Many people assume that homeownership is better than renting. However, as with most things in life, the truth depends on different factors. Both options have their pros and cons, and for some people, renting can be better. Learn whether renting is better for you with the tips below.
No or Low Maintenance and Repair Bills
Maintenance and repair form a significant part of homeownership costs. Homeowners should budget to spend 1% to 4% of their home’s overall value annually on home maintenance. Given the typical cost of homes, the percentages translate to thousands of dollars per year on maintenance. Major repairs can push up the costs even higher.
You don’t have to worry about such costs if you rent. You won’t have to spend money to fix a leaking roof or replace a damaged siding. Maintenance and repair costs are the landlord’s responsibilities.
No Property Taxes
Local governments use real estate property as a source of income by charging property owners property taxes. Home values and lot sizes are some of the factors that affect property taxes. According to USA Today, the average property tax in Missouri is 1.01% of a property’s value. The good news is that you don’t have to pay property tax as a renter — only property owners pay the tax.
Low Initial Expenditure
One of the greatest difficulties in buying a home is the initial expenditure. You must have money for the down payment and closing costs. Possible closing costs include:
- Prepaid expenses (such as homeowners’ insurance)
- Mortgage origination fee
- Private mortgage insurance
- Title insurance
Closing costs typically range from 2% to 5% of the home value. The typical down payment is 20% of the home value, though you can pay more or less than that. When you rent, you only have to pay your rental amount, plus a possible safety deposit.
Easy Relocation
Homeownership makes sense if you plan to live in the same place or own the property for a long time. Given the initial cost of buying a home, you might lose money if you sell your home soon after purchase.
Rental options allow you to change homes without much difficulty. The ability to relocate every few years or so is a huge advantage to those who are just starting out in life. Maybe you haven’t found your dream job or started a family. You can get short rental leases that allow you to move every couple of years or so until you decide to settle.
No Worries Over Deprecation
Home prices generally appreciate with time, but that is not a given. Real estate property might depreciate if:
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- The local economy regresses
- The property suffers from poor maintenance
- The neighborhood crime rate increases
Luckily, renters don’t have to worry about extreme depreciation.
Both homeowners and renters require insurance coverage. The owner requires structure, liability, and content coverage. The renter requires liability coverage alone. Home or renter’s insurance largely depends on the value of the protected assets. Given the value of real estate property, home insurance is much more expensive than renter’s insurance.
Easier Moving Process
If you need a home fast, you are better off renting than buying. You can rent a home and relocate in a matter of days, but that is rarely possible with buying. The difference arises from the bureaucracy and requirements of a home purchase.
Renting has numerous benefits over buying. You just need to find an apartment that meets your needs. Crossroads Westside offers a variety of apartments for those who want to live in Kansas City. Give us a call so that we can show you our available apartments.
Low Insurance Costs
Both homeowners and renters require insurance coverage. The owner requires structure, liability, and content coverage. The renter requires liability coverage alone. Home or renter’s insurance largely depends on the value of the protected assets. Given the value of real estate property, home insurance is much more expensive than renter’s insurance.
