When you hear people talk about renting versus buying a house, you’ll often hear them say that paying rent is like throwing your money away every month. They’ll tell you that owning your home is a much better bargain and that you’ll save money while investing in your future if you buy instead of renting.
All that might have been true when you were a child, but is it still true today? After the housing crash in 2008, lots of Americans have a new perspective on real estate and renting houses. Let’s take a closer look at which option is best in the 21st century.
Don’t Worry About Saving for a Down Payment
When you move into a rental property, the worst you can expect is to pay your first and last months’ rent, as well as a security deposit. And, in most places around the country, the deposit and the last month’s rent are one and the same. That’s not the case when you buy a house. You’re either going to have to save a significant amount of money or take out a loan to cover your down payment on your mortgage loan. That means, from the very beginning, you could end up with two loans to cover your home.
Freedom to Move When You Want
Can you guarantee that your next job is going to be in the same city where you live now? If you’re like most people today, you know that this is no guarantee at all. More and more corporations are willing to relocate their employees from other cities (and countries) than ever before. And, when you rent, you have the freedom to move whenever you want.
You won’t have to worry that the market is flat or declining, or that you won’t be able to afford to pay the mortgage on your new and old homes at the same time while you wait for your old home to sell. Instead, you can just terminate your lease and move to your next home.
Forget About Real Estate Taxes
When people tell you about how much money you’ll save with a mortgage instead of rent, they often forget to tell you about the property taxes you’ll be paying in addition to those mortgage payments. And, if your county tax office decides that your area is improving, your property taxes are likely to increase over time. Thus, you could be looking at a much more expensive place to live and no way to get out of it without finding a buyer.
No Need to Save for Maintenance and Repairs
Finally, houses and condos have numerous hidden expenses in the form of maintenance and repairs. If you own the property, then you are responsible for taking care of all of its needs. On the other hand, if you’re renting and you have leaky pipes or a problem with the roof, it’s up to your landlord to take care of it, at no cost to you at all.
Yes, rental rates around the country are on the rise. However, when you figure in all of the costs of owning a house, you can easily see that renting is often much more affordable than buying a house. And, in addition to all of your financial savings, you will have a lot less to worry about on a daily basis. Essentially, you can think of the slightly higher rental rate you pay as if it were insurance against bad housing markets, taxes, maintenance, repairs, and all of the other things you won’t have to spend any money on while you’re renting.
So, do you still think that renting is throwing your money away, or are you starting to think that renting could be a better option than buying a house?