3 Reasons to Rent Instead of Buy a Home
Buying a home is a solid option for people who plan to reside in a location for a long period of time and for those who are financially ready to pay for home repairs and a mortgage. However, renting is often a better option for individuals who need to build their credit, eliminate maintenance fees or want the freedom to relocate at a moment's notice.
People who choose to rent versus buy eliminate some debt from their future. Instead of signing a 30-year mortgage, renters are responsible only for utilities and monthly rent. Renters are not strapped down by a mortgage payment that may limit them from pursuing other financial options. Without a large mortgage holding them back, renters may be able to save money for the future and reduce the risk of defaulting on a loan. In addition, individuals with less-than-perfect credit can rent and build their credit instead of paying more interest with a higher interest rate for a mortgage, which is often the case when homeowners have low credit ratings.
Homeowners are responsible for all repairs, damage and malfunctions that require parts or service, and renters have less responsibility. For example, if the furnace malfunctions in a rental unit, the landlord is responsible for the cost of repairs. In addition, routine tasks such as maintaining the lawn, performing annual maintenance on appliances and upgrading appliances often becomes the responsibility of the landlord versus the renter. Renters are usually responsible only for maintaining a clean unit.
People who purchase a home are locked into their dwelling for a long period of time unless they choose to sell the house and are able to. Renters have more freedom to sign short-term leases for six months or a year, giving them the option to move to relocate or remain at the rental unit. Individuals who travel for work or who want the option to move to another city or state have more freedom to do so when they rent. In addition, people who are relocating for short periods of time when working temporary jobs often prefer renting as a convenient option to fit their immediate needs.
The decision to rent or buy a home can be complicated. Factors such as what you can afford, how much time and money you want to invest, and what type of environment suits your family go into the process. Buying a home requires more of an investment upfront, but many people prefer making a long-term decision. However, one benefit of renting is its flexibility.