Top 5 Reasons To Rent vs. Buy

In this article:

• Mobility
• Budget
• Extra Fees
• Liability
• Responsibility

For many people, renting a home can be a better fit for their finances and lifestyle than buying a home. Below are the top reasons people rent instead of buy.

1. Mobility

Renters aren't tied to a long-term financial commitment, so they can more easily move for employment, education, or family opportunities that arise elsewhere. Some argue it's just as much financial upheaval to relocate from a rented home as it is from an owned home. But leaving an owned home requires more time, attention and financial planning. The reason is that property is illiquid, in that you can't sell it in seconds like you can a stock. It can take months to sell, it costs about 5 to 7 percent of the purchase price to sell it, and you'll have to wait until it sells to get your money out. When you need to move as a renter, you can usually be out within 30 to 60 days of giving notice to your landlord. And if you had a security deposit and kept the property in good condition, you'll get that back when you leave.

2. Budget Simplification

Renters have one main housing payment: their rent. Like owners, they also have utility bills like electric and cable, but in some cases, landlords pay that -- and in even more cases, landlords also pay water and garbage collection bills. A simpler budget makes it easier for renters to focus, plan and save. Renters can use a rent affordability calculator to determine how much rent they can afford while also accounting for savings goals and other bills they have to pay.

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3. No Property Taxes, Insurance or Homeowners Association (HOA) Dues

Tax benefits are always discussed when talking about owning a home. The tax-deductible items for a homeowner are mortgage interest and property taxes. But homeowners must pay the mortgage interest and taxes along the way monthly. They get the benefit of the deductions and resulting tax savings later, when they file their taxes. Owners must also pay insurance on their home, plus for condos and planned communities, owners have HOA dues -- another monthly payment on top of mortgage and insurance. Renters have none of these costs (although, of course, they can opt to pay for renters insurance). Saving on these costs can reduce their monthly budget dramatically.

4. Not Liable for Maintenance or Other Costs

If a renter has a leaking toilet or a broken dishwasher, they don't have to worry about how much the repair costs will be. They just alert their landlord to get help. Not being responsible for costs -- whether small expenses like replacing a window screen or large ones like replacing a leaking roof -- is a crucial benefit of renting, because not only does it save money, but it saves time and frustration.

5. Not Responsible for Damage to the Property

In addition to ongoing maintenance costs like water and garbage collection bills,, a home can also have unexpected things go wrong – from a leak causing water damage to a tree falling onto the roof. In all of these cases, a renter may be inconvenienced, but they do have the offsetting convenience of being able to get their landlord on the case to fix it rather than fixing it themselves. It’s just one more example of how renting can save time, money and stress.