Uncertain economic times “encourage” us to think about our spending habits, lifestyles and living situations. Some of the questions to ask yourself during economic upheaval include:
* How can I reduce my general spending?
* What do I need to change about my lifestyle to preserve more cash?
* Is it time to change my living situation?
During such self-evaluations, you might find yourself delving in to the idea that maybe you could benefit more financially if you were to rent a place to live rather than own.
Financial Pros of Renting
1. Few maintenance and replacement costs. When you rent a house, you don’t have to pay to replace the appliances. Plus, if the plumbing goes haywire, all you have to do is call your landlord. When it’s time to paint, you don’t have to do it.
* Some landlords will allow you to perform maintenance tasks for a reduction in the amount of rent you pay, so then maintenance you do yourself becomes income or savings instead of an expense.
* In essence, no money goes out of your pocket when the home requires maintenance or appliances need repairs.
2. No taxes to pay. It’s not unusual for even inexpensive property taxes to amount to $200 or more per month. A real benefit if you rent is you won’t have to pay separate property taxes.
3. No more bills for homeowners’ insurance. Even for a smaller home, homeowners’ insurance can cost an average of $100 per month. Alternatively, renters’ insurance is less expensive.
4. Just pay the rent. When you rent, you don’t have the headache of all the extra costs that being a homeowner entails. For a flat amount each month, you’ve got a place to live that someone else is responsible for.
5. Few worries about taking care of your home. Sometimes, home ownership can get nerve-wracking. Appliances start breaking down and keeping up with the maintenance tasks can be costly and entail a lot of work. When you rent, these issues are left up to someone else.
Exploring Home Ownership
Although you now see the advantages of renting a home, there are other issues to think about as well.
Consider the following questions regarding home ownership:
1. Do you know how to do home maintenance and repairs? Do you like to do home maintenance tasks? Some people enjoy these types of “busy work” tasks. Others find them to be an interruption to their lives.
* If you know how to do maintenance tasks (painting, performing various “fix-it” jobs and the like) and you don’t mind or even like doing them, you’re one step closer to home ownership.
* Of course, it’s necessary to set aside a maintenance budget for these tasks.
2. Do you plan to stay in your home for more than a few years? Home ownership is something that tends to pay off over the long haul, rather than in the short term, like renting.
3. Do you have steady income that provides enough money to provide for your family? Having some extra money each month makes home ownership a lot easier. When you make adequate money, it’s less stressful to handle owning a home.
If you answered, “yes” to all three questions, home ownership may be the best choice for you. On the other hand, if you answered “no” to even one of these questions, renting might be your best option.
When determining whether to rent or own a home, consider all the angles. If money is scarce, your job is not as steady and predictable as you’d like, and you don’t know how to do maintenance tasks, jumping into home ownership may not be the best plan for you. Renting might be your best choice for now.
If, on the other hand, you have the maintenance skills, love the idea of taking care of your home after work, and have an income you can count on, it’s time to take the leap into home ownership.