Seven Financial Benefits of Renting
“To own, or not to own”? That’s the question you should be asking yourself!
Purchasing a house is still a lifelong dream of most people. There are many benefits that come with it. However, in a booming house market, homeownership isn’t for everyone.
Renting comes with a lot of advantages, especially financial ones, that are less well-known. From free access to amenities to more savings, here are some of the biggest economic benefits of renting instead of owning:
No property taxes
Property taxes are a major expense of homeownership. Although a bit complex to calculate, they’re based on the estimated property value of your home and the amount of land you own, which can fluctuate according to market changes. As a renter, this burden is not a worry. While real state taxes are rolled into your rental price, you will never be on the hook for this high annual expense.
Lower insurance costs
While both homeowners and renters need to have an insurance policy, the average cost of a renter’s insurance is about $200 per year. For homeowners, on the other hand, insurance is becoming a significant cost. Nowadays, with the sizable rises in premiums, insuring your house can cost you nearly ten times more than an apartment.
Lower utility costs (if any)
You might not think that utilities can be such a significant cost of homeownership, however, once all bills are added up at the end of the month, you can very easily find yourself paying much more than anticipated. Many rental properties have at least one, if not all, utilities included in their rental price. Furthermore, if you do end up having to pay for those utilities, they’ll be significantly cheaper, as an apartment suite is much smaller and consumes much less than an entire home.
No maintenance costs
A broken dishwasher or huge piles of snow outside? Not your problem. As long as the issue isn’t a direct result of your actions, your management company is responsible for all maintenance, improvements, and repairs. This is not only a financial blessing, but also a huge timesaver and it provides peace of mind!
Access to amenities
Unlike houses, rental properties often have onsite amenities, such as pools or fitness centers available to residents at no additional cost. If a homeowner wanted to have access to these same luxuries directly on their premises, it would likely cost them thousands of dollars just for the installation and maintenance. As well, gym memberships can also be quite pricey. If you’re renting, the gym can be an elevator ride away.
More financial stability
A renter’s finances are overall very predictable: you have your fixed rent amount, bills that don’t fluctuate very much, and that’s about it. When you’re a homeowner, that’s not always going to be the case. While in some months you might not pay anything more than your mortgage and your regular bills, the next month you might have to spend thousands of dollars on a new fridge or a roof leak.
More opportunities for saving and investing
One of the biggest myths about renting is that you are throwing away money every month, but that’s not exactly true. In one way or another, housing is always going to cost money. While you do build equity with monthly mortgage payments, not all expenses of homeownership go towards that. As a renter, not only are your expected expenses significantly smaller, but your unexpected expenses are nearly non-existent. This gives you the perfect opportunity to invest the extra cash you save at the end of the month because you’re renting rather than owning!