Whether you are a first time house hunter or an experienced mover, searching for that perfect place to call your own always is a big adventure. While it is hard not to get caught up in the excitement of decorating your new home, it is important to take time and consider whether renting may be right for you.
According to MSN Real Estate, nearly one-third, or 100 million, of Americans are choosing to rent instead of own their home. While The Wall Street Journal Real Estate reporter Dawn Wotapka cites on The Diane Rohm Show that this choice for many has stemmed from the foreclosure crisis, leaving people at the mercy of landlords. National Association of Home Builders’ David Crowe asserts that rental homes now have become the “bright spot” in housing construction. About 300,000 rental home units are being built this year to keep up with increased demand. So, why are people looking to rent?
Fewer Financial Responsibilities: Building more rental homes gives more people affordable housing options and helps stabilize rental prices. The cost of paying rent typically is less expensive than a monthly mortgage, even including initial security deposits. People do not have to worry about not having enough money for a down payment or their credit availability when it comes to renting a home. In addition, tenants are not required to pay property taxes or foot the bill for costly maintenance repairs. They do not have to worry about unexpected large expenses that often can come with buying a home.
However, it is important for renters to budget for and purchase renters insurance. While the landlord will have insurance to cover the house itself, it will not protect the renter’s personal belongings or their liability for accidents. Additionally, renters insurance can cover the expenses associated with temporary housing, should tenants need to move out during repairs.
Time to Repair Credit History: An article in Forbes Magazine states that people with low credit scores and poor credit history are finding it hard to come up with the finances needed to buy a home. Therefore, renting is more appealing to them. It offers an immediate solution, giving them time to repair and rebuild their credit. Renters are able to budget monthly costs and set aside the same amount toward living expenses each month.
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Flexibility and Mobility: Stan Humphries of Forbes Magazine writes that how long people plan to stay in their house is a major factor in deciding whether renting or buying is best. Buying a home is a big commitment. Renting gives people the flexibility to move around – without losing invested money – before they are ready to settle in a given area. Typically, buying a home is financially worth it after five years, which Humphries cites is the average amount of time needed in order to overcome the transactional costs associated with purchasing a home. For people who are likely to change jobs or want to move in under two years, renting is a better financial decision.
For information on how rent-to-own works, visit MSN Real Estate.
Vargas & Vargas Insurance specializes in getting you the right renters, home, auto, life insurance policies and more. Call today at 617-298-0655 to see how our dedicated agents can help save you money without sacrificing the coverage you need.
