Many times people don’t realize how much money they can save by renting a home. Because they make monthly rents that aren’t going toward a purchase, they think that renting is more costly. However, that’s not always true. Here are two reasons why renting is less costly than buying.
1. Low-interest rates can go up
You may think it’s a good idea to purchase a house when the interest rates are below 4 percent. But unless you’re positive you want to stay in that particular house for the long-run, you might want to consider renting instead.
Why? Because low-interest rates rarely stay low. When they go up, home prices often go down. Sometimes home prices drop so much it’s impossible to get back what you paid for the house.
If you purchase a home during a low-interest year and later decide you want to find something else, you may not be able to afford to move out. The beautiful house you’ve been making mortgage payments on may no longer be worth what you paid. You may be stuck for years in a house and neighborhood that you don’t want to be in anymore.
2. You always know what renting will cost you
Renting, unlike owning a house, means you never have to deal with unpredictable expenses. If you own a house, simple maintenance and repairs can cost you thousands of dollars each year.
Many people look at buying their own house as a good investment. However, an investment is meant to make more money than it costs. And yet homeownership can be costly! Ongoing maintenance for things little and big — a broken toilet, a crack in the patio pavement, a faulty light switch, a new water heater — all cost money.
Renting is a much freer way to live. When your lease is up, you can get a change of pace or different scenery simply by informing your landlord, packing up, and moving wherever your heart desires. If you want to move closer to family or find a place nearer to your work, there’s nothing holding you back. You don’t have to deal with the hassle of getting your house in tip-top shape, putting your house on the market, or giving potential buyers home tours.
And on top of that, you always know upfront how much renting a home is going to cost you. There’s a lot to be said for the flexibility and predictability renters enjoy!
