Last year, after our home went on the market in winter and then sold days later, we found ourselves needing to find an apartment in which to live and fast. Even though we would eventually be relocating to another state, a rental was a must.
After 16 years of home ownership, renting was refreshing. We happened to rent where mowing the lawn, shoveling the walks or plowing the driveway was no longer our responsibility. When the dryer stopped working unexpectedly, we didn’t hire a handyman—the apartment community took care of it. I could definitely get used to the conveniences of renting.
We eventually moved into a home we’d purchased. But during our time in that rental, I began to understand the attraction of renting versus owning. We discussed that if we ever had to move again, we would seriously consider renting.
Turns out there are many benefits to renting—financial, emotional, timeline, convenience and more. Perhaps most importantly renting is a great idea when you move to a new place, renting gives you the time to explore the city and decide where you really want to live. Then you can make sure that you are going to stay before they take the plunge to purchase a home.
Here are eight reasons why you may want to rent a home versus buy one.
1. Can you afford a down payment?
When buying a home it is optimal to be able to put 20 percent down. In expensive real estate markets, that number may simply be impossible to pull off. Even if you can get together a down payment, can you afford the mortgage? Common charges and maintenance fees on top of a mortgage plus unexpected expenses can really add up.
2. Are you on a tight monthly budget?
Those unexpected expenses, such as repairs, can throw a monkey wrench into your monthly budget. Due to the fact that costs like repairs and taxes are included in a rental, housing costs can be more predictable in a rental.
3. Does your credit score need work?
Many times would-be homeowners choose to rent so that they can use the time to repair their credit scores. People with low credit scores can find it very difficult to buy a home, so even if it’s in your long-term plan to purchase, you can spend time renting while your credit history recovers. It can take several years for certain credit problems to work their way out of your file, and during that time you can reestablish your creditworthiness.
4. Do you want to pay less for insurance?
Rental insurance almost always costs less than homeowners insurance. Paying less each month for insurance can really help someone on a tight budget.
5. Do you need/want flexibility?
It takes the average American homeowner a little more than two years to “break even” when buying a house, though the time needed in more expensive real estate markets is more like five years. Even with this in mind, if you are not planning to stay in the home at least three years, you should be renting. So if you need flexibility to pick up and move—such as if you are in the military—or you simply do not want to be tied down to one place, renting makes the most sense. A recent Trulia report on millennials and homeownership says that this demographic typically moves every five years, thus explaining their preference for renting versus owning.
6. Are you nearing lifestyle crossroads?
Whether you’re about to start a family or become empty renting might be right for you. Do you want to live in an urban environment for now, but maybe move to another area with schools and amenities for children later? If so, you may want to rent until your lifestyle evolves.
7. Can you fix things?
When you own property you have to learn to be handy. You are the one responsible for all repairs. Of course, you can always pay for someone to do those repairs, but if you’re on a budget, that may not seem so attractive.
8. Do you mind yard work?
Suddenly, lawn work and snowfalls become less attractive when you have to do it. If you rent, you don’t have to worry about any of this. It really does take a load off your mind (and your budget) when mowing, plowing and more is suddenly someone else’s responsibility.