Part of the American dream is to own a home, but the American dream is shifting. With skyrocketing student loans, lower wages, and a challenging consumer economy, choosing a rental property over a mortgage may actually be the best option.
Predictable monthly budget
Most people have a fixed income, which means any change to your bills, and you may quickly find yourself in debt. As a homeowner, you have to contend with costly and sudden repairs. You are also responsible for paying taxes directly. If taxes increase in your area, you’ll be stuck footing the bill.
When it comes to a rental property, you aren’t responsible for repairing A/C units or septic systems; your landlord is. In addition, taxes are most likely included in your monthly rent, so if tax rates increase mid-year, you don’t have to worry about it affecting your monthly rent amount.
Easy to change your life situation
Life changes, and it can change quickly and without warning. When you own a home, relocating to another city for a better job is nearly impossible. In addition, if you learn that your family will soon be expanding, but you don’t have enough room for a little one, you can quickly begin to feel trapped in your home, especially if you can’t get it sold before a major life change takes place.
Moving in and out of a rental property is fairly straightforward. You can move out at the end of your lease with no consequences. For a fee, you can even break your lease early without having to wait around for someone else to fill the unit you’ve vacated.
Owning a home has inherent risks. Not only can taxes fluctuate, as mentioned above, but your property value may decrease, which may end up causing you to owe more on your house than it is worth. A rental property, on the other hand, doesn’t come with these risks.