Buying a house is a great goal, but it’s not for everyone. Find out why renting might be a better option if you’re not ready to buy.
Housing Market a Hot Topic
It may seem like all anyone can talk about is the housing market. There are pain points there when it comes to inventory, interest rates, and rising home costs. Maybe you’ve decided you’re not ready to commit to purchasing a home.
A Quarter of Americans Love Renting
If that sounds like you, you’re not alone. 26% of Americans prefer to rent their homes instead of buying them.
Benefits of Renting
Buying isn’t for everyone. There are many benefits to renting a home that you don’t get when you own. Sometimes, renting is the more flexible and even cheaper option.
Housing Market Struggles
In a struggling market, many Americans have found that renting better fits their lifestyle. It offers them the ability to move when they want and better anticipate their financial obligations.
Reasons to Rent
If you’re weighing your options, here’s why renting could be the right choice for you.
#1. Short-Term Savings
Renting can allow you to save money in the short term, which many people need right now in a difficult economy.
While buying a home may be a long-term investment, renting is a good option for people who aren’t ready to give up their savings.
#2. Avoiding Repairs and Maintenance Costs
When you own your home, you’re responsible for handling everything that breaks or needs replacing. As a renter, your landlord gets that honor.
Repairs and maintenance can be very expensive, and things break – a lot. You might have to wait longer than you would if you did it yourself, but there are obvious benefits to having someone else take care of those tedious tasks for you.
#3. No Worries About High-Interest Rates
Mortgage interest rates are still high, and who wants to deal with that? If you rent, you don’t pay interest on your rent payments – everything goes toward what’s owed in your lease.
Depending on where you live, your rent payment may be lower than a mortgage payment because there is no extra interest.
#4. Few Great Homes On the Market
Right now, the housing market is struggling because of low inventory. There just aren’t enough homes on the market to keep up with the demand of buyers.
Renting can be a great way to wait out a slow market while you keep an eye out for your perfect home. There’s no reason to settle for buying a home that you don’t really love when you could rent one for a while instead.
#5. Flexibility to Move When You Want
Buying your home means you’re locked into where you live until you sell the house. That process can be daunting and expensive, even if you have equity.
Renters have the benefit of being able to move wherever they want at the end of their lease without worrying about how to offload an entire house.
#6. Saturated Buying Market
Since inventory is low, there are more would-be homebuyers than there are homes to buy. That means the market is extremely competitive, and it’s difficult to get the home you want in some areas without paying more than it’s worth.
#7. Upfront Costs are Lower
To rent a home or apartment, you typically just need a security deposit and first and last months’ rent.
For buying a home, you’ll invest a lot more upfront, including a down payment, closing costs, inspection fees, and more. If you’d prefer to keep that money in savings for now, renting might be a better option.
#8. Community Shopping
As a renter, you can hop around from community to community to get a feel for the neighborhood you want to call your forever home.
There’s no way to truly know a community until you’ve lived inside it, so renting is a great way to test the waters.
#9. Less of a Financial Risk
Owning your own home comes with risk – the market could crash, disaster could strike, or you could just decide you don’t love your house anymore.
Those risks don’t affect renters since you’re borrowing someone else’s home for a while instead of investing in your own.
#10. No Concerns About Home Losing Value
There have been concerns about whether the housing market is going to crash again, which has homeowners nervous.
If you’re renting, you don’t have to be anxious about home values, since your rent is based on the market value and not the price of the home.
#11. Safety and Security
Some people find comfort in living in an apartment complex with security systems and sometimes even guards in the building.
#12. Less Responsibility
Overall, renting comes with less responsibility than owning your own home.
While you should still care for your rental as if it were your own, you don’t have to be responsible for updates and maintenance like you would if you purchased the place.
Does That Mean I Should Never Buy a Home?
We aren’t suggesting you should never look into purchasing a home. It’s important to be ready for a move like that, and renting is a great way to buy some time before making that commitment.
The Bottom Line
At the end of the day, the choice is yours. If you’re looking for flexibility, less responsibility, and time to decide where you want to plant your roots, renting may just be the option for you.
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The post Renting vs. Buying: Why Renting Makes Sense in Today’s Housing Market first appeared on From Frugal to Free.
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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
