9 New Reasons To Rent Instead Of Buy

Buying a house or a condo is a big decision. Are you willing to commit the next 20 or more years to paying off your home or dealing with the stress of selling? For some people, buying is the best choice, but there are many reasons renting might be the better option for you besides the ones you hear all the time. Before you subject yourself to the judgment of a mortgage officer and sign on a realtor’s dotted line, consider these scenarios that make a monthly rent check more appealing than a monthly mortgage payment.

  1. You don’t know where you’ll be in five years

    One of the best aspects of renting is the flexibility. When you’re young or figuring out your next move, you may not be settled enough to really commit to a house. Selling a house before you’ve lived in it for a five-year period doesn’t make financial sense. Closing costs often come in around 10% of the price of the home, so it will be five years before you make up for those costs. If you’re not sure whether or not you’ll be sticking around that long, renting is the smarter option.

  2. More rentals will soon be available

    Fannie Mae and Freddie Mac have a lot of homes on their hands that were foreclosed on — about 210,000 to be exact. To get rid of them, the agencies are taking bids for bulk purchases of the homes in certain areas, which will largely be turned into rental properties. This means lots of renovated rental properties will likely soon be opening up for tenants in places like Southern California, Atlanta, Chicago, Phoenix, and other cities, potentially bringing rent prices down.

  3. You’re retired

    There are plenty of things to consider when you retire, and where you’re going to live is definitely one of the most important choices. While homes are traditionally considered to be a wise investment, given the current condition of the housing market, your house may not appreciate significantly within your lifetime. Renting provides you with the benefits of not having to perform your own maintenance and not leaving behind a house for your family to sell once you’re gone, both of which may become more important as you get older.

  4. You’re new to the city

    When you’re making a big move to a new city, you might think you’ll feel more settled if you get a place that belongs to you right away. But you might want to think twice about that. You may find you don’t like your job or the city and want to move. You’ll also get a much better feel for the neighborhoods you like once you’ve lived in a city for a year or so. Your coworkers and friends can tell you about the cool hangouts, school districts, and reputations of the areas, and you can take some time to gauge where you enjoy spending your time. If you rent, and find your new neighborhood is completely different that what you expected, you can pick up and move. If you bought, you’re out of luck.

  5. Homeowners don’t get as many deductions as you think

    One argument people use to convince you to buy a home rather than renting is that the interest on your mortgage is deductible while your rent provides no such benefit. But this deduction is often overemphasized. You can only claim it if your individual itemized deductions equal more than the standard deduction. And it’s likely this deduction won’t apply later in the life of your mortgage since the interest payments decrease as time goes on. People also sometimes confuse the deduction with a tax credit. A credit will give you a specific dollar amount off your tax bill, while a deduction will just decrease your taxable income.

  6. You want to live with friends

    Ever seen an episode ofJudge Judy where former friends are suing each other? That’s how you could easily end up if you decide to buy a house with a buddy or two. Initially, it probably makes a lot of sense to pool your resources and get a house you really love. But at some point, complicated legal issues will probably arise. While you can be joint tenants, much like a married couple would be, it’s more likely that you’ll be tenants in common where each person has equal right to possession of the property. You’ll want to make sure you have proper contracts laying out what will happen if one roomie wants to sell, dies, or can’t pay the mortgage. Or you could save yourself the hassle and just rent.

  7. It’s easier than buying if you have bad credit

    Taking out a loan, especially a large one like a home loan, can be scary if your credit is less than stellar. If you want to buy a house, you’ll have a harder time finding a bank to finance you, and even if you do, your mortgage will likely have a higher interest rate than it would if your credit was good. You also might not be able to borrow as much as you need to live in your ideal neighborhood, having to settle for something more unsavory instead. If you decide to rent with bad credit, you only need to win the approval of the landlord, who has much less riding on your credit score, and you can live in the area you want interest-free!

  8. You can afford amenities

    If you tell your realtor that you want a house with a pool or gym in a low price range, they’ll probably just laugh at you. But you can expect to get these amenities and many more at seriously affordable rates when you rent an apartment or condo. You’ll save money on gym and pool memberships, and you might also even find a place you love with even more great perks, like a washer and dryer included in each unit or a rec room that can be reserved. You may not have a whole house to call your own, but you’ll be getting more bang for your buck.

  9. You’ll have more free time

    When you live in a rental home, your honey-do list gets a whole lot shorter. You’re not responsible for repairs that keep your home in livable condition, and depending on your lease and agreement with your landlord, you may be able to get off scot-free for even minor repairs. This will free up all that time that you otherwise would’ve spent fixing leaky faucets, broken shingles, or whatever other unsightly damages you or your wife found around the house. Here’s to living a low-maintenance lifestyle!

     Written By: RentersInsurance.com

 

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