is huge. It would allow you to easily take a job in another city or even get out of a neighborhood that you no longer like. Do not underestimate the power of flexibility.
You Like Expensive Amenities
If you own a home, you probably do not have all of the amenities that a renter often does.
An apartment renter will often have access to things like olympic sized swimming pools, basketball courts, full sized gyms, saunas, concierge service and much more. These come for free with your rent but even just a few of them would cost a small fortune to purchase.
If you love high end amenities and are not a millionaire, renting may be the way to go.
You Like Where You Live
One of the best reasons to rent may be that you are happy renting. You are used to it and you like where you live and your landlord or management company takes care of you. You might have a nice routine going and just do not feel the need to disrupt it.
Why take the plunge of home ownership if you are generally happy. Besides, it could end up costing you more for a mortgage and upkeep than you pay in rent.
You Don’t Like Surprise Expenses
When you rent, your monthly payment stays exactly the same.
When you own a home, your mortgage payment can fluctuate. Property taxes go up every year and sometimes home owners insurance may as well. You could even find yourself in an escrow shortage which could cause your monthly mortgage payment to skyrocket until you get caught up.
In addition, surprise maintenance repairs can come out of the blue and you would need to have money right away to pay for them. Things like burst pipes, electrical problems, etc have to be dealt with immediately.
If you value the ability to have stable monthly expenses, renting may be the way to go for you.
You Have Better Uses For A Down Payment
Getting into a home is expensive. It will require you to pay for a home inspection, appraisal and a sizable down payment. Down payments can be as little as 3.5% on an FHA loan but that would also require you to carry very expensive mortgage insurance that never drops off the loan.
The best way to go is with a 20% downpayment which will not require Private Mortgage Insurance. On a modest $200,000 home, that is $40,000. You might have better uses for that money.
Perhaps you would rather invest your money in stocks rather than real estate.
You Want To Save Money
In some cases, you may save money by renting. Rent can often be cheaper than a mortgage payment. This is especially true if you are single and only need a modest one bedroom apartment.
Even if you need to rent a bigger home, it still might be cheaper to rent. There are many areas in the country where home values are so out of control that ownership is just not affordable and you can save hundreds of dollars a month renting.
You Are Afraid Of A Housing Bubble
The only thing worse than paying a high mortgage payment is owing more on a home than it is worth. It has happened and can happen again. Because of high home values, many people are predicting that it may happen soon.
If you buy a house and it depreciates in value, you are stuck with it. Walking away from a home is not a good option. It would give you bad credit and could cause very long lasting financial problems.
If you are on the side that believes a bubble is going to pop, renting might be a smart move.
You Want The Ability To Adjust Home Size
Maybe you are thinking about starting a family and do not want to commit to a smaller home that you might outgrow in a few years.
Sure, you could just jump into a big house but then you will be paying for more space than you need and more space than you might ever need
If you are unsure about what size your family will be over the next few years, renting mght be a smart move.
Wrapping It All Up
For many, home ownership is the dream but it is not the dream of everyone. Don’t feel the pressure to jump into home ownership if you do not feel it is right for you. Many people do and will continue to live very happily writing a monthly payment on rent.