In today’s economy many are choosing to rent in lieu of buying their homes. Why would so many people choose to rent in lieu of home ownership? There are many pros and cons of renting real estate vs owning real estate.
Reasons to Rent
If someone wants to buy a home it would cost at least a down payment upfront and in cash. For most American’s that is an impossible amount of money to save up and hand over to a real estate broker all at once.
The landlord generally provides maintenance on a rental home. Generally all the tenant has to do is notify the landlord of a break down and the landlord is responsible to repair or replace said item within a specified amount of time.
While a rental tenant won’t be having to pay homeowners insurance they will need to get renters insurance. The difference in cost can vary by a few hundred to several thousand dollars. For most tenants this is a great savings value.
Additional benefits for the renter
The benefits of remaining renters often far outweigh the idea of home ownership. Payments rarely increase and tenants can easily maintain a budget. Maintenance repairs can be anywhere from $25 to $50 per hour that a renter may not be able to afford and if something major breaks down the tenant won’t have to pay from their own pocket.
In today’s economy with a recession in the recent past tenants don’t have to worry about losing their home due to company downsizing or foreclosure.
Benefits of home ownership
If a tenant pays rent each month this is an income for the home owner. Providing the home owner can keep the rental occupied the home will be making money for them over the long run.
Owning one’s own home
For a person who wishes to own their own home there are some benefits. They can paint the interior and exterior of their home any color they choose (if there are specific rules for their neighborhood there are still many parameters that allow for certain colors).
Tax write offs
Some homes earn special tax write offs. Talk with a tax representative to see what the specifics are in any area.
Owning one’s own home can offer a sense of security to many an American. This security however, can be short lived if one loses their job or isn’t prepared for the responsibility of owing and maintaining one’s own home.