BusinessHABShould I buy or rent a home? An average American always finds it hard to answer this. Acquiring a house is a big achievement. Buying a house seems like an obvious choice.
Does that mean buying a house is for everyone? I don’t think so. Home buying and home renting both involve great monetary obligations. Also, they both have their benefits and drawbacks. The choice to buy or rent depends on your financial status coupled with your way of life.
However, home renting has become preferred over buying recently because of some benefits. Read on as we discuss the benefits of renting a house instead of buying.
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1. No Down Payment
One of the benefits of renting a home over buying is that it requires no down payment. Down payment is a percentage (usually 20%) of your total mortgage value that you must pay before your loan is granted.
Meanwhile, all you’ll pay as a home renter is your fixed monthly rent and security cost. Security cost is refundable when you’re moving out, provided you do no damage to the house.
Regardless of the amount paid for rent, it’s still lesser than the down payment. For instance, if your housing loan is $400,000, you will need around $80,000 for your down payment.
Raising a down payment is always challenging, but it is not required to lease a home. It also keeps your savings intact.
2. No Risk of Decreasing Value
Purchasing a home is risky, just like other investments. Yes, you’ve invested in real estate the moment you made the down payment and got your loan approved.
However, uptime and downtime affect real estate too. Your house may decrease in value when there is an economic meltdown. This financial crisis will further affect homeowners who must keep up their monthly mortgage payments
Renting a home and hiring qualified estate agents in Peterborough will save you this stress. Home renters are not concerned when the value of their rented home increases or decreases. It doesn’t have any effect on their finances.
3. You Don’t Pay Real Estate Taxes
Another benefit of renting a home is that you don’t pay taxes associated with acquiring a home. Real Estate taxes are calculated using the price of your home and the land.
Meanwhile, the real estate tax may amount to thousands of dollars yearly. This tax is an unwanted burden most Americans bear for purchasing a home.
However, you don’t pay real estate tax when you lease a home. Since the building is not yours, nobody will tax you for it. Also, this will save you the stress of paying these taxes and your money.
4. You Don’t Have to Pay for Repairs and Maintenance
As a home renter, you don’t have to pay for repairs and maintenance. Your landlord is responsible for the repairs and upkeep of your rented apartment.
For instance, if your dishwasher broke down, your air conditioner stopped working, or the water stopped running in your purchased home, you will shoulder the payment for repairs.
However, as a home renter, unless you are directly the cause of the damage, the cost of repairs is not your concern. It is easier to call someone else for repairs than to bear the bill yourself.
5. Rapid Mobility at Low Cost
Another important benefit of renting a home instead of buying is that you enjoy the ease of moving from one location to another. A homeowner finds it hard to move around. They will have to sell their property, and the processes take time.
Conversely, it is easier to break a rental agreement. If you dislike staying in a location for a long period or your job involves changing location often, you should rent a home.
Moving out of a rented house also costs less than moving from an acquired home. The cost of inspection, appraisal, brokerage, and other expenses does not concern you.
6. Free Access to Some Utilities and Amenities
Some rent agreements come with free water, heat, and internet. The landlords pay the costs, and where there is no free access to these utilities, the expense of obtaining them is cheap.
Similarly, some leased apartments have a pool, gym, and other amenities that make life easier. Landlords mostly pay the cost of installation.
However, renting a home saves you huge expenses associated with having such amenities as a homeowner.
Bottom Line
Although having a home of your own seems better, home ownership doesn’t suit everyone. However, before you choose between renting and buying a home, check your financial status and some other factors. In the end, you may realize renting a home might be more beneficial to you than buying one.
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