Ingrained in our culture as the pinnacle achievement of the American Dream, owning a home is a common and admirable goal many renters aspire to. Acquiring home ownership, however, takes time, planning, discipline, and a whole lot of money to achieve. Due to the volatility of today’s housing market, home ownership also carries more risks than ever before. Fears that the value of one’s property may diminish rapidly are increasingly justified. How would you feel if you purchased a home for 00,000 today and found out just a few months from now that it’s worth 00,000?
Deciding whether to rent or buy can be difficult. Varied pricing structures and fluctuation in the value of real estate make assessing the costs and benefits of homeownership complex and uncertain. For some, the desire to own a home justifies the risks they take in the process of acquiring that home. Recent real estate trends and market research suggest, however, that renting offers more advantages over buying today than ever before. Opt to rent rather than buy, and you can…
Save Money
A common argument for buying rather than renting is paying monthly rent is equivalent to throwing money into a black hole. In reality, renting is a financially smart move for many individuals and families. Yes, renting can save you money! And not just in the short-term. This is especially the case for people in their 20s and 30s who are not yet set on spending the next two or more decades in their current geographic location.
Life is expensive. If your budgetary breakdown is anything like that of the average household’s, you probably allocate more money to housing than to any other aspect of your livelihood. The annualized costs associated with renting a space, however, are almost always lower than those of paying a mortgage and property taxes on a comparable space. Sure, making payments on your home is a form of investing in something that will hopefully be yours someday. But considering fluctuations in the housing market and speculation that another housing bubble is building, individuals who choose to buy property today can lose out when compared to renters.
Enjoy More Flexibility
In an increasingly mobile world, cross-country and international job offers, and other appealing opportunities that require a major move are on the rise. For homeowners, packing up and relocating is much more difficult than it is for renters. Whereas renters can typically agree on some sort of lease buy-out if they need to move before their lease is up, selling a home is immensely complicated. Major renovations are sometimes required to make homes marketable, and finding a buyer can take months if not years. Until a home sells and the homeowner is able to transfer the mortgage, he or she will continue to be responsible for the costs of owning that home. This entails paying the mortgage, property taxes, upkeep, and any maintenance the home needs.
Live Where You Want to Live
If you want to live in a desirable area where land and living space are sparse and in high demand, buying a condo or house can cost a small fortune. Renting an apartment in the same area, however, might be affordable. This fact of the renting versus buying debate is particularly relevant to urbanites who want to live downtown.
For individuals, couples, and families uncertain about where their careers and where life will take them over the next five, ten, or twenty years, renting makes more sense than ever before. Even if you want to own a home in the future, you shouldn’t feel like the money you put toward apartment rent now is wasted. If it allows you to live in a hip area that appeals to you, shortens your daily commute, and gives you easy access to your favorite restaurants, museums, shows, and sporting events, the tradeoffs can be more than worth it.
Are you a renter or a homeowner? What do you feel are the advantages and disadvantages of your particular situation?
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