Both renting and buying a house have their own advantages and disadvantages. Most people struggle with the decision of renting vs buying a house and it’s totally understandable. Renting and buying is a big financial commitment that needs careful thinking. Here are some of the benefits of renting vs buying a house you should consider:
Lower Upfront Cost
Buying a house comes with a lot of upfront expenses like a down payment but with a rental, you only pay a rent deposit. In some rental property, you don’t have to pay any extra cost. All you have to pay is an application and security fee before moving in. The application fee varies from state to state usually less than $50. The security deposit might be between one and three months’ rent.
The security deposit should be refunded if you wish to vacate the property, as long as you adhere to the rules. Rental upfront costs are much lower compared to a down payment, property taxes, and closing costs. When purchasing a house, the acceptable down payment is not less than 20% of the property value.
Rent is Fixed
When renting a property, you know exactly what you’re paying for every month for rent apart from other bills such as water and electricity which depend on usage. You can easily have a monthly budget that is clear. You lock yourself in a fixed monthly budget for the entire time of lease.
Rent can only increase after a lease renewal, but it doesn’t mean that rent has to increase after every year. In homeownership, the cost is variable. According to the terms of the mortgage, the interest rate may change over time. The property taxes also fluctuates every now and then.
Less Cost of Repair and Maintenance
When you rent a property, it is the responsibility of the landlord to cater for all the repairs, maintenance, and improvement. In case an appliance stops working or the roof starts leaking, your landlord should repair or replace it.
You might be required to contribute to the damages that were caused as a direct result of your actions depending on the lease agreement. Some landlords have standby repair and Maintenance Company which do a routine inspection of the tenant’s houses. If you buy a house, you are responsible for everything. The cost of repair, upgrade and renovation might be expensive.
Some Utilities are Inclusive
One of the advantages of renting is having access to amenities for free or at a small fee. Luxuries such as a gym and a pool come standard in most apartments with no extra charges to tenants. Other utilities inclusive are free internet, water heat, or more.
The utilities which are not included in the rent, are cheaper when the tenants buy. If you are buying a house, you will have to install these amenities that cost a lot. Even if you installed a pool, you have to pay for maintenance, cleaning, and repair.