There’s an unspoken feeling that renting is something that is wasteful, for want of a better word, as opposed to buying. This week let’s focus on the positive aspects of renting.
First, bear in mind your entire annual rent isn’t a loss. Let’s say you are paying $1,000 a month in rent, equal to $12,000 annually out of pocket. If you owned a similar property, you could be assured that the combined costs of maintenance, insurance, real property tax, even Home Owner Association Fees, would approximately total this amount. Generally speaking you can subtract 2-3 months’ rent off of your annual rent total versus owning your own home. As with the example above, you would subtract approximately $3,000 +/- in expenses with your own home, therefore in reality you’re paying out approximately $9,000 per annum in additional costs as you would have had the $3,000 +/- in payout with your own property.
Second, renting is a great option. Your life, career, family or other outside circumstances can be causing you to face a transition period that might rule out making a commitment to a monthly mortgage or deciding on a fixed place to settle down. Also, the Home Owner Association is dealt with by your landlord.
Third, renting gives you flexibility. You can choose to relocate when your lease expires. Neighbor from hell? Massive construction next door? As a tenant you can move relatively easier than a homeowner who is going to have to look for just the right buyer.
Whether you rent or buy having a roof over your head will cost “X”, justifying if it is worth saving or spending more than “Y” will depend on your individual circumstance.