5 Reasons Why Renting is Better Than Buying
Whether you are a serial renter or are preparing yourself to fly the nest for the first time, it can be difficult to choose between renting and buying. But by weighing up the pros and cons of each option, you can make an informed decision and prevent yourself from making a costly and time-consuming mistake that you may come to regret down the line. Continue reading to find out why renting is better than buying.
1. It is cheaper
With no maintenance costs or bills to worry about, it tends to be cheaper to rent than in it is to buy. In most cases, your landlord is responsible for footing the bill for any maintenance, upkeep, improvement, or repairs that must be carried out within a specified timeframe. If one of your appliances becomes damaged or stops working or your roof starts leaking, your landlord should either take it upon themselves to fix the problem themselves or at least hire an external contractor to do so. It is worth remembering, however, that homeowners are responsible for all renovation costs within the interior and exterior of the property itself which, depending on the nature of the problem, can become relatively pricey. By choosing to rent as opposed to buying, you will also be exempt from paying property taxes and solicitor fees.
2. It provides access to shared amenities
As a tenant, you will benefit from a number of shared amenities that would otherwise become an enormous expense. This includes, but is not limited to, an indoor gym, pool, and laundromat. This is, more often than not, included in the monthly rental price and at no additional cost to the tenant. By buying a property outright, you forfeit your right to these shared amenities and may be left out of pocket by shelling out for the same experience elsewhere. With monthly gym memberships ranging from, on average, $20 to $50 per month, renting may not only be much more convenient but a little lighter on your purse strings in the long run too.
3. It has greater flexibility
When it comes to shopping around for your forever home, the buying market tends to be a little more in demand than the rental market. Depending on where you live, this is largely due to interest from foreign investors or ex-pats looking to relocate abroad or purchase a second holiday home. By looking at houses for rent, on the other hand, you will not only be exposed to more properties but are much more likely to find the property you want at an affordable price. When it comes to the real estate market, property prices for buyers can fluctuate wildly from one postcode to the next whilst rental costs tend to remain relatively unchanged. A great example of this is New York City. Whilst the cost to purchase an apartment in the Big Apple is out of reach for the vast majority of young professionals, there is a wide range of rental properties available for renters on both ends of the financial spectrum.
4. It benefits from fixed monthly costs
When you sign a tenancy agreement, you, essentially, agree to pay a fixed amount on the same date of each month. With rent increases frowned up, or even illegal, in a growing number of circumstances, this amount is unlikely to change within a 12-month period. This can allow you to budget for essential and non-essentials items accordingly and alter your spending as necessary going forward. With no need to factor in any additional or hidden costs or pay for the services of an external solicitor or surveyor, you can know exactly how and when your hard-earned cash is being spent. By buying a property, on the other hand, you may have opted for an adjustable-rate mortgage. As a result, your monthly mortgage repayments can fluctuate from month to month depending on your current income and increasing interest rates.
5. It does not require a down payment
In order to ensure you are financially able to purchase a home, you must prove you have saved a substantial amount of money to put down a down payment. If you are looking to rent, however, landlords tend to only require your first month’s rent as well as a security deposit which will be returned to you as your tenancy comes to a close if the property is in the same condition as it was upon your arrival. For example, on a home worth $300,000, a $20 down payment will require savings of at least $60,000.
When it comes to making a decision between renting and buying, renting is the obvious choice. This is because it is cheaper, it provides access to shared amenities, it has greater flexibility, it benefits from fixed monthly costs, and it does not require a down payment.