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It’s more than possible to rent and still meet your financial goals.
Key points
- There are several financial benefits to owning a home.
- In spite of those, renting can be a savvy financial move.
- Renting means your housing costs will be predictable and you can move more easily when you need to.
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 …….
