Rent Yes or No?
Should you rent or buy? The answer depends on a multitude of items and in today's world most of that is a result of the economy, your personal goals, budget, and personal tastes. However, we have put together some thoughts on the benefits and reasons to rent for your convenience.
Advantages of Renting
The freedom When you own a home, moving can be difficult if not impossible as you are confined by a mortgage and have to sell first or rent to someone before you move. If you have to sell quickly in order to transfer, you sell at a loss and the equity advantage of owning your own home is eliminated. Renting affords you the ability to move with 30 days notice or if you truly want to move immediately the most you lose is your deposit.
Less upfront expense Renting will cost less than moving into your own home, especially when you consider a down payment and closing costs "plus" typical renovations you feel are of paramount importance as you own the home upon moving in. Renting costs include first month payment and a security deposit which is typically the same amount as your first month rent.
Lower maintenance costs and issues Renting a home, apartment, or commercial space keeps your budget in place in spite of any damages, repairs, or upgrades. You have an issue with any repair, then a call to the landlord makes that a priority and cost for them and does not come out of your pocket. The best managed apartments even have on-site maintenance that can handle repairs while you're at work and be done before you come home. When you own your place the responsibility and repair bills are yours.
Lower insurance costs Renters insurance is more than affordable and in comparison with homeowners insurance in Kentucky are a very minimal expense. RentLocal does recommend that you purchase rental insurance from a reputable insurance agent to ensure you are covered in the case of any emergency, break ins, or damages to your personal property as the landlord's policy does not cover it. Also, if you are the reason a home burns down, it covers your liability.
Easier tax preparation Renters have less recordkeeping and shorter forms to fill out when it comes time to prepare there income taxes. That's because they can't claim a mortgage interest deduction which goes directly to the "advantages" of owning a home or commercial property.
Disadvantages of Renting
Limited Choices | Freedom Choices for location, size, options are limited by what is available to rent locally and your budget. Suddenly location, school district, number of bedrooms, size of the yard, and granite counter tops are not your top concern. Once you find a property available for rent, you have to seek the landlord's permission to make any changes at all to the property including painting the walls, planting flowers, or upgrading any room. It is possible you can get the approval if you pay for those upgrades, however, it is not a tax benefit for you and it remains with the property when you leave.
Be especially concerned if you have pets, because this will limit where you can rent, will incur larger deposits, and if there are any damages at all will mean large fines.
No tax advantages Renters miss out on a lot of valuable tax breaks that owners can claim. These include deducting the interest paid on mortgages, writing off certain repairs, credits for energy-efficient upgrades, and more.
No investment or equity Over time, most real estate will appreciate and create a source of wealth for the owner. Renters build nothing more than an empty register of check stubs. Of course, if you can rent for a lot less than it would own that money can be invested and still work for you. However, in the local market there is a shortage of nice rental property which means you often CAN buy for less than what the payment on a home will be.
Less stability As a renter, you can not control where you live beyond the terms of your lease. You can be forced to leave at any time, sometimes even before your lease runs out. As an owner, as long as you can pay your mortgage and taxes, you can stay put.
Personalize Most rental properties are white walls, generic carpet, and basic kitchens and they want to keep it that way so personalizing your home is in furniture, art, and accessories which may not work in every rental property. It means you have to be more creative in your ability to make that space reflective of your style.