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- For those who aren’t quite ready to purchase their own home, renting is a very viable alternative to buying.
- Renters get to save on upkeep and recurring expenses, and costs such as taxes, insurance, and maintenance are less of an issue as a renter.
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Renting a home can be an ideal option for those wanting extra flexibility and less responsibility. While buying a home can involve some serious saving and commitment, renting can help you maintain your flexibility and lifestyle.
Especially for those in expensive housing markets, renting a house can be a simple way to get the space you want without having to spend years saving for a down payment. Renting also allows you a bit more flexibility than homeownership would, whether you’re in a house or an apartment. With renting, you’re not tied to the property long-term, and you’re also less responsible for saving for repairs, paying for taxes and insurance, and keeping up with other expenses.
Renting gives you a home without any of the burdens of homeownership. It’s the easiest way to live in a house without the hassle – here are a few reasons why:
Renting helps you avoid some major expenses
There’s no doubt about it: Owning the place you live is expensive. And it’s not always small expenses that add up, either.
Things like a new roof and gutters cost Business Insider contributor Kate Dore about $7,800 for her home in Nashville, she writes. And something as seemingly simple as a crack in her living room ceiling cost her about $3,900.
When you buy a house, condo, or apartment, you’ll also need to be saving for repairs. With renting, you’re not responsible for upkeep and maintenance.
Renters insurance is much less expensive than homeowners insurance
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Renter’s insurance generally costs between $15 and $20 per month. Business Insider’s Tanza Loudenback says she pays less than $12 per month to insure her Los Angeles apartment and the belongings in it. The bottom line: It’s affordable.
Homeowner’s insurance is much more expensive – more like $100 per month.
There’s no down payment needed
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In even modestly priced cities across the US, it will take median income earners over 10 years to save for a 20% down payment, reports Business Insider’s Libertina Brandt.
According to data from Unison, it will take the typical earner about 12 years to save the down payment for a house in Columbus, Ohio. And for those looking to live in even more expensive cities, those time frames get even longer – in San Francisco, it will take the typical earner about 40 years to save.
While renters might need to save a security deposit, it’s bound to be considerably less than a down payment and closing costs.
Homeowner’s association fees generally aren’t your problem
In some neighborhoods, homeowner’s association fees can be pretty high. Realtor.com reports that the typical homeowner’s association fee runs about $200 to $300 per month. That’s a big expense, and it’s one that would really add up if you owned the home – but as a renter, you likely won’t be responsible for this.
You’re not stuck with any losses
Homes gain and lose value all the time, and it doesn’t always just have to do with the house itself. Neighborhoods can go up and down in value, for instance, or school districts can have a big impact on the house’s value.
These are things you’d have to consider if you were buying the home. You might not want to live in the same area if you were going to buy the property.
But as home value fluctuates, it probably won’t be affecting your monthly rent payment too much. Without having to consider these factors, there’s a wider variety of locations available, rather than focusing on where the resale market is heating up.
There’s no property tax to worry about
Property taxes can be a big expense: In New Jersey, Illinois, and New Hampshire, property taxes are over 2%, according to the Tax Foundation and The Fiscal Times. In New Jersey, for example, a $250,000 home and a tax rate of 2.38% would make for a yearly tax payment of $5,950.
Many states don’t have property taxes that are quite that high, but the more a home is worth, the more it will cost in property tax. And as a renter, that’s another worry you won’t have.
You’re not tied to it long-term
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If you’re not planning on staying in the same city for years, renting a house is the ideal way to go, as there are far fewer commitments.
When you buy a home, you should expect to live there for at least five years, say personal finance experts and authors Manisha Thakor and Sharon Kedar. Ideally, they say five years is enough time for housing prices to rise, and for you to sell the home and cover the costs of buying it initially.
And for those who can’t promise five years, it’s probably better to rent. Renting buys you the freedom to choose what you want in the future. If that means leaving to move across the country, you’re able to do that, no 30-year mortgage in sight.