Why Rent a Home Instead of Buying One
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Why Rent a Home Instead of Buying One?
The common “wisdom” is that home ownership is the real American dream. Values escalate and homeowners can enjoy an ever-increasing investment while having a good quality of life. Often, this is an accurate projection. But, as usual, there are no guarantees. The sometimes cruel uncertainties in the real estate market are but one reason to consider rental property along with home ownership.
But the question remains: “Why rent a home instead of buying one?” Here are some reasons that it may make sense to consider rental homes instead of those for sale.
- Timing issues. For many people, the business of living takes many twists and turns in the 21st century. People in the generation or two that preceded our own often worked for the same employer for many, many years, lived their lives in the area in which they were born, and were subject to much slower changes in technology and the economy. Contrast that lifestyle to more contemporary ones. It appears that job- and career-switching is an ongoing, evolving process. We often not only travel for recreation but we tend to move more often for personal or employment-related reasons. Economic cycles, for better and worse, happen quickly. And, technology seems to leap forward on a weekly basis. Instead of a long term commitment to owning property, choosing rental houses may make more sense.
- Financial issues. The numbers of exotic mortgage products available, many permitting us to purchase property with little or no money down, are intoxicating. The temptation is high to use one of these to purchase our first or subsequent properties. However, suppose you could find rental homes with much more square footage, better appliances and amenities, and in more upscale neighborhoods for the same monthly cost as that little starter home you struggled to purchase? Would it make sense to consider your lifestyle and comfort as much as future investment gains? Probably.
- Repairs and maintenance issues. You've all seen those cute but frightening signs in upscale stores that warn, “You break it, you bought it.” Sometimes prospective homeowners should visualize a similar warning, “You bought it, you fix it.” Murphy's Law dictates that your heating system will fail on the coldest day of the winter, your plumbing will have a problem right before you're expecting four guests for the holidays, or your water heater will burst right before the family's shower time. You must have the ability to fund all of your home repairs, upgrades, emergencies, etc. whenever they happen. One of the reasons why people rent? They can pick up the phone and hail their landlord, who must then get to work on repairing or replacing that water heater immediately.
These are just a few reasons that answer the question "Why do people rent?" The rent real estate versus buy real estate question has existed for eons. It will continue. The bottom line is that there is no best answer for all people at all times. There are good reasons for both approaches. Think about your personal situation and pick the best solution for you.