In a recent post, we talked about some of the considerations for evaluating renting versus buying and it seemed as though, for many, the scale is tipped in favour of renting. So, here are five additional important reasons that tip in favour of renting over buying your own place:
- Major Upfront Cost – Many people just don’t have the money to go out and purchase a place flat out, or they spend a lifetime saving up to do so. Imagine all the other things that could be done with that money, or even if it were put toward something else? And then once that money is utilised to initiate the purchase, it’s locked up and you can’t access it.
- High Ongoing Costs – Maintaining a home can be very expensive. Things break. Painting, roofing, heating/cooling equipment… if you can think of it, chances are it will have to be replaced at your cost as an owner. By renting, you don’t have to worry about things like this as long as you don’t mind relying on the ability of a landlord to repair in a timely manner.
- Risk of Loss – There’s been a lot of press over the years about how much value homes lost worldwide. Well, there’s no reason it can’t happen again. At least as a renter, it’s the landlord losing money in the home rather than you. It’s very stressful after putting down all the money and making those mortgage payments only to see it decline in value year after year.
- Lack of Mobility – The ability to move rather easily is one of the most attractive aspects of renting. In this job market, you have to be as flexible as possible and often times, that means jumping on opportunities for new jobs either with your current or a future employer. If you are an owner, it’s very difficult, time consuming and costly to move. As a renter, it’s routine.
- Your Time! – This is one of the most underestimated problems with owning a home. Whenever something breaks or needs routine maintenance, you have to deal with it. Owning a home is so much more time consuming rather than just phoning the landlord that there’s a problem.
In closing, there are many circumstances where owning is a good choice, but it tends to be something more people are thinking twice about. The flexibility is key. For instance, if you were short on cash one month while renting you may be able to take out a payday loan to cover the monthly rent on time, but as an owner, your monthly housing and maintenance expenses are likely to be much more expensive each and every month and that might not work for you.