Rent or Buy? When Renting is the Better Option
Contributions done by Mikayla Orser & JW Rayhons
Owning a home is considered a major life event. However, is it really a good fit for you? Renting a home means that you eliminate some obvious aspects of buying, such as: massive amounts of paperwork, property taxes, and maintenance costs. You will need to evaluate your desires as to what you are looking for in the long run. So, when is renting better than buying?
Location, location, location
Renting may give you the opportunity to live somewhere you wouldn’t normally be able to afford. Colley mentions that, “finding an affordable home to buy may mean moving into less popular areas” (2014). This opportunity to rent may allow you to live in an area you would prefer to be. Haury states, “renters can live practically anywhere...” (2020). If location is major factor in buying or renting, you may need to consider renting.
There are various costs associated with home buying: property taxes, down payments, inspections, maintenance and repairs, and homeowner’s insurance just to name a few. However, as a renter your costs are limited to rent, renter’s insurance, and possibly a security deposit. There may be other costs associated with renting, but these three are the most blatant. When renting, your landlord is responsible for repairs, maintenance, property taxes, and in some cases utilities (Haury, 2020). Cost is typically a major factor in buying or renting a home, in this aspect you may need to weigh the pros and cons, the apparent costs, and what you can realistically afford when it comes to a home.
As a renter you will have flexibility for downsizing, or upsizing. You are locked into a lease for a specified period of time, but once that period of time ends you can choose to renew your lease, upsize, or downsize to a different location. Haury writes, “It’s much more difficult to break free of an expensive house because of the fees involved with buying and selling a home” (2020). The flexibility to live where you want and having the option to change your unit size are aspects to consider.
When it comes to renting or buying it is important that you list your must-have’s, be realistic about what you can afford, and do research on locations you would prefer to live. After some time of reflection on these items, you may find that renting is a better fit for you. If you have further inquiries about what you can afford, we encourage you to reach out to a financial professional for advice.
If you are looking for a financial advisor team focused on your unique financial situation, communicates openly, and that puts you and your goals at the center of the relationship, call us at (480) 507-2425 or contact us online. We’d love to meet you.
Mikayla Orser is a Non-Registered Associated Person with Voya Financial Advisors. Mikayla cannot offer securities or advisory services.
The content in this article was prepared by the article’s author. Voya Financial Advisors, Inc. does not endorse its content, and the views expressed may not necessarily reflect those held by Voya Financial Advisors, Inc.
Haury, A. 2020 Sept. 21. Investopedia. 10 Reasons Why Renting Could Be Better Than Buying. Retrieved from: https://www.investopedia.com/financial-edge/1112/reasons-renting-is-better-than- buying.aspx#:~:text=One%20of%20the%20benefits%20of%20renting%20a%20home,is%20responsible%20for%20all%20 maintenance%2C%20improvement%2C%20and%20repairs.
Colley, A. 2014 Jun. 4. Realtor.com. 6 Reasons Renting is Better Than Buying. Retrieved from: https://www.realtor.com/advice/rent/6-reasons-renting-is-better-than- buying/#:~:text=Here%20are%20six%20reasons%20why%20renting%20is%20better,or%20beach%20communities%20ar e%20typically%20more%20renter%20friendly.