Back in the 1950s when soldiers had returned from World War II and the industrial production centers of America had shifted back to civilian products, the American dream came to mean owning a home with a white fence and having a large yard for the kids to play in. What got left behind is the reality that home ownership is not for everyone. It really is OK to rent and not own. Let’s look at some reasons why that’s true.
For many years, it was up to the person who wanted a house to build that house for himself (typically) and his family’s needs. After the pioneer days, people often rented a house for most of their lives. Obtaining shelter has certainly changed throughout history, and it’s definitely swinging back towards renting being popular.
One big advantage renting has over ownership is you don’t have to incur the maintenance costs involved in building upkeep. Any repair bills are covered by your landlord, or if you do pay them, you have the right to deduct them off your rent. Updates to the rental unit like new countertops or improved vinyl windows are also all paid for by the landlord. You get all the benefits, and don’t have to take out a second mortgage in the process.
Another big advantage that renting has is that you can have access to things like a gym, a pool, tennis courts, and onsite laundry that doesn’t cost you another dime – it’s all included in the rent. Many times your utilities, or at least some of them, are also included in your monthly rent amount.
Renting has advantages during tough economic times. You don’t have to pay high property taxes on a home you are under water with. You also don’t have to come up with a sizeable down payment, just the deposit. Let’s say you are looking at a house to buy that is priced at $200,000. If you have to put down even a 5% deposit, that is $10,000 – an amount that will get you several months of rent!
Some markets have recovered after the great recession, but others are still struggling. Those markets are harder to sell a home in because so many people are trying to get out of a mortgage that is valued at more than the house’s current value. Instead of appreciating, the house has depreciated, and is no longer the investment it could be.
A rented house or apartment is also a great way for people to downsize. When the kids have moved out and you just want a place for the two of you, a rented place is a great idea. Not having to care for the yard or maintenance means you also get to have more time to enjoy retirement.
Renter’s insurance is also a lot less expensive than homeowner’s insurance is. It only has to cover your contents and a little liability coverage. You can get renter’s insurance for under $15 a month – great for budget-conscious people!
For some, owning a house is the only way to go, but for others, renting not only makes sense, it’s a perfect fit.