4 great reasons you should rent instead of own

The notion that renting a home or apartment is a superior fiscal strategy to owning is one that flies in the face of many years of overheated growth in the real estate market, along with the certainty that owning a home is an investment certain to appreciate. Uncertainty about the future provides circumstantial evidence that renting is more attractive right now. A closer look reveals four considerations that prove the point beyond a doubt: right now it is better to rent than to own.

Renting costs less. Renting is not just “throwing your money away,” especially compared to the numerous fees and charges accrued by home buyers simply as the cost of doing business. Consider the following common expenses for those purchasing a home:

• Closing fees
• Mortgage interest
• Property taxes
• Private homeowners’ insurance
• Maintenance costs

This is a partial list and does not take into account difficult to quantify opportunity costs associated with diverting funds to homeowner expenses, or the additional cost in time required by upkeep duties. These are all costs that return nothing on investment. Bottom line: buying a house is loaded with costs beyond the sticker price.

Tax deductions and incentives to buy are disappearing. The first-time homebuyer tax credit lapsed over a year ago. The tax deduction for interest paid on home mortgages is under review; part of a solution to ongoing federal budget and revenue negotiations may include reduction or outright elimination of this deduction. With attractive incentives disappearing, likewise is the unquestioned appeal of buying a home.

Renting provides you more options. Even in a market that is trending to favoring landlords, renting offers more flexibility in selection. Numerous amenities common to apartments cost extra for homeowners: on-site gym, swimming pool, outdoor recreation areas, and more. Renters are finding they have much more to choose from than would-be purchasers.

Renting offers more flexibility. It is very difficult to overstate the commitment and responsibility involved with owning a house. If you need to relocate for work, as a renter your worst-case scenario is that you have to work with your current landlord to find a new tenant (and you may have to surrender a modest fee). As a homeowner your path is more fraught, especially in the current real estate environment that may require months for a prospective buyer to qualify for a loan… if a buyer can be found at all.

Renting offers the flexibility that comes with easy mobility. In a challenging economic environment that prizes rapid response to potentially far-flung opportunities, that translates into a peace of mind that far exceeds typical valuation.