- Renting in a complex or a high-rise building might come with some pretty cool amenities at no extra cost.
- Down payments for rental homes are far cheaper than a mortgage down payment.
- Housing values decreasing in your area? This doesn’t matter if you rent.
Except for a period of two years where I lived in the house I bought for the wrong reasons, I’ve spent my adulthood as a renter. For many people, owning a home is the cornerstone of the American Dream. While I’m currently getting my finances in order in hopes of owning a home again myself some day (I’m now older and, I’m hoping, wiser), I realize that renting has benefited me in a lot of ways during my last decade of upheaval and career moves. The same is true for a lot of people, and if you’ve ever felt as if renting somehow makes you less financially savvy than a homeowner, please evict that feeling from your brain!
For one thing, homeownership comes with a lot of costs you may not be expecting (and may not be ready for), and for another, renting gives you the ability to more easily move if you need to. As I used to say during my years in a career that was more location-based than my current one, “It’s much easier to break a lease than to sell a house!” Aside from the cost savings and greater location freedom that come with opting to rent over buy, here are four other perks of renting that you may have overlooked or never considered before.
1. Access to amenities
I’ve spent the last several years renting single-family homes and large apartments in old two- or four-family houses. As a result, it’s been a long while since I had access to any special amenities outside of my home (other than the privilege of being close to a few lovely parks and outdoor recreation areas in some of the neighborhoods I’ve lived in). But if you rent an apartment or condo in a large complex or high-rise building, you likely have free access to the kind of amenities that would cost you extra if you owned a house. These could include an on-site gym, a swimming pool maintained by your leasing company, or even a dedicated business center with internet access and printers. What a sweet perk.
2. No down payment
If you want to buy a house, you’ll likely have to make a substantial down payment. In fact, it’s recommended you put down 20% of your home’s purchase price when you get a conventional mortgage, to avoid having to pay for private mortgage insurance (PMI). But if you’re moving to a new rental home, chances are you’ll only be asked for the first month’s rent and a refundable deposit equaling another month or two. There may also be a pet or cleaning deposit, and these may or may not be refundable, depending on your circumstances and your landlord’s requirements.
Homes in my city have a current average value of $174,102. If I wanted to buy a home at this price with a 20% down payment, I’d be shelling out almost $35,000. But when I signed the lease for my current apartment in 2021, I sent my landlord less than $2,000 for both my first month of rent and a deposit equal to a month. I live in a pretty cheap area! Imagine how much you’d need to put down if you were buying in one of the costlier parts of the country.
3. Not having to worry about property values decreasing
An argument you’ll often hear from proponents of homeownership is, “Housing values always go up!” While it is true that over time, property values do often rise, this isn’t a guarantee. In fact, as the Federal Reserve implements rate hikes in an effort to stem inflation, mortgage interest rates are on the rise, and the housing market is cooling off. If you rent, it likely doesn’t matter to you that your landlord’s property might be worth less than it was earlier in the year. But if you own, and might be looking to sell your house? That’s a different story.
4. Lower insurance costs
Finally, it is of note that renters insurance is far less expensive than homeowners insurance. Homeowners insurance covers the entirety of the property, and therefore costs more. If you’re renting, your landlord is responsible for this cost. It is highly recommended that you purchase a renters policy, however; this will cover your belongings in the home in the event of a catastrophe like a fire. A landlord’s homeowners policy will not cover your losses.
Embrace that rental lifestyle, if it’s working for you, and you have my permission to sternly glare at anyone who tells you, “Renting is throwing money away!” It isn’t; you’re paying for a roof over your head, and you’re also likely benefiting from some of these sweet perks.
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