The article has been automatically translated into English by Google Translate from Russian and has not been edited.
Переклад цього матеріалу українською мовою з російської було автоматично здійснено сервісом Google Translate, без подальшого редагування тексту.
Bu məqalə Google Translate servisi vasitəsi ilə avtomatik olaraq rus dilindən azərbaycan dilinə tərcümə olunmuşdur. Bundan sonra mətn redaktə edilməmişdir.

10 reasons why renting a house is more profitable than buying

Owning your own home was part of the American dream, but times and costs have changed. Since the Great Recession, the percentage of home rentals in the United States has skyrocketed.

Photo: Shutterstock

In the first quarter of 2018, 41% of the housing market was less affordable than historical averages, according to ATTOM Data Solutions, a real estate data company. On the other hand, more and more people are choosing to rent rather than buy just because they feel like it, says Todd Barton, managing director of property management firm Renters Warehouse Atlanta.

“The American Dream has changed,” he said.

Edition GoBankingRates named 10 reasons why renting a house is more profitable than buying.

1. Mortgage Fee May Exceed Rent

Part of the reason for renting is that it is cheaper than owning a home, although owners can save tons of home remodeling costs with the right planning. If you're weighing your options, Barton suggests adding up all rental costs, including monthly rent, deposits, pets, and home maintenance fees, and then comparing that to the total mortgage for an equivalent property.

A recent study on rents and mortgages showed that it is cheaper to rent housing in 11 states throughout the country, as well as in the District of Columbia, than to buy it.

2. Real estate taxes can be very high.

If you live in a state with high real estate taxes, home ownership may be less affordable than renting, even if average mortgage costs are lower than average rental rates. There are things every homeowner should know.

The three states with the highest property tax rates in excess of 2 percent are New Jersey 2,38 percent, Illinois 2,32 percent and New Hampshire 2,15 percent, according to the Internal Revenue Fund. With New Jersey's current median home value of $ 313, this translates to a property tax of $ 560.

However, keep in mind that renting may not completely save you from high property taxes, as some of these costs are likely to be transferred to you by the owner of your apartment. Fortunately, as a tenant, you can easily find a cheaper place to stay if your landlord raises your rent too high.

On the subject: Top 15 cities where you can buy housing for less than $ 250 000

3. You will have to buy homeowners insurance

Homeowner's insurance varies depending on which insurance company you use, how much your home is worth, and other factors. But be that as it may, the insurance will cost something - and that's just another amount to be added to the cost of living.

“Home ownership is a long-term financial commitment,” said Jose Teejam, a Los Angeles-based realtor. "Your lender requires you to insure your property and must pay premiums along with your mortgage."

4. The market is volatile

Homeowners who bought their homes before the pandemic suffered huge losses in 2020. The cost of a home varies depending on market fluctuations. This means that you can spend more money on your home than you get as a result of the sale.

“There is no guarantee that the value of your home will increase over time,” Teejam said.

5. Housekeeping can deliver a significant blow to your budget.

Can you pay to replace the boiler if it breaks? Can you afford to repair or replace the roof if it leaks?

Some experts recommend annually allocating 1 a percentage of the purchase price of your home to pay for maintenance and repairs. This will amount to 3000 dollars a year if your home is worth 300 thousand dollars. However, if your home is old, you will need to put aside even more.

Tenants, on the other hand, can call their landlords to repair the property. When you sign a lease, you can even ask to paint a house, which, according to HomeAdvisor, costs an average of 2770 dollars.

Although some of these expenses will be transferred to you as a tenant, most likely this will not happen until the time comes to review the terms of your lease. But cost is not necessarily the worst part of the necessary home maintenance service.

“If you don’t want to do yard work, do renovations, renting may be the best option for your convenience,” Barton said.

6. Selling a house is onerous

Nobody wants to be burdened with an extra mortgage that is hard to pay off. Renting allows you to find a way out if your financial or life situation changes. But if you own a home and are forced to leave for whatever reason, you have to pay for that home - mortgage, taxes, maintenance, and everything else - until you can sell.

On the subject: What type of housing can I rent in major US cities for $ 1500

Unless you're planning to stay in the same location for an extended period, you should rent a home to avoid serious financial problems, says Deb Tomaro, a broker based in Indiana.

The worst time to buy is an unstable situation at work or in life. Tomaro talked about a client who was going through a divorce and was about to buy a new home immediately after moving. According to her, this is an unstable period and not the time to make such an important financial decision.

“I know he is going through difficult times in his life, but buying a home will make the situation even worse,” she said.

7. Temptation to overspending

When you buy a house, it may be tempting to increase the purchase price beyond what you can afford. For example, you may be tempted by a low interest rate adjustable rate mortgage. It may seem that the rate increase will be only in a few years. But, if this increase occurs, you may have to save to keep the roof over your head. If your financial capabilities have improved, then at the end of the rental period you can move to a better place, and vice versa, rent more affordable housing, if the situation has changed for the worse.

8. Your down payment may earn more elsewhere

Historically, buying a home hasn't been the most efficient investment of your hard-earned money, at just 3 percent a year.

On the subject: New York entered the top 5 cities in the world with the most expensive housing

Yes, both stocks and homes can also lose value. But with stocks, when you sell, at least you can deduct the loss from your tax return.

9. Mortgage can not lower your taxes

Mortgage interest only reduces your taxable income, not your tax account, so the amount you save depends on your marginal tax rate. For example, if you fall into the 25 percent tax category, then save 25 cents on taxes for every dollar you pay as a percentage. In addition, in order to claim a deduction of interest on mortgages, you must indicate your deductions. This means that you must waive the standard deduction of 12 000 USD for single, 18 000 USD for household heads and 24 000 USD for couples filing a joint application.

Other detailed deductions include state and local income taxes, property taxes, and charitable contributions. Thus, a mortgage interest deduction only reduces your tax account to the extent that your detailed deductions exceed your standard deduction.

10. You cannot move

If for any reason you need to move, you must pay 5 or 6 interest to real estate agents. For example, if you have to sell a house for 200 000 dollars, even if you can get the full asking price, an amount of 12 000 dollars will be deducted.

In addition, if you are offered a dream job or better prospects in another city, you may have to give up this opportunity if you are attached to a house that you cannot sell.

Read also on ForumDaily:

15 most expensive states to live in USA

Cities with the highest job growth in the country: how much they earn

Top 15 cities where you can buy housing for less than $ 250 000

USA rent Educational program buying a home
Subscribe to ForumDaily on Google News

Do you want more important and interesting news about life in the USA and immigration to America? Subscribe to our page in Facebook. Choose the "Display Priority" option and read us first. Also, don't forget to subscribe to our РєР ° РЅР ° Р »РІ Telegram - there are many interesting things. And join thousands of readers ForumDaily Woman и ForumDaily New York - there you will find a lot of interesting and positive information. 



 
1074 requests in 2,482 seconds.