Not too long ago, renting was considered best for those who had either lower incomes or for students and new professionals who are starting a new life on their own. Or as a temporarily move until one was able to buy a house where he or she wished. Renting an apartment didn’t make much sense if one earned an income above average or had a family.
But the recent deep economic recession and so many home owners losing their homes, is changing people’s ideas of renting in a more positive manner. More people mid to higher income, single or with families, are now open to renting as long term life style as they find many advantages in renting:
1. Renting Is More Flexible: If you think your job or your spouse’s job isn’t either stable or if you have to relocate often, then renting is the most flexible solution for you. You can move almost whenever you want. Just make sure you sign short term lease so you don’t have to pay any early termination fees.
2. Your landlord is responsible for all the repairs: If there is something wrong with your apartment, in most cases your landlord is responsible for it. Unless it is a damaged caused directly by you, landlords are responsible to make repairs necessarily to your apartment at no extra cost to you. And if something can’t be fixed, they must replace it.
3. Your monthly rent is a lot less than what you would be paying as mortgage payment: Unless you pay a huge down payment, chances are your mortgage will be a lot higher than your rent and as long as you are making your mortgage, you don’t actually lose your home. That means that if you default a couple of payments, you could lose your home and you have thrown away all your down payments and high mortgages you have paid.
4. Owning a home isn’t always an investment: Home prices go up and down and recently more likely to go down than up. Also the value of a home is really depended on many demographic factors such as local job market and crime rate. For example your house could be in a good area now and 30 years from now, when you have actually paid off and has become officially your house, may no longer be considered in a good area and in that case your house value may not have increased as much as you would wish.
5. Renter Insurance is Cheaper: You don’t have to have an insurance when you are renting for the property because you don’t own it. So if something happens to it, it is responsibility of the landlord to insure it not you. But for your furniture and your other valuables, you are recommended to have “renter insurance” in that case is much cheaper.
In conclusion, buying a house is one of the most significant decisions you could be making in your life as you need to take many things into consideration. So if you are planning to buy a home because everyone tells you “buy your own place and don’t rent others’ “, think about the fact that you don’t really own your own house until you have fully paid it off and that could take a long time. Also it is very expensive to own a house as most of your income will probably go toward mortgage. If you rent, you have more financial freedom and flexibility to do other things, for example save money, put money in your kids college fund or even continue your own education or do many other things.