Why You Should Never Rent
When it comes to deciding whether to rent or buy a home, there are compelling arguments for and against each path. Renting is, in a sense, a hands-off approach to living, and does provide a certain level of freedom and lack of responsibility.
However, from a long-term perspective, renting for a long period of time is a bad idea for many reasons, and in this article we’ll discuss some of them.
It’s sometimes cheaper to buy
Depending on the price of the property, buying a home could actually be cheaper than renting; your mortgage repayments could be considerably cheaper than your rent.
Plus, you have to factor in the upfront costs of renting – security deposits, agency fees, and advanced rent (2 months upfront is not uncommon).
You could be paying a small fortune before you’ve even moved in! This money could have gone towards your mortgage.
You don’t accumulate equity
Your landlord more than likely has a mortgage on the property, and guess what: every time you pay your rent, you’re paying his/her mortgage.
Thus, you’re left with nothing to show for all of those payments. No equity of your own that you’re building, despite the fact that you clearly are able to afford mortgage payments.
You’re at the mercy of your landlord
It goes without saying that your landlord can terminate your tenancy agreement at any time.
Whether they’re selling the property, renovating it or just want their own family to move in (it happens!), if s/he’s so inclined and has given adequate notice, there is little stopping them from kicking you out onto the street.
Your landlord can increase your rent whenever they want. Although notice needs to be given, they’re well within their rights to raise the rent on you unexpectedly.
This is often the ploy used in areas with high gentrification, in an attempt to get poorer people out of up-and-coming neighborhoods.
You can’t make major adjustments to the property
Most landlords won’t allow you to make long-lasting, major changes to the property, and doing so without their permission could be against the tenancy agreement. You could face eviction or lose your security deposit.
Less drastic changes, like painting, are also forbidden by many landlords, leaving you with a home that you can’t really put your personal touch to.
In this way, it never feels like your home.
You have to rely on others for maintenance and repairs
When something goes wrong in the property and you didn’t cause it, you’ll have to wait for the landlord to send a maintenance person around to fix it.
This means that when your toilet breaks or the electricity goes out it’s up to the landlord to handle that. Now, this doesn’t seem like such a bad thing on the surface, but it can be infuriating if your landlord drags their feet or doesn’t want to pay for repairs.
Moving out while still under lease will cost you
If you need to move out before the end of your lease, it’s up to the landlord if they’ll allow you to, and they may charge a fee to get out of the contract early.
However, as you’re still under contract, you’ll still be liable for the remainder of the rent until the lease expires.
What alternatives to renting are there?
If you’re not in a position to buy, and renting also doesn’t appeal to you, you might want to consider a rent-to-own/rent-to-buy program.
What is a rent-to-own program?
Rent to own is a term for buying something with the intention of owning it at some point in time. These are great for people with bad credit and those who have had difficulty getting a mortgage.
How does it work?
the person agrees to a contract that says they’ll rent the home for some time, and at any point during this lease period, if their credit and finances improve, they can buy it.
You would still need to apply for a home loan, but the idea is that you’ll have gotten yourself back on your feet financially, so you shouldn’t have a problem being approved.
Think about all the money you’ve spent on rent over the years. Add everything up. That number right there is the amount of money you would have paid off your own home had you chosen to buy it instead of rent.
Owning property could be a part of your retirement plan, but renting gives you no such security, and should only be a temporary arrangement.