The goal of many Americans is to become a homeowner. According to the latest US Census Bureau statistics, more than 65% own their own home. While buying and renting both have their advantages, in many situations you’ll enjoy more benefits, including financial advantages, as a renter.
Lower Upfront Costs
If you were to buy a home among the real estate in Banff, for example, you’d have to come up with a big down payment, experts typically advise putting down 20 percent. Even if you were approved for a loan that required half that, it’s still no small chunk of change. For a lower-end home priced at say $250,000, that’s at least $25,000 not to mention closing costs which could be $5,000 to $12,000 or more. When you rent a home, that total to move in is usually a fraction of that, with the first month’s rent, a deposit, and maybe the last month’s rent required.
No Property Taxes and Lower Insurance Costs
Property taxes can be thousands of dollars annually, potentially a significant financial burden. As a renter, you won’t have to worry about coming up with all that money every year, one of the major benefits of renting vs. owning a home. Plus, renters’ insurance is generally much lower than what you’d have to pay for homeowners’ insurance, something that’s required by mortgage lenders.
No Surprise Repair Bills or Maintenance Costs
The cost of maintaining a home isn’t cheap. When you rent, your landlord is responsible for taking care of the maintenance and repairs, so if your hot water heater fails or the roof starts to leak, ideally, all you have to do is make a phone call. If you’re a homeowner, you’ll have to make the arrangements and pay to get things fixed or replaced, and you’ll also have to shell out money to maintain the home too. That includes repainting, lawn care, gutter cleaning, and much more.
When you own a home, you can’t just up and move if you find yourself with bad neighbors, an exciting job offer in another location, or something else that requires living somewhere else. You’d have to put your home up for sale and hope that it sells quickly, or try to rent it out to someone, which means you’ll have to manage that property from afar too. When you rent, you won’t have that long term commitment, at least beyond your rental contract. Renting also means more flexibility when it comes to choosing where you want to live, as renters can typically find a place with a more affordable monthly payment easier than homebuyers.
If you rent a condo or an apartment, you’re likely to have amenities that come with the complex, like a fitness center and a pool, at no additional cost. When buying a house, having luxuries like these is expensive. Installation and maintenance of a pool, for example, costs thousands of dollars. Even if you buy a condo, you’ll probably have to pay monthly fees to access amenities.