As you move through your early years as an adult and find yourself settling into comfortable routines, you may start to hear pressuring statements from others, whether they are friends or family. People who have opted to buy a house often see it as the best way to go, so they will suggest that you too could be happy making the big move and becoming a homeowner.
What is important to realize is that renting and buying are not straightforward in which one is best for any given individual. They represent the valuing of different things, but there are many advantages to continuing to rent long after you felt like you were "expected" to own property.
1. No Unexpected Maintenance Bills
One of the harshest realities of owning a home is the need for maintenance on various aspects of the home nearly every year. Often, these items are individually medium size expenditures, rather than one really big cost, so it doesn't make sense to send these bills through home insurance. Instead, they require both money and time from homeowners. When you don't have to worry about the maintenance on your rental home, you can focus your energy on the activities you prefer, whether that means picking up an extra shift at work (while your landlord fixes the hot water heater) or working out at the gym or enjoying nature.
2. Flexibility and Freedom to Relocate
It is hard to make the financial numbers work if you purchase a home and move within only a year or two - so much of what you've paid on the mortgage is interest that you don't gain much equity. With rent payments, you have the freedom after a year or two to choose a different rental at the end of your lease agreement. This flexibility makes it possible to move for a job opportunity, move to be closer to a significant other, or travel the world in between more stable stints in particular cities. Your freedom to move is one of the big advantages of renting.
3. Easy-to-Predict Financials
While variable rate mortgages and widely varying maintenance costs can make your housing costs a question mark as a homeowner, rental bills are refreshingly equal every month for the duration of your lease. If you fear that rents are going up in your area, you can still know that for 12 months you'll be locked in at the rate you set now. This can allow you to prepare for the future, saving for a potential rent hike next year, and help you feel more in control of your finances, whether you are early in your career or already very successful.
4. Better Utility Bills
While utility bills, ultimately, are dependent on a given house or apartment, there are many people who have lower utility bills while living in rentals. This could be, depending on the context, due to some utilities being wrapped into the rent rate, or due to there being fewer built-in light fixtures or appliances in a rental. While you'll have to estimate for yourself whether your utility bills are truly better, economizing in a rental isn't hard to do, given the options for multi-bedroom, one bedroom, and studio apartments.
5. Create a Positive Working Relationship with Your Landlord
One of the underrated aspects of being a renter is when you actually find a great landlord, rather than someone you don't really get to know. A great landlord will know your rental backward and forward, and they will be able to advise you if you aren't sure how to make the most of the space and amenities you have. While landlords often have strict rules for new tenants, many ease up on their tenants after a year or two of you being a great tenant. Depending on the relationship that you develop, you may be able to make decorative choices for your rental, giving you some of the freedom that would otherwise be reserved for homeowners. When you and a landlord get along well and you've both proven yourselves to each other, the resulting relationship can be very mutually positive. For instance, some landlords give a bonus to tenants who sign a new lease for a new year, because those tenants do them a favor by staying in the rental.
6. Make More Liquid Investments Than Homeownership Elsewhere
So many people would prefer to "build equity" in a house, but all that statement really means is that they see their homes as investments, a place to store value and watch it grow over time. While that is a noble goal, you can do the same thing with other investments: stocks, bonds, and mutual funds are all ways to invest your money while you continue to rent. What's more is that, if you decide you are ready to sell stocks, bonds, and mutual funds, it is easier and quicker to sell those items and they can be sold incrementally. With a home, you must choose either to sell the whole thing or not, and it often takes quite a while to complete the sale. Renting while investing in other ways is a very viable alternative to homeownership for building your nest egg.
7. On-Site Amenities of Rentals
If you enjoy having a swimming pool, a gym, and a clubhouse, but can't afford a mansion with each of those things in-house, a rental with great amenities can definitely deliver. While many apartment complexes contain excellent amenities to draw in new renters, the truth is that you'll often be able to use those amenities, since not everyone takes advantage of all the apartment complex has to offer. You can be one of the few who uses all that your rent encompasses.
8. More Desirable Neighborhood For Your Money
While this isn't always the case, it is often more affordable to find a rental in a trendy neighborhood than it is to pull together a down payment and long-term payment of a high mortgage in the same neighborhood. If you value the ability to, for instance, walk to nearby restaurants and attractions, and enjoy the neighborhood feel of an urban area, renting may be much more in reach than buying a home. If the market swings in your favor, it might be possible to buy in that neighborhood, but so many people discuss the trade-off between a downtown apartment and buying a home in the suburbs; if you don't want to move out, you don't necessarily have to if you choose to continue renting.
9. Real Estate Taxes and Insurance Are Major Expenses
While the core of one's mortgage payment might be comparable or even less than a typical rental of the same size, real estate taxes and the costs of home insurance are major expenses. Even if you have renter's insurance, it is likely less expensive than a home insurance policy. Property taxes are often steep and you shouldn't be surprised by the taxes that come along with homeownership. It can simplify your bills and free up some cash to choose to continue to rent instead of purchasing property and a home.
10. Put That "Down Payment Money" to Other Uses
It is true that one of the immediate things you can spend your "potential down payment" on is just... your regular life. However, it can be fun, as a renter, to start saving for your "down payment" and do other things with it. Did you want to invest in a friend's company? What about taking some time to travel or work in a profession that doesn't pay a lot but is super rewarding? Whatever it is, it can be fun to do the same kind of careful saving that a person saving for a house down payment would do, but then spend it on another thing that matters to you. Renting while you work toward this goal is a nice way to keep your options open.
11. No Risks of A Falling Housing Market
One thing that homeownership relies on is a housing market that goes steadily up. While this still mostly holds true, the recession of 2008 proves that housing can experience bubbles if too much credit is extended. It can be frightening to see a housing market downturn that affects the value of your home. As a renter, your net worth is less susceptible to the housing market since you haven't signed on to pay for a house for 15 or 30 years.
12. Scalable Based on Your Family Size
When you are living alone, many people choose not to purchase a home or to purchase a very small home, but in many cases, our family size changes. We find a significant other, we have children, we add or leave roommates... change happens in families and in friend groups. Having a rental means that you can scale up and down each year or two based on what you really need. Perhaps you rent a large home while you are raising children, but when they move out, you can fairly painlessly switch to a smaller space that requires less upkeep and gives you more time to enjoy your leisure.
Want to learn more about the benefits of renting? Contact us today at VerticalRent!