As you begin the process of saving money for your home down payment you are giving some more thought to what the downside of renting a home is versus buying a home. There are a number of valid reasons for both sides of this equation as you found in our recent article renting pros and owning cons. So let's discuss some of the downsides of renting a home versus buying a home:
Renters Experience Lack of Control
Most homes today do not enjoy rent control. This can result in your rent being increased annually if you rent with a one year lease depending on the other expenses and costs that are included as part of your rent. Unfortunately, your rent can be impacted by such things as a spike in utility costs (if your utilities are included), an increase in local property taxes (since the property owner is responsible for these and they have the right to add them onto rental income) and even something as simple as increase in trash fees in your town. Buy your own home today and you will be able to take control of many of these costs.
Who Really Ends Up Paying Maintenance Costs?
While property owners are typically responsible for maintenance costs, these costs are often passed off to the person who is renting the property from them. These costs can mean a substantial increase in rental expenses as the property gets older and requires more upkeep. For those who are renting and saving towards a down payment, this can have an impact on your savings program.
Renters Are Unable To Modify Their Unit
As a renter (versus being an owner) you are often tied into the paint and color schemes that your landlord chooses. Many leases include clauses that you will not alter the colors of the home (interior and exterior), add (or remove) wallpaper and often this includes being forced to use the appliances that the owner of the property has included in the property. Leases (or rental agreements) can have serious restrictions that inhibit you as a renter from changing things to suit your taste.
Outdated Appliances - Outdated appliances in fact do impact the renter significantly. Not only are these appliances more subject to breakdowns, but there can be additional electricity and gas costs for running them. Energy efficient (newer) appliances are designed to save you money on your energy bills (meaning more savings towards your down payment) but the property owner is not obligated to upgrade appliances to more energy efficient units. As a renter you are using whatever appliances might be included with the property.
Cosmetics - As a renter you have few options when it comes to cosmetic improvement of your home. Typically owners have painted and wallpapered with materials that they get for a good price (adding to their savings) and while these materials are not necessarily bad, they may be in color schemes or designs that are not to your taste. As a renter, you often have to accept whatever colors the property owner has put inside the home. Check your lease carefully even if you're considering a wallpaper border addition as this could affect your security deposit (which can damage your down payment savings program).
Renters Face Security Concerns
Most rental properties do not have any specific type of security systems outside of locks. Alarm systems are not generally put into rental property by home owners due to the expense as well as some of the inconveniences of alarms going off in the middle of the night due to storms.
Locks - When you are renting and going through the property with the owner of the property you should check carefully the locks on doors and windows. Property owners while they do not risk the physical loss of property do have the risk of vandalism in the home. The property owner generally maintains a set of keys for their own when you are renting from them so do ask about changing locks if you feel it's appropriate.
Owning A Home Is An Investment
Perhaps the greatest reason to own your own home is the investment side of things. Owning a home is a great investment. It is a forced savings plan, a hedge against inflation, and a way to grow your wealth as the price of your property appreciates. If you are in it for the long term, owning a home is a solid investment. Renting, on the other hand, involves someone else enjoying your monthly rent check.
There are both pros and cons to buying a house. As the name of this site implies, we are very much in favor of owning a home rather than renting. If you are considering beginning a savings plan for your home down payment consider reading more in our renting versus owning series. The next article will discuss some of the hidden costs of owning a piece of property!
This article is written by guest author Doreen Martel exclusively for Save For House.