Worried You'll Never Be Able to Buy a Home? 3 Reasons Why Renting Is Good for Your Finances, Too

It's more than possible to rent and still meet your financial goals.

It's fair to say 2021 was a tough year to buy a home. And so far, 2022 is proving to be no different.

Not only are home prices still way up across the board, but housing inventory is still extremely limited. What’s more, whereas mortgage rates were very competitive throughout 2021, so far, they've risen quite a bit this year. And while they're still fairly low from a historical standpoint, they're higher than the rates we've seen in a good year and a half.

All of this paints a pretty discouraging picture for today's prospective buyers. But if you're worried that homeownership will largely be out of reach for you, fear not. Being a renter does not have to doom you to a lifetime of financial instability. In fact, here are a few reasons why renting might benefit you financially.

1. You won't have to deal with variable costs

When you own a home and sign a fixed-rate loan to finance it with, it's really only your mortgage payment itself that stays the same for years. Your other costs, like maintenance, insurance, and property taxes, could fluctuate.

When you rent, you're locked in to a single payment for the duration of your lease. Sign a lease for a home that costs $1,200 a month, and you won't have to pay more than $1,200 for a roof over your head. Not having to contend with changing costs could actually make it easier to manage your money and build savings.

2. You won't have to pay for sudden repairs

When you own a home, every little thing that goes wrong with it becomes your financial liability. That's not the case when you rent a home.

Sure, if you rent and an item of yours (like a lamp or microwave) breaks, you'll have to pay to replace it. And if poor choices on your part cause damage to your rental (for example, you decide to engage in an aggressive game of floor hockey with your friends and make a massive dent in your wall), then you may be responsible for repairs.

But for the most part, when you rent, repairs are your landlord's responsibility. If your oven stops working out of the blue, that's not your financial problem to deal with. Not having to pay for repairs could leave you with more money to save or invest.

3. It may be easier to move if need be

The option to move could make it possible to pursue a better-paying job. And if that opportunity presents itself and you're a renter, you may be able to get out of your lease pretty easily.

Even if you're not on a month-to-month agreement, your landlord might be flexible if you give 30 days' notice and they're able to find a replacement tenant. Or, you might pay a modest fee to break your lease early.

But that's still a lot easier than selling a home. Even if you find a buyer quickly, it can often take 60 days or more to finalize a mortgage. In that amount of time, you might lose out on certain career opportunities.

Owning a home could be a good thing for your finances. But if it's not in the cards right now, don't sweat it, because you can still do well for yourself as a renter. Plus, even if you never manage to own a home in your lifetime, it doesn't mean you'll never attain financial security. You may just take a different path to get there than someone who owns a home and builds equity in it.