For many, this is typical life cycle: get an education,
get a job, start a family, and finally, buy a home to raise the kids in. We view homeownership as the ultimate life goal; a sign that you finally made it in life. However, as times change, ma
ny people, especially millennials, are opting to rent over buying a home. Homeownership rates amongst millennials are lower than the national average. Here are the reasons why they are choosing renting over buying:
Buying a house is one of the biggest commitments of your life. You must do a lot of research to ensure you like everything about the house, since you are going to be spending most of your time there. Once you sign on that dotted line, there is no going back. However, with renting, there is a higher level of freedom and flexibility in choosing where you want to stay. You can even decide to be adventurous and try living in an up and coming neighborhood. All this is made possible by the fact that you can move to a new place much more easily. This comes in handy for people who like roaming or whose jobs require them to move frequently.
When buying a home, it is important to remember that someday you may have to sell it. Most owners who have sold, or tried to sell their homes, will tell you it was not an easy task or, they had to settle for much less than the original asking price. The truth is, when reselling any home, you have to face competition from the new properties in the market. If your home is old or poorly maintained, it could take months to sell it. In some cases, especially in inactive markets, finding a buyer for your home can be close to impossible. When renting, you don’t have to lose sleep wondering how on earth you will sell the house when you are ready to move out.
When you own a home, you are in charge of taking care of any repair and maintenance costs that come up, regardless of when they come up. If any appliances stop working or your home suffers any structural damage, you have to spend money to get it back in tip-top condition. This can be a huge inconvenience, especially when the repairs are unexpected and expensive. When you rent a property, the landlord is in charge of all maintenance, repair, and renovation costs.
When buying a home with a mortgage, you need to save money for the downpayment, usually at least 20% of the price of the house. According to Zillow, the average home value in the US is $210,200. This means that on average, if you want to own a home, you need to have about $40,000 for the downpayment. For many people, particularly young people, this is practically impossible. Renting a home requires less financial commitment, as most landlords require a rental deposit (usually equal to one month’s rent) and payment for a few preoccupation costs. With the average monthly rental prices in the
US currently at $1,600, you need less than $5,000 to rent a decent home, which is much more affordable than the $40,000 you need to buy.
Obviously, since you don’t own the property, you are not expected to pay real estate taxes. Property taxes can be a huge burden for homeowners particularly those that own large, expensive homes. Property taxes can also be added to your monthly mortgage payment, driving up your monthly costs.
Written by: DorrianGrey, iWriter