5 Perks of Renting: Why Renting Is Often the Better Choice

Renting vs. Owning a home
Renting vs. Owning a home

"Rental properties", "Houses for Rent" and "Apartments" are some of the most common online search words. Open the classifieds to any local paper, and you're bound to see multiple listings on apartments for rent and rental properties. Millions of Americans today choose to lease a rental property, either temporarily or for several years. Renting offers many benefits over purchasing a home. In some cases renting is the better financial choice. Here are five perks of renting.

Perk of Renting #1: You're not responsible for home repair bills.

Whether you call it Murphy's law or just plain reality, homes will need repairs from time to time. Shortly after graduating from college, I chose to rent a small rental property in Lubbock, TX with two other college friends. A few weeks after moving into our new home, our toilet went kaput. The bill was several hundred dollars, which was covered by our landlord. Had I owned the home, the cost would have come from my own pocket. Therefore, one perk of choosing a rental property is you will not have to pay for the necessary home repairs. Whether the air conditioner takes it last breath, or a pipe bursts, you will not be stuck with any outrageous repair costs.

Perk of Renting #2: You're not responsible for homeowner's insurance, property taxes, and PMI insurance.

Renters are not liable for additional costs of owning a home such as homeowner's insurance. These other expenses add up quickly. It could mean that it is cheaper to rent a similar home than to buy. This is especially true if you do not plan to live in the area for a long time.

Sure, the key benefit of owning your home is that you gain equity. However, in some situations, the amount of equity you gain in a home might be significantly less than the money you would save by renting. If you put the money that you would save by renting into a savings account, it might be larger than the equity you would gain in your own home. When you moved, you would have more money in the savings account, than you would've had in home equity.

Take a peek at the AOL Real Estate Mortgage calculator here. Let's say you choose to buy a $175,000 home. You are able to put 20% down, $35,000, enough to avoid having to pay PMI insurance. Suppose you get a 30 year mortgage at 6% interest. Your mortgage, not including escrow (insurance and property taxes) would be $839.37. Including homeowner's insurance and property taxes, your mortgage would be about $1300/month, depending on where you lived. If you rent a similar dwelling for just $200 less than the mortgage ($1100/month), and put the difference into savings, you would be better off renting if you plan to live there for less than 5 years. Remember you would not have to pay for home repairs when living in a rental property.

Perk of Renting #3: You don't have to pay a Realtor's commission fee when you move from the home.

If you buy a home, and then decide to move and sell it, you will have to pay multiple fees just to sell the home. The biggest is the Realtor's commission, which is often about 6%. For a $175,000 home, that would be $10,500. For an $80,000 home, that would be $4,800. If you plan to move eventually, keep this in mind when choosing between a rental property and a home purchase.

Perk of Renting #4: You don't have to worry about the home losing value.

While the value of homes can increase, they can also decrease as well. When an owner chooses to move and sell the property, he/she could possibly lose some of the equity and down payment. This is one less thing to worry about should you choose to lease a rental property.

Perk of Renting #5: Renting might provide a nicer environment.

This one is especially true for recent college graduates and singles under the age of 30. The environment and life in an apartment complex might be more suitable than the life of a home you can afford. You might have a pool, club house, free lawn care and the ability to meet people your age. The overall structure of the rental property could be nicer than any house you could afford to buy. And, who knows, perhaps you'll find the love of your life just two apartments down.

These are just five basic perks for renting.� Buying a home might be the best choice for some, but renting offers many benefits as well.� For more information on renting a home, be sure to check out the renting section of AOL Real Estate here.� Happy House Hunting!�