Why People Choose To Rent A Home Rather Than Buy A Home
When people consider renting a house, they may struggle with whether buying is a valid and better option. There are definite pros and cons to both renting and buying. At the end of the day, many people do choose to rent. But, why? There are many reasons why people choose to rent a home rather than buy a home, and some of them are so strong that it tilts them in that direction.
Property management companies in Massachusetts will point towards a lot of complexity in the rent versus buy debate. It is important to make sure people understand that there is no one-size-fits-all answer. Someone a year or two out of school with a limited credit history is in a very different boat than a retiree who has a long history of both buying and renting homes. So everyone’s personal situation has to be factored in.
That said, there are some clear reasons why many people do choose to rent. Looking at that rationale may help you decide if you fall into that category. So let’s go over some of the top reasons why people choose to rent a home rather than buy a home and see if this describes your situation.
Table of Contents
- #1 – No Maintenance or Repair Costs
- #2 – Flexibility
- #3 – Low Upfront Costs
- #4 – Amenities
- #5 – Avoiding Certain Expenses
#1 – No Maintenance or Repair Costs
One of the biggest advantages of renting a house is the lack of significant maintenance and major repair costs. There are all kinds of things that can go wrong in a house. When the plumbing fails, the roof leaks, or the HVAC breaks down, you don’t have to worry about the cost and hassle of having it repaired. As a tenant, your role is to promptly report maintenance issues to the owner, but as a homeowner, managing and paying for these repairs falls on your shoulders.
Along with that, when you are renting you can have the peace of mind of knowing that major repairs will be done by professionals. Landlords and property management companies are known for having networks of professionals ready to address the problems that come up. If you own your house and don’t have experience in hiring contractors, that means you are rolling the dice with anyone you might hire to make repairs. That can be stressful.
#2 – Flexibility
There is all kinds of flexibility when it comes to renting that you don’t have when you choose to buy. For example, you often have more flexibility when it comes to where you want to live. Many neighborhoods are well out of your price range if you want to buy. Living “in the city” can be price-prohibitive for many, which is why many move out to the suburbs. But if you want to live in the city or in a particular neighborhood, renting a house is often the best way to make that happen.
There are also location-related options that may make it easier when renting. Perhaps you want the house to be in a specific school district. Maybe you want to live closer to family that live in areas where the housing prices are too high.
There is also flexibility when it comes to upsizing or downsizing. Purchasing a house locks you into a particular home that has so many bedrooms and so many bathrooms. However, renting a house comes with more straightforward flexibility – meaning it’s much easier to move as your needs change.
#3 – Low Upfront Costs
While there are some benefits of buying if done in the right way as a long-term investment, the fact is that in most cases renting a home is better on the checkbook than buying. Recent reports have shown that renting is cheaper by $1K per month compared to buying a home.
Purchasing a home often requires putting down 20% of the mortgage. There are also closing costs that amount to a significant financial strain for buyers. For many people, the upfront costs of purchasing become are simply unworkable for their expenses.
On the other hand, when renting you are generally just paying a security deposit, the first month’s rent, and perhaps a few other minor fees or deposits such as a pet deposit or certain utility fees. It isn’t nearly as much as the initial expenses that are needed when buying. This reason alone might be at the heart of why people choose to rent a home rather than buy a home.
#4 – Amenities
One other reason that many people choose to rent: the amenities. In many cases affording pools, proper security, or a fitness center could be unreasonable on your budget. It’s difficult enough to afford the purchase of the house itself. Renting a house often results in having access to things you can’t otherwise afford.
What goes along with this is the location, as alluded to above. Many may want shops or restaurants located within walking distance. Maybe you want to live in a particular neighborhood with certain amenities nearby. There are many location-based amenities or factors that wouldn’t be within your budget if you were to buy. But suddenly, by renting a house, those options become within reach.
#5 – Avoiding Certain Expenses
As a renter, you do not pay property taxes. That right there could save you a lot of money. For example, the median annual property tax payment in Massachusetts is currently $5,361. It varies of course, but that could be a significant tax benefit.
In addition, as a renter, your insurance is vastly less on average than the alternative. While you might have renter’s insurance, it’s going to be less expensive than homeowner’s insurance, which includes coverage for the structure of the home. So you have some cost savings there.
Overall as a tenant you will find a number of expenses that you can strike off your list. Many people find that a major benefit that could become a deciding factor.
Hire the Pros at BMG
If you decide to rent a house, it’s important to understand the full cost of renting. If you only consider the monthly rental rate, you’ll likely end up budgeting incorrectly, leaving you in an unfavorable financial situation. One thing you can ideally do is talk to your landlord or property manager to understand which expenses you’re responsible for in your rental.
Bay Property Management Group offers comprehensive rental property management in Boston. If you have questions or need help finding a rental in these areas, contact us or check out our current listings.
On the other hand, if you’re a landlord or rental owner in the Boston area, we’re here to help! We can take care of the entire rental process, from tenant screening to maintenance to all the other pieces that are part of the property management puzzle. Contact BMG today to learn more about our services and how we can help your rental business succeed.