Owning a home isn’t right for everyone
Although owning a home is a lifelong goal of many people, renting has advantages too. Home ownership isn’t for everyone. According to the latest available official figures, Malaysia has a home ownership rate of 72.5%. This is a relatively high number considering that home ownership rates in developed countries, but this hasn’t always been the case. Historically, families either needed to build their own homes or rent a home from someone else.
For some people renting might make more sense for their financial circumstances. Below are 7 advantages of renting, instead of buying, a home.
1. No Maintenance Costs or Repair Bills
One of the benefits of renting a home is that there are no maintenance costs or repair bills. When you rent a property, your landlord is responsible for all maintenance, improvement, and repairs. If an appliance stops working or your roof starts to leak, you call the landlord, who is required to fix or replace it.
Homeowners, on the other hand, are responsible for all home repair, maintenance, and renovation costs. Depending on the nature of the task, it can get quite pricey.
2. Access to Amenities
Another financial benefit of renting is having access to amenities that would otherwise be an enormous expense. Luxuries such as an in-ground pool or a fitness center come standard at many middle scale to upscale apartment complexes with no additional charge to tenants.
If a homeowner wanted to have access to these amenities, it would likely cost thousands of dollars for installation and maintenance. Condo owners would need to pay monthly fees for access to them.
3. More Flexibility as to Where to Live
You can live practically anywhere, while homeowners are restricted to areas where they can afford to buy. Living in an expensive city such as New York might be out of reach for most home buyers, but it might be possible for renters. Although rents can be high in areas where home values are also high, renters can more readily find an affordable monthly payment than home buyers.
4. Few Concerns About Decreasing Property Value
Property values go up and down, and while this may affect homeowners in a big way, it affects renters substantially less, if at all. Your home value can impact the amount of property taxes you pay and the amount of your mortgage. In a rocky housing market, renters may not be as adversely affected as homeowners.
5. Flexibility to Downsize
You have the option to downsize to a more affordable living space at the end of their lease. Such flexibility is especially important for retirees who want a less costly, smaller alternative that matches their budget.
It’s much more difficult to break free of an expensive house because of the fees involved with buying and selling a home. Also, if a homeowner has invested a significant amount of money in renovations, the selling price might not cover these costs, leaving them unable to afford to sell and move.
6. Fixed Rent Amount
Rent amounts are fixed for the span of the lease agreement. While landlords can raise the rent with notice, you can budget more efficiently, because you know the amount of rent you are required to pay.
Fixed-rate mortgages also allow for efficient budgeting, but adjustable-rate mortgages can fluctuate, often resulting in rising mortgage payments due to higher interest charges. Property taxes are another variable that can increase costs for homeowners but don’t affect renters.
7. Lower Utility Costs
Although homes can vary in size, they are typically larger than rental apartments. As a result, they are more costly to heat and also can have higher electric bills. Rental properties typically have a more compact and efficient floor plan, making them more affordable to heat and power than many houses.
The Bottom Line
Owning a home can be beneficial for you over the long run, due to the amount of equity they acquire in their home. Renters have nothing tangible to show for years of rental payments. However, if you are looking to avoid the hassles of home ownership, the costs of upkeep, and property taxes, renting might be a better option. Of course, it depends on each person’s lifestyle, financial situation, and whether is working or in retirement.
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