Renters' Guide: Who Rents Property?
In general, people who rent property rather than buy a home do so either out of necessity or by choice. People who rent out of necessity may do so because they are:
- Saving for a down payment on a house
- unable to get approved for a mortgage
- required to relocate frequently for work, making owning a house impractical
People who rent by choice – an increasing percentage of the renter population – may do so because:
- They’re attracted to the benefits and flexibility of renting.
- They want to downsize and simplify their housing situation.
- Owning a home is not a priority.
Here’s a quick rundown of people who are likely to rent, along with potential reasons for doing so.
Many retirees sell their homes and rent in order to downsize. In addition, retirees are often attracted to the reduced maintenance responsibilities. As any homeowner knows, taking care of routine maintenance, such as mowing the lawn and cleaning the gutters, plus unexpected repairs like a leaky roof or cracking foundation, is both expensive and time consuming. Many homeowners who have been responsible for the maintenance and upkeep of their homes for many years look forward to handing off those duties during retirement. Later in retirement, health may be another reason for simplifying life. (For related reading, see Retirement Living: Renting Vs. Homeownership.)
Frequent travelers may find renting appealing because of the reduced maintenance responsibilities and the convenience (especially in an apartment setting) of having neighbors to keep watch over the empty unit. Additionally, travelers may be especially interested in amenities like an on-site business center and a 24-hour fitness center.
College and graduate students often rent to move out of campus housing. Renting may offer students more privacy, a more productive atmosphere for studying and the ability to cook their own meals (rather than use the school's cafeteria). Renting may also enable students to bring cars to school (some colleges don’t allow students to have cars on campus because parking is so limited), as well as have more room for sports equipment such as bikes or kayaks.
Individuals may prefer renting because of the simplicity, reduced financial obligations and access to social events. Singles may also appreciate the sense of community and the feeling of security that comes from having many neighbors nearby. In some cases, the financial requirements of a down payment and mortgage might encourage single people to continue renting as they build up savings. (For more, see To Rent or Buy? The Financial Issues.)
Young couples may choose to rent while they are saving for a down payment or before they decide on a location to settle down. While many couples continue to enjoy the benefits of renting indefinitely, others may use renting as a stepping stone to homeownership. Like most renters, young couples may also be attracted to the lack of maintenance responsibilities, which can free up time for social activities and work obligations. (For related reading, see To Rent or Buy? There’s More to It Than Money.)
Small families may be attracted to renting because of the financial flexibility, limited maintenance responsibilities and amenities. Many apartment complexes, for example, offer after-school care for kids – a valuable convenience for working parents – plus on-site swimming pools, tennis courts, playgrounds and game rooms.