Despite its own challenges, renting has many advantages.
First, renting costs less. Not only do you avoid the expenses that come from buying and maintaining a home, but if a room in a shared space is all you need, then renting allows you to pay less for a smaller space. You’ll still have a kitchen to use and may even have some storage space, but if a room is all you need, then there’s no reason to buy a house. And renting almost always costs less than buying, especially when you share (see below). You’re young, you’re trying new things out, and you’re learning about life—you don’t need to worry about having to take care of a house on top of everything else (do you really want to come home from a long day of work and have to mow the lawn?).
I started out renting a room from a friend—sharing the cost of it with him because we were sharing the room (literally we had 2 beds in 1 room). We eventually moved out and got a house to rent, which cost a little more, but my monthly costs were much less than any house I could have purchased. Sharing that house cost us each $600/month, which is $7K a year (I was making around $70,000 at that time or 10% of my income on rent).
Second, renting is less (of a) hassle. When you rent, you don’t have to worry about keeping up a house and a yard. Yes, you need to keep your room and common areas clean and not destroy your rental (more about this soon), but renting means you don’t have to worry about repairs or upgrades, and in many cases, even utility costs are folded into your monthly rent. At this stage in your life, you need to be focused on your work life and your social life, not on being a homeowner.
Third, and this is related to the second reason, renting allows you to pursue opportunities more easily and quickly. If you’re renting and suddenly get a job offer out of state, you’ll be less likely to turn it down because you’ll have to move. If you’re month-to-month, leaving your rental is no problem. And even if you’re in a lease, you can almost always find someone to assume your lease, and in some cases, rental companies will help you do this and will work with you (or your new company will cover your moving costs). But if you own a home and you get an opportunity out of state, moving takes much longer and is much more complicated.
You have to list your house and sell it, and that can sometimes take time. And even before you list it, you probably have to make some repairs or do some cleaning and renovation, which again takes time. So, you have a choice. You can rent and be more free to follow your dreams, or you can own and be more tied down to a place you may need to leave. (remember money is infinite, time is not).
Joshua Krafchick, “Unconventional Money Guy”
Additional Articles About Home Ownership:
3. I Gave Up a $400,000 House for an Apartment
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