Top 10 Reasons Why Renting Is Better Than Buying
Owning a home of your own is everyone’s dream. Especially when you want extra space and privacy, and you are looking to settle down with your family. However, not many people fall under this category; some prefer to rent rather than buy or build their own homes.
Renting and buying a home/apartment have their financial advantages and disadvantages. Therefore, this article will cover the general benefits of renting over buying/building your own home. If you are still undecided on whether to buy or rent, read on to see the ten essential advantages of renting over buying.
Ten advantages of renting
Here are ten essential advantages of renting a home/apartment. These advantages should clearly show why many people prefer renting rather than buying.
No maintenance costs or repair bills
Should you choose to be a homeowner, consider that all repairs and maintenance costs are yours to carry. Maintaining a home to preserve its glamorous appearance and make it safe for you and your family to live in isn’t easy. You should also always be aware of the state of your home since it is your duty alone.
It will be a challenging task, especially when the home/property is big: that includes the house you live in, the compound, and any other structures in the compound. The bigger the property, the more challenging the task of maintaining it. Financially, this can be a handful, especially if and when you always don’t have the required finances.
You can also engage the services of other people who will help you, such as groundskeeper, landscaper, plumber, electrician, fumigators, etc. However, you will be paying for all these extra services.
Should you choose to rent, you will not have to bother about all this since the landlord or property owner will be in charge of all the repair and maintenance activities and costs. However, you will be held responsible for any damages you have caused personally when renting.
More flexibility as to where to live
Most people who opt to buy homes wish to settle down, i.e., they won’t be moving around a lot. Most of these people are also trying to raise a family and therefore prefer not to move their families from one house to the next. Retirees also fall under this category since they are probably in old age, they don’t work anymore and all they want is to settle down. Consequently, they will look for a place that suits their taste and preference and desire to settle down and make it their home.
On the other hand, some people move a lot either because of work or they still want to explore as many places as possible. Many young people fall under this category since they have very dynamic and, at times, temporary tastes, preferences, and needs. They, therefore, prefer renting out an apartment whenever they move since it is much cheaper and convenient to their situation.
Renting out offers you this flexibility and ability to explore as many places as possible.
Few concerns about decreasing property value
Owning your own home/house is like having an asset. This fact has always been one of the most critical factors that have made many people own personal homes/houses. However, it is essential to know that owning a home has a downside. The value of the house can either appreciate or depreciate with time.
It all depends on how the economy of the country or region reacts to inflation and the increase or decrease of construction materials prices. In case the value of your house appreciates, then you stand to benefit, for example, should you want to sell it or take a loan against it.
As a renter, you need not bother yourself with such issues since you aren’t the house owner. Whether its value appreciates or depreciates isn’t your concern since you can always move out should the landlord increase the rent. This particular reason isn’t well known to most, but it is essential to consider whether you are renting or buying.
Flexibility to downsize
The size, location, and quality of the house you wish to rent depend on your financial capability, i.e., how much you are willing and able to spend on monthly rent. Therefore, you can always move into a house in line with your budget. This factor always influences the renting behavior of people in each locality.
However, if you opt to be a homeowner, you should be prepared to stick to your home, and in the event your finances depreciate, it will be hard for you to downsize. You will first have to sell your home, and hopefully, its value won’t have declined; that way, you can recover most, if not all, of your money.
Therefore, as you can see, downsizing for homeowners isn’t an attractive option. It isn’t straightforward, and it might take time to find a buyer for your house. On the other hand, renters only make a quick decision, pack, and leave for the next affordable home.
Lower utility costs
Although house sizes vary, most of the time, rented houses/apartments are much smaller than owned houses/homes. It’s everyone’s dream to own their own home someday. However, many people usually don’t consider the utility costs of keeping that home well maintained.
Homeowners have to put up with higher utility costs, unlike renters who usually live in compact homes that are much smaller. Some of the utility costs include electricity, garbage, water, and sewage bills, to mention a few.
Access to facilities
Another financial benefit of renting is having access to facilities that would otherwise be an expensive expense. Luxuries such as an in-ground swimming pool, a gym, and a kids’ playground are everyday items for rental apartments nowadays.
A homeowner would probably have to pay more for installation and upkeep if they wanted to use these amenities.
No real estate taxes
In Kenya, the Rating Act allows local authorities to tax land, land and improvements.
(e.g., buildings). As a homeowner, you need to be aware of the amount of tax you should pay, either monthly or yearly. Failure to pay this tax will lead to severe issues with the law.
However, if you are a renter, worry not. You are exempt from this tax type since you aren’t the owner of the building you are occupying. As long as you pay your monthly rent and other taxes other than property tax, you won’t have a problem with tax authorities.
No down payment
The upfront cost is another area where renters get a better financial deal. Renters generally have to pay a security deposit equal to one month’s rent. And that’s usually all. Theoretically, if they haven’t harmed the rented property, they will get their deposit back when they leave.
Unlike renters, homeowners must pay an upfront deposit when purchasing the house. Usually, the down payment is a percentage of the total price. Since buying a home isn’t cheap either, the down payment can be a significant amount that’s incomparable to the renters’ security deposit.
Fixed rent amount
When renting an apartment, the most critical step is to sign a rental agreement or lease agreement. In the agreement, there should be a clear indication of the exact amount of security deposit plus the rent you must pay monthly. This factor is very enticing to most renters; they can always budget and make the payments easily.
Unlike renters, homeowners who take mortgages to buy their homes must also pay monthly fees. Some of them take fixed-rate mortgages; that way, they know the exact costs to pay monthly. However, not all have this deal, so the amount they are expected to pay monthly varies.
This singular factor always makes people consider renting rather than buying, especially with mortgages, and renting offers calmness and peace of mind as long as you always budget for your rent.
Lower insurance costs
Your home and belongings are protected against unforeseen events by home insurance. It covers you against theft, damage by extreme weather, fire, and other losses. It will also assure you that you have a fallback plan in case any risks happen.
Homeowners like having a home insurance policy, unlike renters, since most of the time, the buildings they live in are always insured by their landlords. However, renters can equally opt for an insurance policy covering their house’s property.
Home insurance plans vary in cost depending on the property’s size and scale. Homeowners pay higher prices since their properties are often much more significant than rental apartments. Plus, there are many things to insure within that property, i.e., the main house, other structures within the compound, and contents of the house and other facilities.
To sum it all up, renting is an advisable option for people who don’t wish to take risks, and their financial muscle isn’t substantial. You should consider the factors listed above before deciding whether you want to rent or buy. It depends on your situation and desire to move around or settle down. Make a decision that is best for your situation.