April 2017

Buying a house or a condo is a big decision. Are you willing to commit the next 20 or more years to paying off your home or dealing with the stress of selling? For some people, buying is the best choice, but in many cases, might be the better option.

Here are some situations in which renting makes a great deal of sense. 

You don’t know where you’ll be in five years.

One of the best aspects of renting is the flexibility. When you’re young or figuring out your next move, you may not feel settled enough to make the home-buying commitment. Selling a house before you’ve lived in it for a five-year period doesn’t make much financial sense. Closing costs often come in around 10% of the price of a home, so it takes five years before you can compensate for those costs. If you’re not sure whether or not you’ll be sticking around that long, renting is the smarter option.

You’re retired.

There are plenty of things to consider when you retire, and where you’re going to live is one of the most important choices. While homes are traditionally considered to be a wise investment, given the recent condition of the housing market, your house may not appreciate significantly within your lifetime. Renting provides you with the benefits of not having to perform maintenance yourself or shoulder the ever-rising costs of property taxes and insurance.

You’re new to the area.

When you’re making a big move to a new area, you might think you’ll feel more settled if you get a place that belongs to you right away. But you might want to think twice about that. You may find that you don’t like your job or the city and want to move again. You’ll also get a much better feel for which neighborhoods you like once you’ve lived in the city for a year or so. Your coworkers and friends can tell you about the cool hangouts, school districts, and area reputations, and you can take some time to gauge where you enjoy spending your time. If you rent and find your new neighborhood is completely different than what you expected, you can pick up and move. If you’ve bought a home, you’re out of luck.

You’re planning for tax deductions.

One argument people use to convince you to buy a home rather than rent is that is the interest on your mortgage is deductible while your rent provides no such benefit. But this deduction is often overemphasized. You can only claim it if your personal itemized deductions equal more than the standard deduction. And it’s likely this deduction won’t apply later in the life of your mortgage since the interest payments decrease as time goes on. People also sometimes confuse the deduction with a tax credit. A credit will give you a specific dollar amount off your tax bill, while a deduction will just decrease your taxable income.

You want more free time.

When you live in a rental home, your honey-do list gets a whole lot shorter. You’re not responsible for repairs that keep your home in livable condition, and depending on your lease agreement with your landlord, you may be able to get off scot-free for even minor repairs. This will free up all that time that you otherwise would have spent fixing leaky faucets, broken shingles, or whatever other unsightly damage you or your partner found around the house.

Renting provides an opportunity to simplify your life, maximize your options, reduce your expenses, and let someone else worry about the honey-do list. For a lot of people, it just makes sense! If renting is right for you and you’re looking for a new home in the Rochester area, be sure to schedule a tour at Elmwood Manor. Our quiet community of apartments and townhouses, set against the incredible backdrop of Highland Park, offers something for everyone!