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.
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.
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.
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!
Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.