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The Benefits of Renting vs Owning a Home
The median age for homebuyers is around 47 years old.
This highlights the fact that most adults between the ages of 18 and 35 choose to rent. When you look at the statistics, 65% of all adults under the age of 35 choose to rent.
While many attribute this to how expensive it is to buy a home, it’s also because of the massive costs that come with maintaining a home. When you add up all the costs of home ownership, the benefits of renting become clear. This is why you should consider renting instead of buying a property.
Want to learn more about the benefits of renting a home? Here’s a complete guide comparing homeownership with renting.
Owning a Home
Owning your own home is an important step for many people. While owning your own home may look great from the outside, there are tons of costs that come with it. Here’s a quick look at the costs of owning your own home.
Property Tax
When you own a property, you’re liable to pay property tax on the value of your home. This tax rate can vary from state to state, but it’s based on a percentage of your property value. This means that even if your home’s value increases, you property tax will increase as well.
HOA and Condo Fees
If you live in a condo or community, you may need to pay HOA and condo fees. These fees cover some maintenance, security, and general upkeep of your neighborhood.
Maintenance Costs
Maintaining a home is expensive. From annual roof inspections to plumbing and electrical issues, everything costs money. Many estimate that you should budget 1% to 2% of your home’s value on maintenance.
Homeowners Insurance
Homeowners insurance is essential, especially if you have a mortgage for your home. This insurance premium is based on your home’s value and can increase from time to time.
Mortgage Rates
Most homeowners buy their homes with the help of a mortgage loan. This loan is massive and is usually taken over 20 to 30 years. The most important part of the loan is the interest rate.
While some mortgages have fixed rates, others fluctuate. This means that your monthly payment could go up if interest rates rise.
Renting a Home
There are a few major benefits to renting a home compared to owning one. These benefits include convenience but can also save you money every month. Here’s a quick look at the most notable renting benefits.
1. Little Maintenance Costs
When you rent, you don’t have to worry about much maintenance costs. If something goes wrong with the plumbing or electrical wiring, the landlord will cover it. This means that you only need to cover small things that you end up breaking around the house.
2. Added Amenities
Some apartment complexes and estates come with added amenities. This includes things like a gym or pool. These amenities are available to you for no added cost every month.
3. No Property Tax
When you’re renting a property, you don’t need to worry about paying property tax. The owner of the property is responsible for this tax. This lowers your monthly costs significantly.
4. No Down Payment
Renting does require a security deposit. However, this is nowhere close to the amount you’d generally pay as a down payment for a home. This means that you can start renting quickly and don’t need to save for years just to rent.
5. Flexibility to Downsize
When you rent, you have flexibility. This means that you can downsize or upgrade whenever you want. If you need more space, you can just move to an apartment with more space.
6. Fixed Rental Costs
Signing a lease means that you agree to pay a fixed amount of rent every month. Leases are typically for one or two years. This means that you know exactly how much you have to spend on rent every month.
Even if interest rates rise, you don’t need to worry about your rent going up immediately. In most cases, you’ll notice rent going up when you sign a new lease with the landlord.
7. Tax Benefits
If you run a business, there are significant tax benefits to renting. This is because you can deduct a portion of your rent if you work from home. The same goes for any maintenance that you do at home.
Why You Should Rent a Home
Deciding whether to buy or rent is a big decision. However, the benefits of renting make it an incredibly compelling choice. At the end of the day, the decision should be based on your specific goals for the future.
If you’re looking to invest in property and want to plant some roots, buying a property is a great decision. Property is always a great investment and can rise in value over time.
On the other hand, if you’re younger and don’t know where you want to settle down yet, renting is perfect. This gives you the flexibility you need to advance in your career and help you save money for the future. In many cases, the savings can help you put down a bigger deposit when you eventually decide to invest in property.
Prepare for Homeownership
When you look at the benefits of renting, you’ll notice that it’s not the opposite of homeownership. If you find the right rental property can help you make homeownership more affordable in the future.
This is because you can save money every month by renting. These savings can help you build up a decent deposit for your home. This means that you don’t have to borrow as much money or pay as much interest to the bank when you buy a home.
Testing Out Neighborhoods
Renting also lets you test out different neighborhoods. This will help you find the ideal neighborhood that you want to eventually buy a home in. Taking your time and renting just makes the entire process easier.
The last thing you want to do is buy a home in a neighborhood that you don’t want to live in. Then you’d need to sell the home and take on even more costs as you move.
Transitioning to Renting
Now that you understand the benefits of renting, you may be wondering how to transition from homeownership. While many people think that this is a long, complicated process, it’s actually quick and easy.
The first step is to sell your home. The process begins with getting an accurate valuation for your property. In most cases, this would mean calling a real estate company or property inspector to look at your home.
However, there are modern alternatives that can evaluate your home quickly online. These platforms leverage data from the housing market to accurately value your home. This saves you tons of time and money since you don’t have to pay for an inspector to come to your home.
Companies like Memphis We Buy Houses make the selling process seamless. This is because you can value your home and get a cash offer in no time. Cash offers are always the best option since it speeds up the entire sale.
Finding a Rental Property
Once you have found a buyer for your home, you can proceed to find a rental property. There are tons of platforms out there that you can use to find the right apartment or home. You can filter the search to help you find a property in the right area.
Additionally, you can filter the search to fit your budget. When finding a rental property, you can choose the perfect home for you and your family. If you need three rooms, you can get a home with exactly three rooms.
As mentioned above, renting offers you flexibility. This means that you can move to another rental property if a better offer comes along. So there’s no need to panic if you can’t find the perfect apartment just yet.
All you have to do is sign the lease and move in. Now you can ditch the costs of homeownership and enjoy the benefits of renting.
Thinking About Selling Your Home?
As you can see, the benefits of renting are massive. Renting a home allows you the flexibility to move to another apartment, home, or city with ease. Additionally, it can also help you save money every month since you don’t have to maintain a home.
If you’re thinking about selling your home and transitioning to renting, we’re here to help you. Click here to get a cash offer on your home in Memphis, TN. If you have any questions, don’t hesitate to reach out to us today.
