Should you Rent or Buy? Is Rent Money Really Wasted Money?
Ask just about anyone who rents, and they’ll tell you that they can’t wait for the day they can stop throwing their money away on monthly rent and just buy a home. However, is there any truth to the assumption that renting is just a waste of money? Are renters really making a poor financial decision?
With more and more people choosing to keep renting, it’s time to examine the conventional wisdom that surrounds the decision to rent or buy. More renters are choosing to keep renting, and not necessarily because they have no other choice. Here are a few great reasons to consider your choice to rent as the right decision for your busy lifestyle:
1. The Freedom to Leave
Home sales are a lengthy process. If you’re not sure you’d like to remain in a certain place for years to come, consider renting. In the long term, you’ll have more freedom and more cash, because there is no guarantee you wouldn’t lose money if you bought a home and then had to sell it.
2. Protection from Hidden Costs of Ownership
Sure, on the surface those monthly mortgage payments may look downright cheap when compared to the cost of rent. However, you would also need to pay for maintenance on the home, property taxes, homeowner’s insurance, realtor and lawyer fees, HOA fees, interest and more. On top of that, many rentals include some utilities such as water or garbage collection. Homeowners will need to pay for all the utilities every time.
3. Time Savings
How much time would you like to spend taking care of your home, or making improvements on your home? Homeowners often spend a great deal of time addressing maintenance issues that pop up. Are you savvy on repairs and ready to take care of a leaking roof or a furnace that stops working in winter? If you’d prefer not to be in charge of these things, then renting is definitely for you.
Ultimately, the decision to rent or buy is a personal choice that depends on a variety of lifestyle factors. Here are a few questions you should ask yourself when faced with this choice:
- How long do I expect to stay here? If you do not plan to stay in one area for at least a few years, then renting may be the choice for you. The process of buying and selling a home may tie you into that area for longer than you desire.
- How stable am I with my current job and lifestyle? If you are looking to change your career or lifestyle significantly, it is better to rent until your life is more stable.
- Do I have enough savings for a down payment, repairs, and other costs associated with buying? If not, the decision to purchase a home might cause undue financial strain. Renting until you can truly afford to buy is a wise choice.