Why Renting Can Be More Cost-Effective Than Purchasing A Home

For many Americans, owning a home is a lifelong dream; but renting can offer significant benefits for some more than others. This usually depends on personal circumstances and the availability of funds. Indeed as the rate of homeownership increases, that usually equates to an increase in the availability of rental homes. This means that both landlords and tenants can enjoy mutual benefits. So, are you considering renting? Well, maybe you should! And these compelling reasons below will reveal why you may want to delay purchasing your next home, in favour of looking for houses or apartments for rent.

No costs for upkeep and maintenance

Another advantage of renting property is that you do not need to be focused or invest in upkeep and repair. When you rent a home, the landlord handles the issues of maintenance, improvements, and repairs. Although you have the task of ensuring that you do not cause damage and that the property is well kept, issues such as dirty HVAC filters or broken pipes are for your landlord to fix and pay for. These expenses can pile up and be quite expensive for homeowners. However, it is essential to note that if you cause significant damage as a tenant, you would be liable to fix them- but this rarely happens since you would have made a deposit to cater for that.

No property taxes

Tenants do not pay property taxes! Homeowners have a considerable financial burden in the form of real estate taxes, which vary by jurisdiction. Simply put, property taxes are taxes placed directly on the property, per its value. This means that depending on the type of house and its location, its property tax can be quite high. This means that homeowners still need to make various payments even after building or buying their house!

Availability of amenities

When building your home, including various amenities such as in-ground pools, recreational areas, or even a fitness center may be quite expensive. This may mean you would have to ensure that you build your home close to areas that have these within the community. However, when renting, you don’t need to worry. You can choose to rent homes or luxury apartments that already have these features without incurring the cost of installing or maintaining them.

No down payment

The payment plan is also another advantage of renting. In most cases, renters must pay a security deposit equal to one month’s rent. And that’s usually the end of it. A deposit is also made at the beginning of their stay. However, if you do not damage the property, you will get refunded when your contract is terminated. It’s not so simple when paying for or buying a house.

When you buy a house with a mortgage, you’ll need a substantial down payment—usually approximately 20% of the property’s worth. Making a down payment means having equity in your property, which grows as the mortgage is paid off. And if you buy a property outright, you have a valuable asset that renters will never have. Even so, a down payment on a home is much greater than a security deposit on a rental. A $40,000 down payment on a $200,000 home is 20% of the purchase price. In December 2020, the average apartment rental in Pennsylvania was $1,350,801. Similarly, the average rent in Louisville, Kentucky  is between $1,018 and $1,424.  Renting is a preferable option for those who cannot afford a down payment.  

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