While a wise financial decision often involves owning a house, you should always consider the advantages of renting—as an alternate option to financial independence.
Historically, families have either needed to erect their own houses or rent a property from a third party. Although renting may not be your first choice, it can have many advantages. For some, renting might be a preferred option based on their financial situation. Below, we have listed six advantages of renting a property instead of purchasing a house.
It has to be the biggest relief of renting. When anything goes wrong, tenants call the landlord. Whether the roof leaks or a pipe breaks—the landlord has to pay. The average cost of home maintenance and repair costs nearly 2 to 4 percent of the property’s value, and it does not include additional expenses in insurance. In addition, repair expenses can get so high in a year that homeowners may even consider skipping maintenance which may result in the deterioration of their property.
In the short run, renting a property is more cost-effective. The monthly rent that you have to pay is typically lower than the amount you have to pay as EMI, enabling you to reside in favorable locations and relocate as per your needs—without having to commit to a hefty financial sum.
Unlike owning a property, renting needs a smaller upfront cost which often comes in the form of a security deposit—generally equivalent to three to four months’ rent. Theoretically, the security deposit is returned by the landlord when the tenant moves out, given they have not caused any damage to the property.
The cost that homeowners need to bear for a property’s down payment is significantly higher than the security deposit of a rental property. This benefit offers flexibility and financial independence— specifically to individuals who are in the nascent stage of their careers and are keen on exploring rather than wanting to get tied down to a property so early in their life.
The major advantage of renting a property over owning is that tenants are not expected to pay property taxes. The hefty burden of paying real estate taxes can be worrying for homeowners. With newer constructions getting bigger and larger, real estate taxes can be an unavoidable financial burden for property owners.
Renting a house instead of owning one will offer the benefit of flexibility. You can relocate anytime after your contract expires, as per your convenience and changing circumstances, without fretting about selling the property or being stuck in a specific location forever.
The value of property keeps fluctuating. While this surge and dip might considerably impact homeowners, renters are substantially less affected by it, if at all. The value of your home can affect the amount you pay as property tax, alongside your mortgage amount. On the other hand, tenants are not adversely impacted by these price fluctuations.
Before owning a house, you should carefully evaluate your long-term goals, personal preferences, and financial capacity to make a knowledgeable decision. Good luck!
