If you are in the market for a home, don’t be so quick to plunk down your savings on a down payment. Renting a house might be a better option than buying. Renting allows you to be transient should another job offer arise or another life event unfolds that sends you to a new location. Furthermore, renting has the potential to save you a considerable amount of money. Let’s dig into the pros and cons of renting a home.
The Pros of Renting a Home: Enhanced Flexibility
Perhaps the top reason to rent a home as opposed to buying one is the ability to move whenever desired. Though some home rentals require a six or 12-month lease, many are rented on a month-to-month basis. This way, if you get a job offer across town or in another state, you can terminate your lease and find new digs closer to your job. Furthermore, your significant other might invite you to move in. Perhaps you inherit a home. Maybe you just don’t want to make a lengthy commitment to a house. Rent a home and you will enjoy the flexibility you need and desire until the time is right to buy.
Pro: Maintenance is not Your Problem
Take a moment to think about all the things that have gone wrong with the apartments you have rented. Unless you rent a fairly new home, there is a good chance it will require ongoing maintenance. Home maintenance projects can prove costly and time-consuming. Rent instead of buying and home maintenance will be the landlord’s problem instead of yours.
Pro: You Don’t Have to Fork Over a Sizable Down Payment
Think of all the things you can do with the money you would have spent on a home’s down payment. You can use the money toward a new car, a down payment on an even better house in a few years or simply invest it. Investing the money might provide a superior return to a house that you flip after 5 to 10 years of ownership. After all, houses are merely wood, nails and brick on dirt.
Con: You Can’t Personalize a Rented Home
If you would like to add your own twist to your living space by painting the walls, adding a man cave or making another significant change, your landlord will stand in the way. Home customization is strictly for buyers. If you rent, you will have to leave the home exactly as you found it.
Con: You Walk Away From a Rented Home With Nothing In-hand
Once your home rental lease ends, you walk away empty-handed. Though it is possible you might receive all or some of your rental deposit back, the landlord will keep all of the money you paid in rent. If money is your primary concern, the better option might be using the funds you would spend in rent toward a monthly mortgage payment on a home you actually own. Though there will be added costs to close the home and handle maintenance issues, those costs probably won’t prove problematic unless you move within five years after purchasing the property.
Con: The Rent can Change
There is no guarantee the rent will stay at the current level once the lease expires. This is quite the contrast compared to a mortgage payment you can budget for years in advance. If you detest the idea of having to move to a cheaper home simply because the landlord decides to raise the cost of rent, you might be better off buying a home.