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.
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No lawn mowing
For those who aren’t as inclined on the handy side, there is likely relief of not having to mow a lawn, which is a time drain and a buzzkill.
No snow shoveling
In a similar vein, those who rent, likely don’t have to shovel a driveway or a sidewalk. But they might have to shovel out a vehicle if they have to park on the street. You won’t have to know all these great tips on snow shoveling.
Apartment complex amenities
The apartment complexes that have gone up in recent years in metropolitan areas tend to offer an array of amenities like an exercise facility, party room, or table tennis area. You might not have to splurge on all that stuff.
Cost of housing
If rent prices are out of control, it probably makes sense to take the steps to own. But if home prices are too high in your market, then it’s better to rent. There are a number of rent-or-buy calculators out there like Realtor.com or the New York Times. Before you start seriously looking into renting or buying, be sure you know these 26 real estate terms to help you navigate the process.
Opportunity to invest
Harkening back to the study that found investing is likely a better way to create wealth, the opportunity to invest makes renting an attractive option. That’s if that money does get invested.
A House is not an investment
Historically, housing prices have increased slightly more than the level of inflation. The only time the housing market rivaled the stock market came between 1990 to 2006. Learn how to avoid common mistakes that others make when buying a house.
Avoid being house poor
You bought a great house but now you don’t have any money to do anything else besides leave for work. What good is that? It’s called being house poor and it’s something to be avoided. You’ll be walking a tightrope of paying bills, including the mortgage, and in that case, it’s better to continue to rent until you have some more breathing room.
Down payment determiner
So the decision to rent or to buy should also include consideration of how much of a down payment you can make to purchase a home. Obviously, there are minimums that must be met for down payments but there are risks of putting down a low down payment. Those who purchase with a low down payment face more risk in losing value in their home if the market drops off.
Mortgage interest deduction
One of the impacts of The Tax Cut and Jobs Reform Act of 2017 is that it increased the breakeven rent points since the mortgage interest deduction became capped at $750,000 and the standard deduction got raised. According to the Urban Institute, the annual breakeven rent rate increases for families who earn $75,000 or more a year. The breakeven rent rate is the point at which it makes more financial sense to rent a home. Since the new tax plan de-incentivizes itemization, the point at which the family should own has increased by about $100 a month for a family of three earning $50,000 a year, according to the Urban Institute.