Owning a home has long been a goal that most individuals strive to achieve. However, a surprising number of both married and single adults are opting to become perennial renters instead of homeowners. The advantages of renting are many; here are a few:
People’s Priorities Are Changing
The average adult’s priorities are vastly different from those of their parents and grandparents. Not only are adults waiting longer to get married, more adults are open to relocating for work and do not feel obligated to stay with one company for the majority of their working years. By renting, these adults have more flexibility as to how much their monthly expenses are, and the city, state, or country they reside in.
If You Need A Loan, It May Not Be Cheaper
The average home loan requires a commitment of 20 to 30 years. When you factor in homeowners insurance, property taxes, and home maintenance and repairs, the monthly cost of living in a home is often significantly more than the cost of renting. On top of that, if a home is not paid off early, many homeowners pay nearly the cost of their home in interest alone. For example, a 30-year loan for a $200,000 house, with a 4.3 percent interest rate will end up costing an additional $156,307 in interest alone—making a $200,000 home actually cost $356,307 once it is paid in full. This example does not include any refinancing or second mortgages that many families end up taking over the years.
Less Hassle
Renting is often significantly less of a hassle than owning a home. As a renter, any time something breaks or needs to be repaired, you can pick up the phone and call your landlord to dispatch someone to perform the work that needs to be done. However, as a homeowner, you will have to learn to do repairs yourself or seek out local contractors to make repairs. As a renter, you may also feel less commitment and obligation to home improvement projects. For example, as a homeowner you may feel the pressure to have the latest upgrades in home appliances or to remodel your kitchen or bathroom to include all the latest bells and whistles. As a renter, you can simply accept what you have with no pressure to remodel.
The Limitations of Renting
While there are undoubtedly many advantages to owning a home, there are some limitations to renting that you want to keep in mind too. You are limited in the types of customization options you can make to rental properties. For example, the paint, wall coverings, flooring, kitchens, and bathrooms are often not something you are allowed to change in a rental unit. Even if you are allowed to change these items in your rental, you may be required to switch them back after you move out, and the money you invest in home improvements ends up being a financial loss. You may also be limited in the type of landscaping you can perform in a rental. Rental payments can fluctuate drastically over the years, and sometimes you may end up with an irresponsible landlord.
The recession and real estate crash have left many people thinking twice about the advantages and disadvantages between renting and owning a home—you just have to find which fits your lifestyle the best.
Leave a Reply