To some, answering the classic question “is it better to rent or buy?” is easy.
But owning a home isn’t the best move for everyone. For those weighing renting vs. buying, here are a few reasons why renting can be the better choice.
1. You want maximum flexibility
With renting comes the flexibility to stay put for a few months or years without paying much more than a monthly payment. If your job requires you to move every few years or if you’re unsure how long you’ll be in one place, it can make much more sense to rent. The upfront costs of a home purchase can set you back financially if you move too soon after buying.
You might also consider renting if the neighborhood isn’t one you’re set on.
2. Buying is out of reach financially
The price tag on a home can be discouraging, especially if space is important. Some families with kids can’t afford to buy a home in the area they want that’s of similar size and space as the house they rent.
3. You want to avoid maintenance and other added costs
When you rent, your landlord typically has to fix structural defects or other problems such as plumbing or wiring, but once you’re an owner, maintenance and repairs are your responsibility. Shukla in San Jose says upkeep is one of the more surprising things he’s had to invest time and money into since becoming a homeowner.
Many do not factor in the costs of maintaining a home. Maintenance, upgrades, property tax, insurance all add up to additional costs per month beyond the mortgage.
4. Other priorities top homeownership
Location, particularly in relation to work or family, might play a large role in whether you choose to rent instead of buy. Mandel and her husband, for instance, knew they wanted to be close to their extended family in the area.
About 42% of renters believe their housing situation lets them live in a more convenient location, according to a 2012 Fannie Mae survey. Among millennials, most prefer city living, and two-thirds of these young adults are renters, according to a 2014 Nielsen report.
Buying a home is not a rational financial decision. It’s an emotional lifestyle decision that has financial ramifications.
If buying doesn’t fit into your lifestyle and financial situation, renting might be the better choice.