The American dream typically involves graduating from college and landing the perfect job and then saving up for the opportunity to buy a home. It is a lifelong goal of many men and women to manage their credit and finances correctly for the express purpose of signing on the dotted line for a mortgage. There is something admirable to be able to say that this or that property belongs to them. Home ownership is admirable, but there are tremendous financial benefits to renting as opposed to buying a house of your own. Here is a look at seven reasons why renters have the better financial deal over homeowners.
Renting vs Buying
No Unexpected Maintenance Costs
The biggest advantage that renters have over homeowners is that they have no maintenance costs or repair bills. When you rent a property, your landlord is responsible for all maintenance and repair costs. If an appliance stops working or your roof starts to leak, you do not have any financial responsibility to have those things fixed. On the other hand, homeowners are responsible for all of their own repair, maintenance, and renovation costs. Depending on what the fix is, these costs can be quite expensive.
No Big Down Payment
Another area where renters have the better financial deal is upon signing. You do not have to have a huge down payment saved up to move into a rental property. While the exact amount you need to have to be able to move into a rental varies from case to case, the total amount is significantly less than you would need to buy a house. By renting a home you can avoid the high initial down payment costs.
You Do Not Have to Pay Real Estate Taxes
A key benefit that renters have over homeowners is that they do not have to pay real estate taxes. Real estate taxes can be a big burden for homeowners. These taxes vary by county. Although property tax calculations can be complex, they are generally determined based on the estimated property value of your house. With houses getting larger and larger, property taxes can be a significant financial burden.
Have a Fixed Rent Amount
Rent amounts are fixed for the duration of the lease agreement. While landlords can raise the rent with notice, you are able to budget more efficiently since you know the amount of rent you are required to pay. The difference with mortgages is the amount of the property tax can fluctuate.
Avoid Decreasing Property Value
Property values go up and down, and while this may affect homeowners in a big way, it does not affect renters. Home value determines the amount of property taxes you pay, the amount of your mortgage and more. In a rocky housing market, renters are not as adversely affected. By renting, people are avoiding potentially owing a mortgage that is more than the house is worth. Have the
Flexibility to Downsize
In today’s economy, many people struggle to make ends meet. By renting, people have the option to downgrade to a more affordable living space at the end of their lease, if necessary. When you are a homeowner, it is much more difficult to break free of an expensive house because of the fees involved with buying and selling a home. Renting protects you from getting into a financial bind.
Significantly Lower Insurance Costs
While homeowners need to maintain a homeowner’s insurance policy, renters would be wise to invest in a renter’s insurance policy. Luckily for renters, renter’s insurance is much cheaper and it covers a variety of items in your possession. The average cost of renter’s insurance is just $12 per month, meanwhile, the average homeowner’s insurance policy cost ranges between $25 to $80 per month.
The Bottom Line
While owning a home may be beneficial for people over a long period of time, for many people renting is the better option. There are plenty of examples that show how renting can save consumers a considerable amount of money. The choice of whether to rent or buy your own home is a personal one. Before making a hasty move, review the details and make the financial decision that is right for you and your family.
CPM takes care of their tenants. Renting from us is a cost effective and great way to keep your loved ones safe. Make the right choice and choose Catron Property Management today. See you soon!