The Pros and Cons of Renting a Home
Whether you are right out of college or you are into your lived-in years, most likely you will rent a home at some point of your life. There are plenty of pros of renting as opposed to owning a home. For some, renting is the perfect option, and for others, owning a piece of real estate is right for them at this time of their lives. Let’s look at the benefits of renting a home, including apartment pros and cons and more.
A quick look at the pros and cons of a renting
|No long-term commitment||No permanence|
|No responsibility for maintenance||Your rent price isn’t fixed|
|Minimal unexpected costs for repairs||You may not be allowed to have pets|
|Could be cheaper than owning||You’re at the mercy of your landlord for maintenance, cost, and stability|
|No down payment||No tax benefits|
Digging deeper: The 5 benefits of renting a home
There are plenty of benefits of renting a home, from the cost to the flexibility of it. Some people only ever rent homes because it’s the right choice for their living situation, and that’s perfectly fine. Owning a home isn’t in every person’s life plan, so if you currently rent and love it, it’s probably because of some of these benefits of renting a home.
1. No long-term commitment
The beauty of signing a lease in a rental is that it’s usually not more than 24 months and oftentimes just 12 months. In many cases, you can even sign a month-to-month lease (though it’s usually more expensive), which means you have no obligation to stay in this rental any longer than you want to. For people who move around a lot or have trouble settling in, this is the perfect situation.
2. No responsibility for maintenance
Perhaps we should say there is very little responsibility for maintenance. While you might be expected to maintain your rental as best you can, you aren’t on the hook for major repairs, like if an appliance breaks or you have a plumbing issue. Your landlord (or building owner, etc.) is the one who is responsible for handling these repairs. Though there might be a situation where you’re on the hook for it (like if you broke something), more often than not, it’s not your problem.
3. Minimal unexpected costs for repairs
Similarly, that means you don’t have to worry about running into any unexpected expenses if something in your rental breaks. If you owned a home and your dishwasher died, you’d have to shell out a few hundred bucks for a replacement. If the dishwasher in your rental dies, your landlord would be the one to replace it, which is of no financial burden to you.
4. Could be cheaper than owning
This is all relative based on your rental and where you live, but renting is often cheaper than owning, at least in the short term. Buying a home is a very large investment, and while that cost is spread out over years, it still comes with a hefty price tag, whereas renting oftentimes does not.
5. No down payment
Speaking of that hefty price tag, a large portion of it comes in the form of a down payment, which you aren’t dealing with in a rental. When you rent, you’ll probably put down a security deposit, but it doesn’t usually equal more than a month’s rent. A down payment on a home, however, can run you several thousand dollars, which is a lot of money all at once for many people.
The disadvantages of renting
While renting might sound like the best option in many cases, it does have its drawbacks. You have to consider both the pros and cons of renting a house. The biggest con of renting is that your space is never truly your own. For some people who want to set down roots, this is a deal breaker, understandably. There are other cons to consider with renting as well.
1. No permanence
Like we said, there’s really no permanence with a rental, which is one of the biggest disadvantages of renting. Sure, you can rent the same home for decades if you want, but at the end of the day, it’s still not yours. But the permanence is more than just you: your decorations will lack permanence as well. Many rentals won’t allow you to make major changes, like renovations, updates, or even paint.
2. Your rent price isn’t fixed
While rent-stabilized apartments are a thing in certain cities, it’s not a widespread rule among rental homes. Essentially, within reason, your landlord can adjust your price however they see fit. There’s a possibility that your neighborhood might have a real estate boom that clues your landlord in to your rent being below market value, so in turn, they raise it the next time they’re able. You could get wedged out of your home because of this price hike.
3. You may not be allowed to have pets
Some rentals won’t allow pets or if they do they charge an extra fee. While this won’t matter to some people, for others, they can’t move into a home that won’t allow their animals. For people who have large dogs, especially, this can be tricky, as some rentals will allow pets but not large pets.
4. You’re at the mercy of your landlord for maintenance, cost, and stability
While you aren’t financially responsible for maintenance issues in your rental, you are at the mercy of your landlord when it comes to those fixes. Your landlord may be in no hurry to repair things or they may do it cheaply so it ends up being a problem again. The landlord can also find ways to remove you from your apartment at their will, whether it’s because they want to raise the price or just not deal with you. There are obviously legal ramifications if some of these are done improperly, but you are still at the mercy of someone else.
5. No tax benefits
Buying a home can get you some tax breaks, but guess what? You won’t be getting any tax breaks from renting. While this may not be a deal breaker for some people, for others it’s a very big deal.
What about apartment dwellers?
Renting an apartment is essentially going to come with the same pros and cons of a rental property. You’re still at the mercy of your landlord, though with renting an apartment, you might have an even harder time with maintenance, repairs, and price gouging, because your landlord probably oversees many tenants and properties.
However, you can still get those advantages of short-term leases that let you move around as much as you want and not have to worry about paying for any fixes in your unit. Renting an apartment is actually a great way to gauge a neighborhood if you’re looking to buy, as well. If you’re in the market for a house in an area you’re not familiar with, a short-term lease on an apartment in the area will not only help you judge that neighborhood, but it will give you an authentic feel of where you might be spending the next few decades of your life.
The bottom line
There are plenty of benefits of renting a home vs. buying a home. It’s a more financially feasible option for a lot of people, and it’s especially beneficial for anyone who isn’t quite ready to set down roots. Whether you travel a lot for business or pleasure or just want to keep seeing more of the world, renting allows you to do that while also giving you a place to live that comes with little responsibility.
Is it worth it to rent a house?
It always depends on your own situation, but renting is a good idea in many cases. Renting can help you figure out what neighborhood you want to buy a home in. It can also be a good idea if you travel a lot or aren’t ready to set down roots.
What is better, owning or renting a home?
This depends on you. If you’re financially able to buy a home and know you want to stay in one place for a long period of time, maybe buying a home is the right choice. If you don’t have a down payment and don’t feel like you know where you want to live for the next 10 years, renting might be better.
Is renting a home a waste of money?
No. Renting a home is the best choice for some people. The price of your rent is still paying for a roof over your head, so it’s not a waste.
What’s the best way to rent a house?
This will also depend on your situation, but consider your own needs and go from there. Decide where you want to live, what you want in your home, etc. Then go about finding a place to match what you want, whether it’s through a broker, online, or from a friend.
How much should I spend on rent?
A good rule of thumb is to spend no more than 30% of your monthly income on rent.