By Kimberly Hayes:
A safe place to live is a basic need, but when it comes to renting versus owning, there's a lot to consider. For many people, renting offers countless benefits that owning a house can't compete with. Here's The GenZ Collective take on the ways renting may be a better option.
1. Renting Avoids Homeowner Expenses
When you buy a home, there's more than a mortgage to consider. Property taxes, repair bills, homeowner's insurance, and utility costs all factor in. Additional expenses can apply, notes Capital One, like flood or fire insurance, homeowner's association fees, and property upkeep.
Renting, on the other hand, tends to include rent and possibly utilities, nothing more. If you opt for an apartment or similar community as a renter, you may have access to additional amenities like a gym, pool, or pet park — all as part of the rent.
Having those amenities at a property you own sounds appealing, but the bill for installing them may not be.
2. Location Permanence Isn't a Requirement
There is a reason mortgages last 15 to 30 years; homeownership is meant to be somewhat permanent. There's always the option to sell, expenses come with a sale, and sellers have to pay both sides' real estate agents out of the proceeds.
In contrast, renting comes with a short-term lease, typically month-to-month or for a period of up to one year. Most rental agreements are renewable, but you're not locked in for 15 years or more.
Renting may be your best bet if you plan to make a career transition or want flexibility for your kids' educational options. Finding a bigger house in a new city or simply moving down for access to a preferable elementary school isn't possible when you own a permanent residence.
3. Mortgages Are Technically Debt
Although it could be argued that a mortgage is a less-evil type of debt, it's a debt all the same. With the possible negative impact of debt on your mental health, it may not be worth rushing into homeownership.
Apart from the stress, carrying debt in the form of a mortgage can also impact your purchasing power. While a mortgage payment factors in if you're looking to qualify for a car payment or a credit card, rent may not.
Though paying rent doesn't typically build your credit, it also isn't a set-in-stone monthly debt that impacts your purchasing power. Plus, if you want to move somewhere cheaper to increase your qualification odds, with renting, it's a possibility.
4. Homeownership is a Big Responsibility
The relative permanence of buying a home can be appealing, but the responsibilities aren't always as enticing. Beyond property upkeep costs, there's also the fact that if something goes wrong, it's up to you as the homeowner to fix it.
In a rental situation, calling the landlord or property management company is your only responsibility when something breaks. If your landlord is proactive and helpful, you may not even have to wait long for a fix.
5. Rent May Be More Predictable
Rising rent is always a concern when you have a short-term rental agreement. Yet homeowners are facing similar financial issues with their house payments. Fluctuating rates can increase house payments by hundreds of dollars per month, explains Experian, and anyone with a variable-rate loan is subject to market conditions. Rental costs aren't set in stone, but tenant rights laws are strict in many places, and price increases are often capped at a yearly amount or restricted entirely. For example, your landlord may be able to up the rent after your contract is up; it's your choice to renew and accept a higher price or find another rental.
Homeownership is still a goal for many people in generation Z and beyond. With so many benefits to renting instead, it's up to you to determine whether a rental or home purchase is best for you.
Kimberly Hayes enjoys writing about health and wellness and created PublicHealthAlert.info to help keep the public informed about the latest developments in popular health issues and concerns
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