Rent Is Underestimated
Many people will tell you that renting a house or apartment is a waste of money, but this is not always the case. Just because you’re not ready to buy a home doesn’t mean you can’t get great benefits as a tenant.
In some areas, rent is much cheaper than buying
Buying a home is a good goal, but depending on your area, buying a home may not be a good idea . In the video above from Ramita Sethi’s YouTube channel, Sethi explains that buying a home makes sense in certain parts of the country, but the situation is very different for many busy metropolitan areas. Being able to afford a $ 1,000 monthly rent in a city doesn’t necessarily mean you can afford a $ 1,000 mortgage. There are “phantom costs” such as taxes, maintenance, and insurance that can push this mortgage from $ 1,000 a month to about $ 1,500 a month. A rented apartment or house can be as good as what you can buy for the same amount, and it gives you the chance to save money for the future.
Personal finance blogger Mr. Mani Usat invites you to think about the cost of commuting to work as well. A home in the suburbs of a large city may be 40 minutes from your job, which requires gas and vehicle maintenance costs if you cannot use public transport. It probably wouldn’t be that hard to find accommodation close to your work that could save you money on housing and commuting.
Cities are expensive, whatever you do, but real estate in cities is expensive because there is not much of it. Apartments and rentals, on the other hand, are abundant. On reflection, you will definitely find an apartment at a bargain price. There is no reason to rush into buying a home until you are sure you can afford it. If you’re unsure, this New York Times calculator can help you determine if you’re ready or not based on the value of the home, the down payment, and how long you plan to stay there.
You don’t need to worry about your home losing value.
Many people will argue that by buying a home you are increasing your stake in it – in the end, you will end up paying for it in full. But remember that you too can lose some of this money. If the housing market gets worse and you have to sell, you could lose thousands of dollars. When you rent, it’s the landlord’s problem, not yours.
Plus, if you think buying a home is a way to force yourself to save money in the long run, Get Rich Slowly’s JD Roth explains that it isn’t at all:
… if buying a home is like a savings plan, it is probably the worst savings plan on earth. You would voluntarily subscribe to a savings plan in which more than half of the money you put in during the first 20 years just disappears, and from which you can only withdraw money by moving to another location and paying a commission of 6-9% (not of the amount you deposit). “Saved” but on the total selling price of the house)?
If you need a savings plan, just save money yourself. As a renter, you can take what you would pay in real estate taxes and operating costs and then put them in a savings account, which will bring you useful, liquid funds that you can invest in whatever you want (even the down payment for House).
You are not responsible for home renovations
Dealing with homeowners can sometimes be difficult , but when something breaks down in the house, they have to fix it. They pay for renovations, they have to deal with a handyman or fighter jet, and they need to worry about the overall upkeep of your building. When you have a home, it’s all on you. This can lead to a lot of work on your part, or a lot of money, or both.
Your budget is more predictable
When it comes to repairs and maintenance, surprises like these can eat up your budget at the most inopportune moment. As Craig Ford of Cash Money Life points out , home ownership lacks real predictability when it comes to your personal budget:
You don’t know when your water heater will fail, when termites will invade your home, or when your foundation will crack. Each of these emergencies requires money to deal with. When renting, you pay a monthly set amount in dollars.
The money you saved up to go on vacation? Now let’s get down to repairing the sink. That landscaping project that should have only cost a couple hundred dollars? Oops, now it looks like it will be well over $ 1000. As a renter, you pay the same amount every month no matter what needs to be repaired. This consistency helps save money.
You are more flexible
Home ownership makes it difficult to be flexible about where you live. Michelle Lerner of Money Crashers explains that renting makes relocation a lot easier, which is important if you think your career might make you relocate any time soon. (After all, it can be nice to get a job when you ‘re young.) Steve Repack of Equifax, a finance blog, agrees :
I remember my time in the army, when I had to climb and move every three to four years. If your profession requires frequent relocation, like me, renting may be the best choice. Buying and selling a home is expensive, and participating in any of them can be a losing proposition, depending on how long you own the home, the housing market in your area, and current interest rates, among other things.
Renting allows you to work on a monthly basis in most cases, and you simply cannot do this when you have a home. You should also consider your lifestyle. If you love to travel a lot for pleasure, renting gives you more funds and fewer worries to worry about when you get home.
You can access certain amenities
Last but not least, rented apartments and other communities usually have perks built in. Of course, you can buy equipment and equip a gym in your home, or you can use the gym built into your apartment building. A backyard pool would be nice, right? Or choose an apartment complex with a swimming pool and staff to clean and care for it. Not every rental has access to cool amenities like gyms and pools, but perks like these can make renting that much better than buying.