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Top reasons to rent a home rather than buying it

By Mason White 11:24 AM January 26, 2017
Apartment complex (illustration)
By: Michelle Parker

For a long time, buying a home was considered an American dream.

However, for many people, owning a home became a financial burden.

Here are a few things that you should consider before making a decision whether or not buying is a smart choice for you.

When you buy a home and take out a mortgage, the interest payments will make the final price much higher than the purchase price.

The price of the home, the mortgage interest and the yearly home repair costs, will amount to many years of rent money.

If something unexpected happens and you are unable to pay your mortgage, then the bank will take away your home.

You will loss your investment and all the money that you spent on remodeling the home will go up in smoke.

However, when you rent and you fall on hard times, then you can leave when the lease is up without any financial loss.

When you purchase a home, you tie up a large sum of cash.

When you buy a home, you are tied down to this location.

If you get a bad neighbor, the crime rate goes up in the area, you switch jobs, you break up with your spouse, or if you find a new partner in life, you cannot move easily.

When you take out a mortgage, you are forced to buy insurance, including but not limited to fire, liability, and flood.

However, when you rent, the landlord is responsible.

You can buy renters insurance to insure your own property if you wish, but it is optional.

When you buy a home, you will have to pay for all repair costs. If you have a large repair, such as a leaky roof or boiler, then the unexpected cost may put you in great financial distress.

However, if you rent the home, the landlord will be responsible to repair these repairs.

If you want to buy a home as an investment for capital gains, you will be better off buying into a real estate investment trust.