The housing market is intimidating in many areas all around the country. For people who live in large, popular cities, the idea of buying a house not only feels scary, but impossible. Many people are choosing to stay out of the housing market completely by only renting.
For a lot of people, this might be the best (or sometimes, only) option. But for others, they may be choosing to rent because they are mis-informed on how renting vs. buying wastes money.
Some people choose to rent over buy because they feel that buying a house is more money long term. And sure, why wouldn’t they think that? When you buy a house you are responsible for any issues such as plumbing, electrical, air conditioner, etc. which would be taken care of by your landlord had you been renting. Yet, that is not the whole picture. There are some surprising ways in which renting can end up being more expensive than home ownership.
Here are 4 ways in which renting can actually cost you money.
You Have No Investment
This is the biggest and most obvious way in which renting can cost you money. When you buy a home you are not just buying a place to live; you are buying an investment. You are buying a structure and a piece of land that has the potential to increase in value during your ownership.
That means that you could, potentially, sell the house at a later date for more than you bought it, and thus make a profit. No matter how the market fluctuates or increases, you will never be able to make a profit on a property you rent.
Additionally, say you buy a house when you’re 35 years old. 30 years later after your mortgage is paid off you could theoretically be in a position to retire at 65. Had you instead rented your entire life, you would still be working like a dog to pay your rent into your 60’s, 70’s and beyond.
When you first look at apartments, landlords give you the flat monthly rent amount. This may seem like a real steal at first. But what happens when you start adding in all those extra little fees like pet rent.
Pets are becoming almost expected in every household. We love our pets! They are like family to us, and it is not likely that anyone would get rid of a pet just to save a bit of money each month on pet rent.
When you have your own house, you can have as many pets as you like, and it does not require you to pay more on your mortgage. However, when you’re renting, you will often have a large pet deposit on top of a monthly pet rent. Ouch!
Most rentals require a deposit to cover any potential damage done to the apartment. Anyone who has ever rented knows that landlords often skew what would be considered “damage” so that they can take that deposit as income. This would not happen if you were to buy a house instead of rent.
Parking Issues And Expenses
When you buy your own home, you will often have a driveway, garage, or alleyway in which to park your vehicles. A place to stow away your car at the end of the day is not guaranteed when you rent, however.
This policy changes from city to city and neighborhood to neighborhood, but there is often very little parking in big cities, so apartment complexes charge big bucks for the luxury of a guaranteed parking spot. It can be incredibly frustrating to pay sometimes hundreds of dollars simply for a patch of concrete on which to stow your car.
So what do you prefer, renting or buying a house?