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5 Reasons You Should Rent a House Instead of Buying One

With any major decision in life, there are pros and cons to consider, and the right decision depends on what your particular priorities in life are. Deciding whether or not to buy a house definitely fits that bill.

If you plan on being in the same city for the next several decades, want to customize your home in any way, want to be able to have any pets you want, and don't mind the commitment of a mortgage, owning is probably the best way to go. However, there are some perks that renters enjoy; here's a list of a few of them.

Source: Images of Money.

1. Smaller time commitment
One of the biggest perks of renting as opposed to owning a home is the relatively small time commitment involved. The longest lease I've ever heard of for an apartment is two years, with the standard being just one year. Some apartment complexes even offer month-to-month leases. 

In contrast, most mortgages are either 15 or 30-year commitments, making renting an excellent choice for those who anticipate some instability in their lives. Is it possible you could get transferred to another city? Considering a family? Going back to school? These are all good reasons to give yourself the flexibility of a shorter time commitment.

That way, if you need to leave, it's simply a matter of waiting out the rest of your lease. In most cases, even if you need to break a lease, it can be done for a penalty of a month's rent.

Source: Jeff Drongowski.

2. Maintenance
As a homeowner, I must say the amount of maintenance that goes along with home ownership is my least favorite thing about it. This is especially true if the home you own is more than a few years old, and my 1950s house is definitely full of things that need to be done.

In an apartment or rented home, the landlord generally takes care of all maintenance issues, eliminating the possibility of massive unforeseen expenses that can come with ownership. It is nice to know that if your roof falls apart, it won't cost you a dime.

3. Limited financial risk
Aside from the absence of any maintenance expenses, renting your home eliminates other types of risk as well.  You are generally protected from massive swings in the mortgage market.

I remember one friend who, in 2006, called me an idiot for renting an apartment while he was in the process of closing on his third property. He told me I was "losing out on easy money." Guess what happened to that guy.

4. One bill to pay
Home ownership has a lot of extra expenses, such as property taxes, homeowner's insurance, and closing costs that don't contribute to paying down the principal. In some locations, these can get very pricy.

For instance, in many coastal areas, homeowners are required to have flood and windstorm (hurricane) insurance, which can add a huge amount to the monthly payment. Insurance costs and taxes (to some extent) can shoot up pretty rapidly over time, meaning your "fixed" mortgage payment may not be as "fixed" as you thought.

5. The freedom to leave
In my opinion, the biggest perk of renting is the freedom to move around.

Source: Kaylan Chakravarth.

Selling a home right now is extremely difficult in many areas of the country, and I know of many perfectly good houses that have been sitting on the market for a year or more. 

In a rental situation, as long as your lease is up, you can go somewhere else for any reason, and not just when you're moving a long distance. Having another baby? Rent a bigger home. Don't like your landlord? Go find a new one. Did you get a higher-paying job? Get a nicer place to live! 

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Read/Post Comments (4) | Recommend This Article (11)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 11, 2014, at 9:38 PM, opinionartedc wrote:

    I totally disagree that renting is better than buying. Renting has it's advantages as you alluded to above but buying give you the homeowner power and the ability to run your own house as oppose to renter who have to consult the owner if they want to paint, build or do anything. people are actually tired of making other rich and they sit poor paying someone else to live in sometime roach and rat infested unattractive housing. Sorry to bust your bubble but I would rather have my own land without the mule that was promised as a part the American Dream.

  • Report this Comment On January 11, 2014, at 10:32 PM, jlclayton wrote:

    I have an issue with the idea that's always being put forward that renters don't have to deal with paying property taxes, homeowner's insurance, etc. A landlord is going to set his rent based upon several factors, one of them being the costs associated with the property they are renting out. So the renter is the one paying for those items in their monthly rent payment, as well as maintenance costs.

  • Report this Comment On January 13, 2014, at 12:28 AM, PLD777 wrote:

    I see no reason to line the pockets of the carpetbagger investment groups that have bought up blocks of foreclosed homes for a song then charge exorbitant rents hoping to cash in on the sorrows of others I would rather live in a cardboard box

  • Report this Comment On January 13, 2014, at 12:55 AM, bavb wrote:

    We are a couple of old retired people. We spent the last few years renting what I call sub-standard housing at a high price. We weren't going to buy a house so our kids wouldn't have to deal with it after we are gone. BUT, we found a wonderful 4-bedroom house with a basement and a beautiful yard and patio in a great neighborhood. We finally have space for our children and grandchildren to stay when visiting. After researching all the pros and cons, the house turned out to cost much less that our lowest rent and included taxes and insurance. We just couldn't pass up the deal. We've been here 3 years and are not at all disappointed in anything about the deal or the house. It certainly beats renting!!

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Matthew Frankel

Matt brought his love of teaching and investing to the Fool in order to help people invest better, after several years as a math teacher. Matt specializes in writing about the best opportunities in bank stocks, real estate, and personal finance, but loves any investment at the right price. Follow me on Twitter to keep up with all of the best financial coverage!

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