At one point in your life you will become a renter. Whether you are renting a room in college or renting an apartment in a big city, there is a good chance that you will rent. But how long should you be a renter? When is it time to stop renting and purchase a house? Is there ever a right time?
Renting your home has a lot of pros and equally a lot of cons. It is up to you to evaluate them and decide which option works best for you.
Pros of Renting
- Extra flexibility, less commitment. Renting gives you a lot of options. If you are only planning on living in a place for a short while, renting will allow you to leave when you need without serious repercussions. Some rental properties may have a contract, but a one year contract is much less commitment than a 30 year mortgage.
- Problems? Let the landlord take care of that. Leaky faucet or broken shower head? Thankfully, you will not have to spring for the new supplies or the time to fix it. Renting a home comes with a landlord, which means that you are not responsible for fixing problems in the house- that is, if you did not cause the problems. If there are any problems with the actual house, your landlord or a fix-it man paid by the landlord should fix it quick.
- Low upfront costs. To rent an apartment, you generally have to fork over first and last month’s rent plus a cash deposit before you move in. It might seem pricey but it is actually small comparatively. The upfront costs to buying a home could range from 3.5% to 20% down payment. For a $200,000 home, just your down payment alone will cost $7,000 to $40,000. If you do not have the cash for a down payment, you are less likely to get a loan.
Cons of Renting
- House may never become a home. When you rent something it never becomes yours. You might live there for a while, but it never feels like your home. This is an over-generalization, but some renters treat their rentals poorly. The thought is ‘it isn’t mine, so someone else can take care of it.’ If you do not like it anymore, you can leave in the middle of the night and let someone else clean up the mess. This frame of mind will make it so you never feel settled.
- Moving. Renters tend to be a bit more transient, which results in a lot of moving. For anyone who has moved before, you know the pain and misery of moving day. Even without big furniture items, moving is a pain. Even worse than moving? Unpacking.
- Decorating woes. Most landlords like to keep a home simple, like an open palette. This gives renters very little say or creativity when it comes to decorating, especially with paint colors. Some landlords even go as far to forbid anything being hung on the walls. Nothing says hospital room like blank, white walls.