Renting is often the first step before home ownership. But when is it time to make a move to buy instead of signing another lease? The pros and cons of renting a home may help you decide.
Maybe you just graduated from college. Perhaps you just moved to town. Regardless of the why, looking at the pros and cons of renting might help you see the big picture. Let’s start with the pros of renting:
- Limited responsibility. As a renter, if something breaks or needs repairing, you tell the landlord who in turn handles the expenses and the repairs.
- Renting can be budget friendly. To clarify, renters know exactly what they owe each month without the worry of unexpected home repair expenses. This helps you plan and stick to a budget.
- No down payment. Not having to cough up a large lump sum of money for a down payment is one of the pros of renting a home that’s hard to argue with!
- More flexibility and freedom. For example, renting offers the comfort of being able to make a quick move if needed. Leases typically range from 12-months to 24-months but can be month-to-month for a higher cost.
- Good for anyone who travels a lot. For those who travel often, renting allows them to do so easily without the worry of property management.
Now, it’s time for the flip side.
- Not building home equity. Oftentimes, people say renting is throwing money away. While that is not exactly true (as you are paying for a home whether it’s rent or a mortgage) what they mean by that is when you rent, the home is not your asset. When you pay mortgage toward home ownership, you are building valuable equity.
- No tax benefits. Simply put, there are no tax benefits to renting.
- Lack of stability. When renting, the landlord can increase the rent at any time. Moreover, you could be evicted at any time and not necessarily with much notice.
- Less opportunity for customization. When it comes to picking a new paint color for the walls or making any aesthetic change, renters usually need the landlord’s approval. On top of that, often restrictions imposed by the landlord or property management company will make any allowable changes limited.
- Bound by the terms in the lease agreement. You are obligated to keep the terms of the signed agreement. That could even mean restrictions like no pets!
If you are struggling to decide what’s best for you and your current situation, these pros and cons of renting home may help make the decision easier. Thinking it’s time to buy? Reach out to a trusted local Realtor for guidance!
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