While many people dream of owning their own home, there are also advantages to renting. Most people also find themselves having to rent before they are able to afford the down payment and mortgage of a home. So what benefits come with renting? What are you missing out on if you continue to rent instead of buying?
Pros of Renting Your Home
There are many benefits of renting an apartment or home rather than buying one. You have more flexibility, less financial commitment, more predictable expenses, and sometimes you have access to special amenities.
More Flexibility
One benefit of renting an apartment or home is that you will have much more flexibility in where you live and when you move. If you’re not sure you want to stay in an area, or if your job may move, renting can be the stronger option. Most rentals will have 6-month or 12-month leases that could turn into a month-to-month lease. Monthly leases give you the greatest amount of flexibility because you (usually) only need to give one month’s notice before moving. Renting is best for temporary situations.
Less Financial Commitment
Renting requires fewer upfront costs. The cost to move in is usually one month’s rent and a security deposit that is up to the amount of the rent. For example, if the rent is $1295 per month, you would pay the first month’s rent and an additional $1295 for the security deposit, which is $2590 total. If there are no damages when you move out, you will get the security deposit back. These costs are significantly less than what it would take to obtain a mortgage on a home.
Predictable Expenses
Your home expenses will be more predictable when you are renting. Your rent will stay the same during your lease term. If there are any increases, the management company will provide you with notice of the increase and when it will be in effect. Your renter’s insurance will likely be between $100 and $200 per year, and that shouldn’t change much year-to-year. You don’t have to worry about property taxes. Another bonus is that most maintenance needs will be the responsibility of your landlord or management company. Any plumbing or electrical problems won’t require significant out-of-pocket costs from you. In some cases, even your appliances will be repaired or replaced if needed.
Amenities
Sometimes renting also comes with amenities. On the less impressive side, you may receive free lawn care and/or snow removal. But some apartments may come with a community pool, fitness center, business center, dog park, and more. Some may be in gated communities or have other extra security measures. If these things are important to you, it may be more worth it to rent rather than buy.
Cons of Renting Your Home
There are also downfalls of renting instead of buying. You will gain no equity, rents may increase over time, and you have fewer customization opportunities.
No Equity
When you pay your rent each month, you are paying to live there that month and receive nothing else. When you make mortgage payments on the house, you are gaining equity in an asset. When you’re done with the mortgage, you own the house. However, with renting, you will be paying for as long as you live there.
Potential Price Increases
There are still potential price increases when you buy a house, such as increased property taxes or homeowners insurance. But with renting, it is possible that the rent will increase every year. You will receive advanced notice about all cost increases, but you will have no control over them. If the property changes hands or a new management company takes over, there may be additional costs as well.
Less Customization
When you rent an apartment or home, you are expected to leave that property in the same condition as you found it in. This means you shouldn’t really drill holes in the walls, paint anything, or remodel. You won’t be able to hang shelves or redecorate as much as you might like to.
Conclusion
While the “American Dream” may have you believing that buying is always better than renting, hopefully you now understand that there are many situations where renting is the better choice. Compass Property Management LLC rents properties in Lancaster, Chester, and Berks County Pennsylvania. Check out our available rentals to find the home that fits your current situation!
