One-Story Homes vs. Two-Story Homes
While owning a home may be a lifetime goal for many people, homeownership does not match everyone’s lifestyle. The costs that come with buying and owning a home can be significant, allowing some families to opt for renting a home. Not only does renting offer financial benefits for families, but it can also offer flexibility that is suitable for a more nomadic lifestyle. Here, we share five reasons why renting may be a better option than buying.
1. No Down Payment
Home buyers must place a hefty down payment when purchasing a home, which is typically equal to about 20% of the property’s value. Renters generally have to pay a security deposit, which is equal to one month’s rent. For comparison, a 20% down payment on a house with a market value of $200,000 is $40,000, while the average monthly cost of rent for one of the most expensive places to live in the US is $4,419. Though a down payment results in the homeowner having equity in the home, which increases as the mortgage is paid, a down payment is significantly higher than a renter’s up-front costs. If you find that you do not have a substantial amount of money for a down payment, then the most logical option is to rent.
2. No Maintenance or Repair Costs
One of the benefits of renting is that the maintenance and repair costs are little to none. The owner of the property, or the landlord, has a responsibility to provide regular maintenance, home improvements, and repairs. If you find that your rental home has a leak in the roof, a crack in the window, or an appliance that stops working, your landlord is required to fix or replace it. On the other hand, homeowners must take care of all repairs themself and cover the renovation costs. Depending on the age and condition of the home when purchased, owners may find themselves in a pricey predicament when making repairs.
3. Flexibility in Location
Because rentals are more short-term than owning a home, renters have more flexibility when it comes to location. If you desire to live in an expensive city, such as Los Angeles or New York, you will find that renting is much more attainable than buying a home. Renting is also great if you frequently relocate due to work, or just want to experience living in new places. In contrast, if you are looking to live in one location for a prolonged period, then you may want to consider investing the money you would use for rent, into buying a home.
4. Flexibility to Downsize
At the end of their lease, a renter has the option to either renew or find a new property. This flexibility allows renters to downsize to a more affordable space if desired. It is easier to downsize with a lease than downsize from an expensive house due to the fees that come along with buying and selling a home. This is an important benefit for retirees who are looking to find a home that matches their budget.
5. Lower Insurance Costs
To ensure their home stays protected, homeowners need to have a homeowners insurance policy, which on average costs $1,249 per year. Similarly, renters must have a renter’s insurance policy to protect their possessions. However, unlike homeowners insurance, renter’s insurance is much cheaper at an average of $179 per year. For this fee, the renter’s insurance typically includes furniture, computers, and valuables.
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