Why renting property may be a wise financial choice
If you are struggling to get your foot on the property ladder, due to poor credit or a lack of finances – it may not be a bad thing. Although we live in a society where buying a property seems to be a factor which makes people feel like they’ve made it in life, it is often not all it cracks up to be. You shouldn’t feel disheartened if you can’t buy a property; these are some reasons why renting might make more financial sense.
One of the major benefits of renting a property instead of buying is that you have much greater flexibility. If you have bad neighbours, for instance, you can just up sticks and leave the property, without any hassle. If you decide to move abroad or get a new job further afield, you can do it at the drop of a hat when you rent. When you buy property, you are tied to it and still have the burden of paying a mortgage, even if you decide to move on. If you are the type of person who doesn’t want to just settle in the same place for the rest of your life, renting is probably a more favourable option for you.
No repair costs
If something goes wrong and you own the property, you are responsible for taking care of the costs. You need to pay for repairs and any general maintenance of the property. If you rent, your landlord or letting agent is responsible for picking up the costs. These costs can be quite substantial at times and can eat into your savings, or cause you to need emergency funds, such as payday loans. If anything goes wrong and you rent, you just call up the owner and let them know and they should take care of it and cover the costs.
It might seem that renting a property is throwing your money away, but the money you save on insurance, repairs and the like can help towards other things. You can actually have more savings when you rent, as you only have the cost of living to pay for – no other costs. Owning a home can be extremely expensive and you don’t actually own it at all until the mortgage is completely paid off. You really don’t have much more security when you are paying a mortgage. If you can’t keep up with the payments, you can still be asked to leave.
You may not be able to afford to buy a property in an area you love, but you can have this option when you rent. In the same way that renting a car gives you access to vehicles you could only dream of owning, the same applies to renting a home. You have a much better chance of being able to afford to stay in your dream home if you rent, rather than buy.
No credit check
When you let a property, you generally won’t be required to undergo a credit check, or if you do – it’s usually not a strict one. The prospective landlord only wants to know that you are earning enough money to pay the rent, they are usually not too bothered about anything else. This is not the same as taking out a mortgage, as you need to undergo a strict credit check before you will be accepted and this is why so many people simply can’t afford it.
The size of the deposit is a major reason why people can’t get on to the property ladder these days, but with renting, you don’t need to worry about this. Although you still need to pay a deposit, it is usually only the same amount as the rent payment, which is significantly less than a deposit to buy a home.
Overall, renting a property can be a lot less stressful than owning. You have the freedom to come and go as you please, which means you don’t need to put up with nuisance neighbours or anything else which might be causing you grief. If you want to leave, you don’t need to wait until the place has sold and, quite often, this can take months or even years!