You may have heard arguments in favor of either renting or buying a property, and which is the smarter choice for you financially. But usually, these arguments overlook other factors, such as your evolving lifestyle, that can impact which option is ideal for you.
Below we’ll explore when renting is the more suitable choice, including if you are in a temporary location or position, if you can’t commit to a long-term investment, or if your finances simply do not make you a good candidate for a mortgage.
If You Are in Need of Something Temporary…
One of the biggest benefits of renting is the lack of permanence it offers for times when you are in need of a short-term residence.
Many people attend school out of state, travel for work, or take internships in another location, and the mobility of renting is perfect for their needs. It’s easy to find a spot to hang your hat for a few months out of the year, then move again when your job or semester is over. Buying a home does not offer that luxury.
Not only that, but if you have recently experienced a life change, such as a separation or new job opportunity, renting a property may be the only solution to your transitory situation. While you are trying to get back on your feet or saving up for a permanent residence, a temporary rental can be your in-between refuge until you figure out your next steps.
If You Are Not Quite Ready For Commitment…
Purchasing a home is a large financial and physical commitment. It ties you to one area for the foreseeable future and locks you into a mortgage payment until you choose to sell.
Renting, on the other hand, can be a monthly or yearly commitment, depending on your lease length. Those who are not quite ready to settle down choose to rent because they may eventually want to move to another city or town, they travel often, or they generally prefer the freedom of being a nomad, free to pick up and go whenever they want.
Along with owning a home comes the upkeep of the property. When renting, a landlord is responsible for the property and they deal with repairs, maintenance, and other concerns regarding the rental. As a tenant, you do not have to worry about arranging to fix or pay for broken appliances when they break down.
If You Finances Don’t Support Home Ownership…
To qualify for a mortgage, your finances must be in good order. This means having a good credit score and history, a stable job or income, and a down payment ready (anywhere between 5-20% of the home price). Not everyone has these qualifications in place to get a loan, and often, it can take a considerable amount of time and planning to get into a position for a mortgage to become a realistic possibility.
Not only do you have to consider a mortgage, but the costs of purchasing a property don’t stop there. Other fees include everything from a home inspection and insurance, to legal fees and furniture. Ultimately, your financial situation can make or break the decision to purchase, leaving you with no other option than to rent.
In some areas, renting is cheaper than buying a home. While you won’t be acquiring equity, you don’t have to contend with any costs outside of your initial damage deposit and tenant’s insurance, and your monthly rent and occasional utilities (if it’s not already included in your rent price)—leaving you with a predictable payment every month that gives you the ability to budget and save.
If You Prefer Flexible Surroundings…
Some people choose to rent because it gives them flexibility to live in certain areas, such as central or downtown locations, that they may not have been able to afford to purchase a home in. The proximity to amenities and transportation is another big bonus for those who rent urban apartments. Some buildings also have pools and gyms included, which is an incentive that buying a home may not provide.
Renting is a desirable choice for other reasons as well. If the economy changes, you can switch gears if you need to make adjustments, such as to find a cheaper place to live, get a new job, or lessen your commute time.
Lastly, some people just prefer the lifestyle of renting. They may have found a rental that feels just as much like home as any house of their own could and they wouldn’t have it any other way.
The Benefits of Renting Compared to Buying
Everyone’s lifestyle and financial goals dictate what type of accommodation works best for them. Renting can be ideal for your situation if you are in temporary circumstances or if you want to save, move, or have no desire to purchase a home right away. It can also give you the freedom and flexibility to adapt to any changes life throws your way and not be held to the responsibility of a mortgage or a long-term neighborhood.
Granted, buying a home has its benefits too, from control of your own property to the equity and appreciation of your home. For someone looking to put down roots and live in a home of their own, purchasing can be the right choice as long as you have taken the time to plan and save accordingly.
But in the meantime, before having your sights set on buying a home, you can always rent and enjoy the flexibility until you are ready to commit.
What do you like about renting? Would you prefer to buy?