While buying a house is a huge step, the financial implications can sometimes outweigh any perceivable benefits. That is why many are opting to rent a home rather than purchase one outright. Plus, depending on where you live, finding affordable apartments and houses is fairly easy.

Renting usually entails the signing of a lease—a contract bounding the leaseholder to the property, usually for a minimum of one year. The fact that a lease usually doesn’t last a while is one reason why many folks find renting a home so attractive. If when the lease is coming to an end and you want to move somewhere else, all that needs to be done is to notify the landlord of your intentions. In many cases, if you’re able to find a tenant to take your place, you may even be able to end your lease early.

Renting a home also means that the landlord takes on most of the responsibility associated with house maintenance. So if the water heater—a costly fix—decided to break down, the burden of fixing it would fall upon the landlord’s shoulders, rather than your own. Moreover, if you’re lucky, some of your utility bills will be factored into your monthly rent.

Obviously, finances are a major factor when considering renting or buying a home. While most landlords require an upfront payment of 2 months’ rent, imagine if you had to foot the bill for a down payment on a home (which can be as much as 20% of the purchase price). So if, for example, you were contemplating the purchase of a home that cost $150,000 and you had to cover a 20% down payment, you would be looking at a $30,000 down payment upfront. However, if a rental home cost $600.00 monthly, you would only need to shell out $1,200 upfront. That is a $28,800 difference. Not to mention the fact that you are not responsible for paying property taxes when renting a home.

While renting does pose significant benefits compared to buying a home, as with everything, it also has its disadvantages. First and foremost, many landlords will raise the rental costs after each lease renewal, which can sometimes lead to large increases; unless of course, the house or apartment is located in a rent-controlled area. Homeowners can also take advantage of tax deductions that renters are not eligible for. These deductions are usually applied to property taxes and interest on mortgage loans. Since renters do not qualify for any of these tax deductions, they are not recovering any of the costs associated with living in the apartment.

Another possible drawback lays in the landlord himself (or herself). You are dependent on the landlord for practically everything relating to the home or apartment. If something goes wrong, the repairs are at the mercy of the landlord, which could take a while in some cases; especially if the landlord manages several tenants. With major repairs, the landlord may not be equipped to make the repairs, in which case he or she becomes the middleman, having to contact the necessary repairman to come out and fix it.

1 Kindesign Reader’s, do you rent an apartment or home? Share with us what you enjoy about the experience and what you dislike! Do you plan on renting for awhile? If you are in the decision making stage – what are your main concerns?

 

Photo Sources:  1. SHKS Architects, 2. Celebrity Communities, 3. Camber Construction, 4. McClellan Architects, 5. Celebrity Communities, 6. Neat Organization and Design, 7. Kara Mann, 8. Terrat Elms Interior Design, 9. Studio Garneau, 10. Ira Frazin Architect