Is Renting a House Throwing Money Away?
We often come across many people complaining about unnecessarily wasting away their money on renting a house. They often feel pressured to buy a home. But is homeownership always the answer? No. It is not wise to think of your primary residence as an investment. Many make a fortune out of the real estate business, but you should leave your primary business out of it. Yet another fact in defense of renting rather than buying houses is costly to maintain. You are required to cover many expenses such as roofing, landscaping, and maintenance. You also have to cover the costs of expensive appliances at your house.
While buying a new house in a region, you should consider a long-term neighborhood. The value of your house will increase if you reside in a city with a favorable economy, education, and health institutions. This results in a hike in your property taxes as well. Your permanent contract with your residence also keeps you from shifting your residence if you find your neighborhood deteriorating.
The Benefits of Renting a House
The benefits of homeownership are very often overstated. However, there are several enormous benefits that renting a house offers.
Flexibility
The most important benefit that house rental offers is flexibility. The majority of the rental leases span over a period of one year. Renting is the preferred option for residing in a region if you are not planning to stay there for more than five years. Renting a house also breaks you free from the burdens of expensive maintenance. It is indeed a huge advantage over owning a house, and not having to worry about maintenance. Renting can be also beneficial to suit your financial status. You can choose to find a cheaper apartment if you find the rent of your current one going beyond your budget. If you manage to find an apartment that saves you a significant amount of money over buying one, you can also choose to invest the savings you have made.
Renting Helps You Avoid Dead Equity
The portion of the value of a home you buy is known as equity. The equity that is embedded in your primary residence is potentially worthless. This means a large amount of that accounts to your equity cannot be used for any investment. This amount of equity is referred to as dead equity.
While renting an apartment or a house, you are obliged to provide a month’s rent as a deposit. This amount is much lesser when compared to dead equity, and you can easily allocate the remaining money for other investments. Owning a house has numerous advantages, which is no debate. This article does not mean to hold anyone back from buying a house. Unfortunately, a vast majority of the people have a notion that renting a house is throwing away money. Surprisingly, it is the other way around. In many circumstances renting a house can be a smart financial move.
