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Renting vs. Owning
For decades Americans have been encouraged to buy a home. Especially in the real estate boom of the 90s, renting was often associated with “burning” money and poor investing. But is buying really always the better choice? Consider some of the advantages of renting a home:
- With renting comes flexibility. If you want to move out of your rental apartment, you are free to do so once your lease is up. If you own a home, you are tied to it until it gets sold, which can take months or longer.
- Renters are often criticized for not having assets like owners do. The truth is renters can easily have assets. Not paying a lender to borrow money for a home purchase means that renters are free to invest in other types of assets, for example a stock portfolio.
- Renting does not necessarily equal throwing away your money. Unlike owning, renting does not force you to tie up a significant portion of your funds, allowing you to invest it in other ways.
- The down payment--typically first and last month’s rent--and security deposit on a rental is usually significantly lower than the down payment required for buying a home.
- Some or all repairs and maintenance-related work on your rental home is generally paid for by the landlord. Homeowners, on the other hand, must pay these expenses out of their own pocket.
- Renting an apartment or house means not being responsible for paying property taxes and mortgage interest like homeowners are.
If you’re not yet convinced about the financial advantages of renting, consider the fact that “cashing in” the wealth you’ve accumulated through a home purchase requires selling the home and moving. Add to that not needing to worry about foreclosure if you miss a mortgage payment or losing your investment if the market declines--renting is starting to look a lot more attractive, isn’t it?
Interesting in renting an apartment or house in DC, Virginia or Maryland? Contact Urban Igloo today to learn how we can take the stress out of your housing search.
