Buying a house is a lifetime achievement for many people in the current world. This, however, hasn’t been the case because people used to build their own or rent from someone. While both buying and renting have their convenience and financial advantages, owning one doesn’t work for everyone.
Deciding whether to buy or rent a home is an overwhelming decision. Recent years have seen many people favoring renting over buying a house. This rise is greatly attributed to the fact one settles for what he or she can afford at the moment. Other factors that you need to consider before renting or buying a house include:
- Do you wish for flexibility or stability?
- Are you ready to face home maintenance and repair coats?
- Your family, career and financial goals.
- Real estate taxes and expenditures.
This article aims to shed light on why renting is suitable over owning a home.
Depreciating Home Value
The value of a home tends to go up and down. However, with most homes, the value usually depreciates. While this affects homeowners, renters barely feel the impact. The value of the home determines the amount of taxes to be paid, mortgage and more. In an unstable housing market, if you just rent a house, you will not be greatly affected.
The real estate industry began experiencing a crisis in 2007 which saw house prices decline by as much as 62% in Miami and Las Vegas between the years 2007 and 2009. Since then, the trend has been the same and the condition is fueled by high inflation rates. If you decide to buy a house with an annual appreciation of 1% in an economic system having an inflation rate of about 3%, you will definitely be losing the purchasing power. As an investment, —it will not be a great deal.
Home Maintenance And Repair Costs
With time, your home will require repair and constant maintenance for it to retain its shape. When renting, these expenses usually fall under landlord or property management responsibilities. If the roof starts leaking or an appliance stops functioning, for instance, the refrigerator or electricity connection—all you will need to do is call the landlord and it will be fixed. Homeowners on the other hand shoulder renovation, maintenance and repair costs. Depending on the extent of repair, it can be quite expensive.
Flexibility For Where One Wants To Live
Unlike homeowners who are restricted to areas where they bought or can afford to buy a house in, renters can live virtually anywhere they want. Homes in well-developed cities may be out of reach for people who wish to buy, but affordable for renters. Although rent tends to be high in these areas, it is quite easy to find monthly rent than buying a home. If the need arises that one has to move, renters move more swiftly than homeowners.
No Real Estate Taxes
This is among the biggest benefits renters enjoy versus having to buy a home. One is not required to pay property taxes. The taxes vary with states and are usually a hefty burden that can accumulate to thousands of dollars per year. The real estate taxes are complex but one fact remains true, the higher the value of your home the higher the tax. Recent years have seen larger and expensive houses being built. This implies tax burdens are going to be quite tough.
Flexible If Downsizing Is Deemed Necessary
Let’s be honest, the economy has drifted from bad to worse and citizens are struggling to put something on the table. Renting give people an option to downsize which partially cut their monthly expenditure enabling them to live a less demanding life. This is especially important to those who have inconsistent income or retirees who wish for smaller alternatives that suit their budgets.
On the other hand, selling a home is not easy because of the huge paperwork and money involved. This is made even harder if the value of the home cannot cover the renovation cost. This makes it hard to break free of expensive houses by owners even when the living cost is beyond their capabilities.
Renting Is Less Expensive
Though financial experts argue it’s more expensive renting than buying a house, renting is quite cheaper and buying a home should be left to committed buyers who wish to get mortgages. This, however, depends on the area you wish to live in, rental prices and house prices. A survey showed renting a house in Seattle or San Francisco to be a great deal. Prior to any commitments, look for cities or states that offer average price that you can easily manage.
Homeownership has been a cherished achievement for decades and may prove to be a lifetime decision. However, this does not work for everyone. If you are looking to navigate around hustles that come with homeownership, property taxes, upkeep cost among others, then renting is perfectly suited for you. Of course, it will always narrow down to lifestyle and financial stability.