Don’t Be In A Rush To Stop Renting
Renting can be something a lot of people look down on; someone isn’t able to own their own home, which is a common case in the modern day and age, but more crucially, it can be a financial mistake that keeps you renting for years to come.
However, seeing as most renters don’t have any other option, it’s key to try and change the perception surrounding this. After all, renting can be better than buying, in a variety of circumstances, and those circumstances are key to focus on.
If you’re currently renting, and you’re not sure if you’re in a good place financially, stop to think about your currently beneficial situation. It’s important not to rush out of the rental process, based on a whole host of different factors, and we’ve detailed them out for you below.
Fewer Taxes (and expenses!)
As someone who rents, you’re going to be facing fewer taxes than someone who owns their own home. After all, you don’t have any property taxes to deal with, and even if you’re paying things like income tax, you’ll have far less expenses to factor into your annual budget.
Similarly, while you’ll have to come up with a renting deposit, this is going to be far, far less than the amount you’d have to come up with if you were putting a deposit down on a home you wanted to buy. And when your tenancy is up, you’ll be able to get your entire deposit back, as long as you’ve left the place in good condition.
This can also be a good factor for ensuring you can live anywhere you want. Property taxes can hike up or down all over the country, and some homeowners have to pay thousands each year, based on the value of their home and the surrounding neighborhood. This can ensure someone stays in one place their whole life, because they simply cannot afford to face the taxes in a different location, even if they’d love to live there.
Following on from the point above, when you’re renting, you have much more choice over where you can go and what kind of dwellings you can live in. You can be flexible in your home choice; as long as you can pay the rent, or you can find enough roommates to help you pay the rent, you can go anywhere. However, if you’ve sold a house to pay off a mortgage, and you need another mortgage to get another house, you’re going to be tying your money up in knots.
Even at a basic level, living in a communal apartment complex means you have more access to ‘luxury’ amenities, such as a swimming pool or private gym, than if you were living in your own home and paying a mortgage. A lot of home owners can’t afford to get these things put in, but if you’re living somewhere like tropicana avenue, all you need to do is pop downstairs at little to no extra cost to you. All in all, that’s definitely a bonus of renting that homeownership will never have, and the choice shouldn’t be rushed away from.
No Property Value Worry
When you’re a renter, you won’t ever have to worry about the value of their four walls around you, because you’re not going to need to sell up and move on one day. Property values, around the globe, go up and down at all times – a house that was valuable one week could be worth 10% less than the asking price by the same time next week.
Of course, this is dependent on where you live and what kind of house you invested in, but it’s a general concern that everyone looking to get their foot on the real estate ladder worries about. Indeed, a lot of homeowners like to buy a dream home and settle into it for life, simply because they know they won’t get a good deal if they ever put the house on the market again. It can be much cheaper to renovate than look for a bigger and better place, and as a renter, that’s a situation you’ll never be locked into.
Similarly, the value of a home can affect how much is paid in property taxes, so even when your home is appreciating in value, the tax hike could be too much. The mortgage could also go up as well, but with only a rental agreement on your head, these costs aren’t going to be damaging your bank account.
Better Insurance Options
And finally, when you’re a renter, you’ve got a much better chance of taking out affordable, quality insurance. After all, you don’t need the same types of insurance as a homeowner would, and because of this, you have far less hefty payments to deal with. Most of all, you’ll never have to take out a lengthy home insurance policy, because you don’t own the building you live in, and it’s not your job to cover it against all eventualities.
Instead, you’ll simply need contents insurance, to make sure your own possessions are covered in case of events like a break-in or a flood. Either that, or you can get an insurance policy based on the fact that you’re renting, which could cost you less than $200 per year. For someone trying to save up to one day afford a home of their own, or to simply pad out their savings, this could be a game changing expense.
Renting: Good or Bad?
Definitely good! All in all, don’t ever be in a rush to stop renting and find a ‘bona fide place of your own.’ Move on when you feel you’re ready, and like you’re in a good place to do so, and only invest in a home and a mortgage when you’re financially secure! But in the meantime, keep on renting, because it isn’t nearly as evil an option as the financial world often makes it out to be.