Owning a home is a big responsibility and investment — one not everyone can or should take on. Renters are often told they're "throwing money away," but are they really? Here's a look at five reasons renters actually may be a step ahead of buyers.
1. You get more perks and have less to worry about.
“The last time I checked, most homes don’t come with a gym, a swimming pool, a clubhouse, a deck or other amenities.” Rental properties are getting nicer and nicer, and they offer the kind of perks that you just don’t get when you buy a home.
With a rental property, there’s no need to worry about cutting the grass, maintaining the roof or the water heater and paying property taxes every year, Purcell says.
2. There’s no guarantee you’ll make any profit off your home, and it’s not a liquid asset.
While it’s likely you'll make money from homeownership, you can't predict market volatility.
Homes are not an investment you can ever be certain about — there’s always an element of gambling. Although time generally “heals all wounds” in terms of market volatility, if you don’t have 20 years to wait around, renting is often the safer option.
3. You can be as mobile and as flexible as life dictates.
If there’s one thing we know about Millennials, it’s that they value flexibility. Younger people value happiness in their jobs more than they value job security, so they’re not afraid to pick up and move. They’re portable.
If you own, it can take several months — sometimes years — to sell a home.
Millennials know this. They say, ‘Why do I want to tie myself to an expensive investment that prevents me from taking advantage of the opportunities that come my way?’
People who plan to buy a home should be committed to an area for at least five to ten years to break even on their investment. To make a profit, you need to be committed to an area for at least 10 years, and that can seem like an "eternity" for a mobile generation.
4. The people who really “throw money away” are often those who buy.
Renters aren’t throwing money away every month, but buyers might be.
You can throw more money away if you buy a home that’s a [bigger] mistake than you ever could on renting. When you get ready to sell, if you have not recouped the money you put into the house and then you have closing costs, brokers fees, it can cost you tens of thousands of dollars.
Also, homeowners who need to move unexpectedly may find themselves faced with paying two mortgages or a mortgage and rent.
If you own a home, you can’t say, ‘I’m going to sell my house tomorrow,” but if you rent, you may have the option of going on a month-to-month lease and leaving whenever you like.
5. You’ve got a ready-made sense of community.
Many apartment complexes provide instant community and neighborhood connections, Purcell says. From community bulletin boards to weekly yoga classes or once-a-month potluck dinners, today’s apartment buildings offer much more than just a roof over your head.