FinanceReal Estate

6 Reasons It’s Financially Better to Rent Than Buy Property

Most Americans consider buying and owning a home as the attainment of the American dream since time immemorial. Maybe this has been your dream, too. Nonetheless, have you ever considered the benefits you can have paying rent as a tenant? 

Here are some benefits that renting has over buying and owning a home.

1. No Maintenance and Repair Costs

When you rent an apartment, you are only responsible for your rent. Your landlord is responsible for fixing all damages that your apartment may have. In addition, your landlord is responsible for the costs in case of any form of improvement. If such maintenances are higher than your rent, you don’t have to worry about them after paying your rent bills.

Since the landlords assume such expenses, they save you the trouble of going beyond your monthly budgets. Thus, you won’t have any obligation to look for maintenance experts.

2. Easy Access to Amenities

Most rental properties have additional amenities that would otherwise be costly when you access them independently. For instance, when renting, you may have access to a standard in-ground pool. Luxury apartments like Revo may have other cool amenities like fitness centers, pet spas, and firepit lounges. If homeowners want to access these luxuries, they must incur additional costs.

On the contrary, these luxuries come as a bonus to you as a tenant when renting. Thus, revenue authorities exempt you from these expenses. Ultimately, you’ll end up saving more financially than a property owner.

3. No Real Estate Monthly Taxes

One of the challenges property owners face in the current environment is the real estate tax burden. Depending on the amount these owners receive from rent dues, they are responsible for filing their returns and paying taxes. When the owners accumulate these taxes annually, they add up to thousands of dollars.

Besides, when these parties acquire larger properties, the revenue authority holds them accountable for the additional taxes. However, if you are a tenant, you are only responsible for your rent payments. Therefore, renting reduces the overall financial burden you incur monthly and yearly. In the end, you can set aside these finances and save them for other projects.

4. No Initial Down Payment

When acquiring a property, you need an initial down payment without which you cannot reside in the house. However, you typically only need to pay a security deposit equal to one month’s rent when renting a property.

Normally, this amount is refundable, provided you don’t destroy any part of the property. Renting option is convenient if you don’t have enough money to purchase a property or make a down payment.

5. More Flexibility

Renting is more flexible than homeownership. For instance, when renting an apartment, you have the option of choosing to live in specific areas. Besides, you can easily access more affluent areas when renting than when purchasing a property.

In most cases, when purchasing a property, you’re likely to consider more affordable rather than affluent areas. Therefore, most buyers buy residences in the outskirts of towns while renters access the heart of the big urban centers.

Additionally, renting has the flexibility to downsize. When renting, you can easily shift to a cheaper house than owning a home. The homeownership costs may weigh down on you, but you may not find your property buyer immediately. However, you can easily get another rental property after the expiry of a lease agreement.

6. Ease of Budgeting

Leasing agreements last for a specific period, or term. Within the period, you can easily budget your earnings to include a constant amount of rent. The landlords must honor the lease agreement for a specific period. Even though these landlords add their leasing prices, they have to notify the tenants beforehand. Therefore, as a tenant, you have time to prepare for these changes.

On the contrary, property sellers can revalue the properties, depending on the impending economic situation. Thus, as a property buyer, you end up spending more than your initial budget.

Concluding Remarks

Property ownership may be beneficial in the long run, but it comes with various disadvantages. If you intend to avoid these disadvantages, you should opt for rentals. Some of the advantages of renting over property purchase include accessibility, flexibility, ease in budgeting, and reduced taxes. Also, rentals have no initial down payment and maintenance costs. Given these factors, you may consider rentals over property ownership.

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