30 Reasons Why Renting Might Be Better
The decision of whether to rent or buy depends on an individual’s financial situation, long-term plans and includes certain market conditions. That being said, there are instances where buying might be better than renting and vice versa. Here are 30 reasons why renting might be better.
At the end of the day renting might just be plumb cheaper than owning for someone. The entry point to renting is a security deposit and the first month’s rent. The cash needed to own adds up quick after a home inspection, appraisal fee, survey fee, and several others. You can always make an apartment feel like a home with some of these ideas.
What’s near the top of the complaint list for every homeowner? Taxes. Renters are saving a couple of grand a year or more by not having to pay property taxes. Plus, some states offer a credit for renters based on the amount of rent the landlord used to pay property taxes. It’s not just taxes you’ll save big on. You won’t have to fork out any cash for these 13 things you can expect to pay for when buying a house.
Rates could be astronomical, the housing supply too tight or the next bubble might be on the horizon. It might be better to stay put in a rental than risk the value of a house during a turbulent time in the market.
No repairs, no worries, right? When you rent you obviously don’t have to cover the expense of the repairs, which is great when something goes wrong. No need to worry about the other shoe dropping on your as-is house!
Flexibility to move
A home purchase gives the impression of throwing roots down and in order to make the purchase of a home a sound financial move, you’re going to have to stay there for a while. Most experts suggest following the five-year rule so home buyers will recoup the purchasing cost of the home through appreciation of the home. Still, you need to keep the home for at least two years or you’re subject to capital gains taxes. You may not move for a while but the next time you do, learn these tips for moving furniture so you can save some friendships.
A smaller space means less money to heat and fewer rooms to light, thus a tiny utility bill for renters or in some cases, the landlord picks up the tab. A home means a significant increase in utilities that first-time homeowners sometimes forget to budget for prior to moving in. Pricing out the utility costs should be a part of any home or apartment pre-check. Renters can find ways to save on heating and cooling costs, if they have to pay for those, with some of these innovative ideas.
Faster way to build wealth
Back in November, a study from Florida Atlantic University, Florida International University and the University of Wyoming found that the property appreciation homeowners expect isn’t as powerful in terms of building wealth. The study posits that any gains from property appreciation have been offset by greater gains in the stock market. The study works largely on the idea of if renter’s decided to take the money they would’ve used toward a down payment on a house, and instead invested it in the market and continued to rent, they’d see greater wealth creation through the market rather than the appreciation of a house. However, the idea only works if the renter follows through on investing the savings they get from renting into the market.
All of this is just a fancy way of saying your house shouldn’t be viewed as an investment, though paying a mortgage for 30 years can be seen as a way to build a nest egg. There is a difference.
For those environmentally conscious or those in the minimalist camp, they can put their money where their mouth is by staying put in a rental apartment and reduce their carbon footprint. Their energy consumption would naturally decrease in a smaller space. This energy consumption tip isn’t something you hear a lot about, just like these 22 secrets your real estate agent isn’t telling you.