5 Reasons you should rent instead of buying a home

Why would someone consider renting a home when prices are going up significantly? There are so many social stigmas that are attached to our living arrangements. Buying a home in 2022 sometimes does not provide the same wealth that it did 50 years ago. In most cases, owning a home can is a stronger financial move but there are a variety of factors that contribute to making that statement true.

• What market the home is in
• The price point
• When the home was built
• The amenities around the community
• The community features

Let’s discuss 5 reasons you may consider renting a home over purchasing.

You need Flexibility

Event with the market going up. Once you elect to sell the home you’ll likely incur about 7-9% of the home’s sales price in expenses. Commissions, repairs, closing costs, Etc... So even for you to break even, your home will need to appreciate 9%. Sometimes, that can take years. Renting a home gives you the flexibility to get out by:

1. Completing your lease
2. Buying out your lease
3. If approved, finding a tenant that will replace your lease.

The timing is not right

Maybe you don’t know where you want to plant your roots. Maybe your job is not ideal. Maybe where you are is not the best place to raise a family. We can’t tell you how many times we have seen people purchase in a new area only to find out later they wished they would have known a little more about where they were moving.

You don’t have the down payment

Did you know there are mortgage programs that require as little as 0-3.5% down? There are also some mortgage products that require upwards of 20%. In a recent survey the average consumer assumed that the required downpayment needed for a specific home was much higher than it actually was.

If you are curious as to what downpayment is required for what you are searching for, speak to your lender for your ideal options.

You're in an area for a short amount of time

Similar to flexibility we mentioned above, sometimes buying a home when you will only be in it a short amount of time ends up being more expensive than simply renting. In today’s market on average, purchasing a home for 3 years or longer normally results in an equity check at closing.

You also may be testing an area to see if that is where you actually want to plant your roots. The schools, shopping, amenities, crime, and active activities. 

Leases are easier to get out of

There will always be people that need to rent a home in any market. Have an open discussion with your landlord upfront on what your options are if you need to end the lease early. Most landlords are ok with a new tenant that is qualified that will pay the same or more as you were committed to.