Homeownership is a major goal in many people’s lives, but a lot of today’s young people are asking if owning a home and chasing the American dream is really the right way to go. Owning a home is an investment, sure, but it’s not the only type of investment available, and there may be some perks to renting that are just too good to overlook.
Deciding on whether you should own a home is a choice that is going to heavily depend on the housing market in your area. However, no matter where you live, here are 4 solid reasons for why you might want to consider renting instead:
1) You might save money
This is likely the number one reason why you might want to rent rather than to own a home. While conventional wisdom says that paying rent is a form of “throwing away” your money while paying your mortgage goes towards an investment, this conventional wisdom needs to be sorely re-examined.
The costs of homeownership start with what is often a hefty down payment, while moving into a rental property is initially much cheaper. Then there are the real estate taxes, the land transfer tax, the higher utility costs, and the much higher costs of homeowner’s insurance verses rental insurance. None of these costs constitute an investment.
Then, of course, there is the cost of your mortgage, which can be so burdensome that it deserves its very own section below.
2) You won’t have to deal with a mortgage
Mortgages didn’t used to be such a burden on homeowners. The understanding was that the mortgage would be paid off over 20 to 25 years, just in time for you to enjoy your home during your retirement years. Now, however, many people sign up for mortgages with much longer periods, and with monthly payments that they can barely afford. This has resulted in people still paying off their houses well into their 70s. Does this sound like the kind of retirement you want to be looking forward to? This is especially likely to happen to young people who spend the better part of their adult years paying off student loans.
3) Renting gives you more flexibility than home ownership
There is hardly a bigger commitment out there than the kind that comes with buying a home. It really only makes sense if you have a very steady and well-paying job that you don’t see yourself leaving for years to come. If your income takes a blow and you need to downsize, then doing so would be much easier if you are renting. The same is true if you need to take a job offer out of town.
4) You don’t have to deal with maintenance and repairs
Finally, homeowners are responsible for maintaining and repairing their property, but renters are not. You’ll never have to deal with the unexpected costs of a roof leak, hail damage, pipes bursting, or appliances breaking. Homeowners have a lot more to worry about, and it looks like the benefits just don’t seem to outweigh the costs.