Housing when Renting is better than Buying

The decision as to whether to buy a property or to rent an apartment or home is a big decision for many people. There are many opinions on both sides. Many proponents of home purchasing base their opinion on the fact that your home can grow in value and thus, as you live in your home you have the potential to make money. Additionally, if you are a renter, not only are you paying monthly rent which has no chance of helping you build equity, but you could in fact be subject to a rent increase. Although all of this is true, this does not necessarily mean that you should buy a house over renting one.

The above arguments are usually premised on the assumption that a person can afford to purchase a home but is torn between buying and renting. However, this is not always the case. There are many people that cannot afford to purchase a home and thus, renting becomes a very attractive option. Even though the equity building fact of home ownership is a very big advantage of home ownership, this does not mean that renting is a bad decision. In fact, there are many benefits to renting.

In order to purchase a home you have to either pay cash for the property or obtain a loan for the purchase price less your down payment, if any. Homes are not cheap. As such, you will have to pay or borrow a sizable amount of money in order to purchase a home. Should you have to borrow the money (as most people have to do) you must be approved for a loan based upon your credit score, your monthly income, and your monthly obligations, to name a few. As such, if you do not have a good credit score or do not make enough money to purchase a home, you are financially unable to do so. Therefore, absent living on the street, renting becomes your primary option.

One of the benefits of renting is that your rent payment will almost always be less than a mortgage payment. Additionally, your apartment complex may have some very nice amenities that may not be available with a home purchase. Therefore, you will have some luxuries and be saving some money.

Another benefit of renting is that you are bound only by the terms of your lease. Therefore, should you want to move out at the end of your lease, you can. You do not have to worry about selling your place or renting out the same as you do with a home. Therefore, you can make your own moving schedule and not be at the mercy of the real estate market.

The point is, there are circumstances when renting is a better option than buying. If you have the financial capability of buying a home, you should definitely choose to purchase over renting. If, however, you have a financial issue that would make a purchase extremely hard or impossible, you should opt for renting.