Is buying a home one of the items on your bucket list? Well as good and as phenomenal as it sounds, buying a property is not always a good option. It gets all narrowed down to the fact that how financially awesome you are. Moreover, with all the changing environment, homeownership is kind of overrated. Instead of getting financially burdened and having incurred all kinds of loans, some people are much better off renting. There is no need to fulfil all social standards if your conditions (mental, physical, and financial) do not support them.
There is not an inch of doubt that having one’s own house is amazing. However, give your finances some time to get comfortable with such an investment and widen your thoughts. Here are the top 10 Reasons to Rent Instead of Buy a Home:
1. LOWER LIABILITY- Do you understand what Liability means? It is the state of being legally responsible for something, especially an amount of money owed. It results in future sacrifices of economic benefits that the entity (individuals or business) is obliged to make to other entities as a result of past transactions or other past events. On average when someone buys a house, the EMI generally is around Rs.30k- Rs.40k. So, you can understand that if you are not financially ready to buy a house, then how many sacrifices you will have to make EACH month, just to cover up your EMI. On the other hand, if you rent a house, the range of payment will be Rs.10,000-Rs.50,000, everything depending upon the location, facilities, furnishing, society, number of rooms, square foot area, and so on. Moreover, renting won’t burden you with house tax and other legal issues that are part and parcel of property ownership.
2. RELIEF ON REPAIRING COSTS– It is a sure fact that once in a while you have needed an electric repair, furniture repair, experienced seepage issues, clogging issues, pests attack, and other household-related problems! So, one of the benefits of renting a home is that there are no maintenance costs or repair bills. When you rent a property, your landlord is responsible for all maintenance, improvement, and repairs. If an appliance stops working or your roof starts to leak, you call the landlord, who will fix or replace it. On the other hand, you will be responsible for all home repairs, maintenance, and renovation costs if you own the house. These repairing costs will just keep adding to your house-related expenses, on top of your EMI.
3. FLEXIBILITY IN CHOOSING WHERE TO LIVE- If you own a house in a particular area, you will always hesitate to change your house even in dire needs. How will these so serious needs arise? Suppose your workplace is 20-40 km away from your home, you will have to travel so much every day. If your children’s schools are that far, they will have to travel every day that far! So, you will be restricted to live where your property is and keep incurring daily travelling costs. On the other hand, renters enjoy too much flexibility on this matter. They can choose their house with respect to their workplace and children’s school distance. For that matter, even if there are transfers across the country, renters won’t face any problems regarding this.
4. FIXED RENT AMOUNT- Property prices have increased exponentially in comparison to Rents. So, if you don’t have a job which allows living in the same city, you can re-consider your options. Property tax affects homeowners but doesn’t bother tenants. During your lease, the amount of rent that you will have to pay will be fixed. This will help a great deal in stabilizing your budget. You can budget efficiently. Renters just have to pay the monthly rents and leave all house-related (property-related) expenses to landlords or landladies as discussed earlier.
5. NO DOWN PAYMENT REQUIRED- What does this term mean? It is an initial payment made when something is bought on credit. Many times, a down payment, costs people their whole life savings. So, this is another finance-related area where renters are benefitted. When someone purchases a home with a mortgage, a down-payment of 20% of the property’s value is required to be paid by the owners. This is much more than a rental security deposit. Renters generally have to pay a security deposit equal to one month’s rent, a deposit that will be returned to them when they move out, provided they haven’t damaged the rental property. So, having to pay a rental security deposit is better for people who don’t have enough money for down-payment.
6. SELLING A HOME- Suppose you got transferred from your current location to a different location across your country. If you were living in your own property, you would wonder- What Now? Should you label your house as “Available for Rent” or “Available for Sale” or should you leave it just like that, which would not make sense, until your return to your place probability is very high. Suppose you want to rent your house, then it is very difficult to find the ideal tenant, who would maintain your house just like you did. Then there are tons of agreements and other paper works. And in another scenario, you want to sell your house. It is so difficult! In a down market, selling your home can be downright difficult. However, if you live as a tenant, you would never face such a dilemma. Moving will never be that difficult, with regards to this reason too.
7. PROPERTY TAX- In addition to income tax, property owners are charged with Property tax annually. These taxes can be a huge, burden on owners and drain them financially if the owner is not that rich. However, these taxes are determined based on the estimated property value of the house and the amount of land. Renters don’t have to pay these taxes, adding another perk of renting than buying.
8. YOUR HOME WON’T BE “YOURS”- Does this phrase makes sense? Yes, it does! It is a big moment for you and your family when you buy yourself a big, nice house. However, if there is too much financial burden and you fail to make mortgage or tax payments more than permitted times, the house can be easily taken away from you. So, reiterating again, unless and until you are financially sure and completely ready to make such a huge investment, Renting is always a better option.
9. NO REASON TO WORRY ABOUT DECREASING PROPERTY VALUE- Property values go up and down, and while this may affect homeowners in a big way, it affects renters substantially less, if at all. Your home value can impact the amount of property taxes you pay and the amount of your mortgage. In the housing market, renters may not be as adversely affected as homeowners.
10. RENTING IS NEVER RISKY- Buying a home is an investment, and investments carry risks. When you rent, you don’t have to worry about the market crashing and other related expenses, or that a costly and unexpected home repair will wipe out your savings account. Even if there are risks, the biggest risk you will take on with renting is usually just whether or not you’ll be happy with the place that you rented, and that’s a risk that most of us can afford to take.
So, Renting and Buying a Home comes with their own sets of Pros and Cons. You just have to figure out your priorities and finances, and then you will surely have a clear picture in front of you. There are a lot of responsibilities associated with buying a home. If you are willing to take that much responsibility, you are good to go. However, if you have even the slightest doubt, there is no need to hurry. Give time to yourself and go for Renting! With all the 10 benefits listed above, it is clear that Renting is not that bad an option and sometimes even better than buying a home.
Wish you Luck!