1. Renters' Guide: Introduction
  2. Renters' Guide: Tenants, Landlords and Types of Leases
  3. Renters' Guide: Who Rents Property?
  4. Renters' Guide: Benefits of Renting
  5. Renters' Guide: Considerations When Finding a Rental
  6. Renters' Guide: Living with Roommates
  7. Renters' Guide: The Rental Process
  8. Renters' Guide: Renter's Insurance
  9. Renters' Guide: Trading Rent for Mortgage Payments
  10. Renters' Guide: Conclusion

Owning a home has long been regarded as an integral part of the American Dream, but the economic crisis of the late 2000s led many more people to consider the various benefits of renting. Young people are waiting longer to get married and start families. At the same time, student loan debt, lower earnings and tightened lending practices have created barriers to homeownership – all of which can make renting more practical. In addition, many people simply prefer renting over buying because it can offer more flexibility, less maintenance and less commitment. (For more, see Reasons Renting Is Better Than Buying.)

Amenities

A rental property may offer certain amenities that provide social, business and/or fitness opportunities for tenants. Some rental complexes offer an extensive list of amenities intended to entice and retain renters while improving the tenant's quality of life. These amenities may include:

  • after-school programs for kids
  • better storage options
  • business centers with video-conferencing capabilities
  • community gardens
  • concierge services
  • courtyards, playgrounds and nature trails
  • fitness centers with spa facilities and personal trainers
  • game rooms with billiards and game tables
  • juice and coffee bars
  • movie screening rooms with theater seating
  • on-site ATMs
  • outdoor fireplaces with seating areas
  • resident social activities
  • swimming pools
  • tennis courts

Career Flexibility

Renters are not locked into a location if the job market or economy shifts or if a new job opportunity comes up. Certain leases contain language (often called a termination clause) that allows tenants to terminate a lease early in exchange for a specified fee. A termination clause may specify acceptable reasons for early termination – such as a job transfer that’s more than 50 miles away. In some cases, the tenant may not be liable for any payment if the unit is re-rented within a certain time.

Sense of Community

Many rental properties offer social activities that allow neighbors to get to know one another while enjoying a planned activity. These programs can help foster a sense of community that tenants may find desirable. A sense of community provides opportunities for developing friendships, as well as a certain amount of security in knowing that neighbors will watch out for one another.

Financial Flexibility

Renters enjoy a degree of financial flexibility that’s unavailable to those with mortgages. If you run into financial trouble, it’s much easier to reduce monthly expenses without the added burden of a mortgage. In addition, money that you would have spent on a down payment and homeowner expenses (e.g., repairs and maintenance) can be invested – in a retirement account, life insurance, stocks, bonds and the like. (For related reading, see Investing 101: A Tutorial for Beginner Investors.)

Financial Stability

A renter's monthly expenses tend to be very predictable. Rent payments are the same each month, and utilities tend to be similar. Even more importantly, renters generally don’t have the unexpected expenses associated with owning a home, such as servicing the furnace, fixing a leaky roof or replacing the windows. (For more, see Top 10 States Where It’s Cheaper to Rent than Own.)

Lower Maintenance Costs

In general, landlords are responsible for maintenance issues both inside the individual unit and in the common areas. It’s in the landlord's best interest to maintain the property in a manner that will attract and keep tenants. In addition, under most state and local laws, landlords are required to fix major problems, such as broken steps and pest infestations, as well as maintain properties in a manner that satisfies basic habitability requirements, including clean and structurally sound premises, adequate weatherproofing, and available heat, clean water and electricity. (For related reading, see 7 Homeowner Costs Renters Don’t Pay.)

No Cash Outlay

The down payment and closing costs associated with buying a house can be substantial enough to prevent individuals and families from making a home purchase. An important benefit of renting is that there’s no cash outlay required other than the first month's rent and the security deposit.

No Market Risk

Buying a home can be thought of as an investment, just like putting money in the stock market. The money that’s invested in the home – through down payments and mortgage payments – is at risk. The home's value could appreciate, resulting in favorable gains , but it could also decrease, leaving homeowners with an underwater mortgage, where more money is owed than the current value of the home. (For more, see 5 Real Estate Fears That Keep You from Buying.)
 


Renters' Guide: Considerations When Finding a Rental
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