What are the advantages of renting a home?
- No maintenance fees
- No property taxes
- Renting brings flexibility
- Less risk
- Smaller initial capital needed
This post is more about the benefits of renting. I have a post about the benefits of owning your property. If interested, you can read it here. Let’s dive right into the benefits of renting.
No maintenance fees
Pretty much every maintenance and repair cost belongs to your landlord. Your only concerns are rent, electricity and water bills. There can vary as well. Some can include those to the rent as well. Unless the damage your property faces is caused by you, the repairing should not be your concern.
Organizing the repair process is also your landlord’s job. You don’t really have to do anything, unless they will renovate something bigger, and you have to move away for a while.
No property taxes
Property taxes are also your landlord’s concern. Of course, they will be compensated in the rent you pay for them; renting is not charity after all. But again, one less thing to worry for you. You don’t have to worry about property taxes rising. If your landlord increases the rent too much, you can just move out.
Renting brings flexibility
Renting brings flexibility about where you live. It is much easier to move out of a rented apartment than it is to sell your own property. You might, after a few months of living in a new city, realize, that this isn’t the place you want to be living in the long term.
There might be a minimum number of months you have to live in that apartment, but still, it is much more flexible than selling your home.
When you own the property, you live in, it brings much more risks. What if interest rates rise or the apartment burns down? There are of course ways to defend yourself against it by interest rate caps and insurances, but even if you had insurance, they could find a way to blame you for the fire and cover nothing.
By just renting the apartment, you don’t really have to worry about interest rising or fighting with insurance. You should have insurance yourself too, but they are much cheaper for the person renting the apartment than they are for the landlord.
Smaller initial capital needed
When buying a property, you could need a lot of cash up front. When renting, there can be some initial deposit, but this can be anything between one month rent to three months. It varies, but I can almost guarantee, it will be lower than the down payment for a house. You can even live in the nicest part of the city, even if you could never afford to buy an apartment there yourself, by renting it.
There is no one answer to if renting is better than owning. The answer is that it depends on a lot of your personal situation and preferences. If you enjoy the flexibility and freedom renting brings you, why not. For others, owning might be a better option since it grows their wealth instead of their landlords.
Hopefully this was helpful to you, if you are interested, I have a post about the benefits of owning your own home as well, you can read it here. Have a nice day.
This is not financial advice.