We have heard about the merits of being a homeowner in Centennial. You gain a foothold in the property market, take delight seeing your name in the sale deed, and enjoy the freedom to make your own rules. But being a renter isn’t that bad. Actually, it can even be a blessing in disguise, especially in today’s economic climate that is full of uncertainty. Below are the main benefits practically exclusive to those who choose renting over buying a property:
1. A smaller down payment
By and large, affordable rental properties in Centennial, Colorado and the surrounding communities don’t require a lot of money up front. A landlord may only ask you to produce one month’s worth of rent as a deposit outside your regular payment. You will receive again if you leave the property in good condition when your lease is up or terminated. However, when you buy a house, you will be expected to put down about 5% of the property’s purchase price. If we use the latest reported median price of single-family homes at $257,600, the down payment will be $12,880.
2. Fixed rent
The agreed-on amount written in the contract is proof against market forces. Your landlord can’t do anything to increase it until your lease is subject for re-negotiation. However, if you have an adjustable-rate mortgage, there’s a good chance that you’ll experience bill shock. Your new monthly payment can increase substantially when a higher interest rate kicks in.
3. Zero real estate tax obligation
As the homeowner, your landlord is liable for the real estate tax on the property. As a renter, you have one less expense to worry about.
4. No maintenance responsibility
Of course, you’re expected to keep the unit clean and organized. However, when something gets broken, the repair costs will be on your landlord. The contract may specify which types of damage your landlord can’t hold you accountable for, but maintenance shouldn’t concern you if you’re a responsible renter.
5. Cheaper insurance costs
It’s wise to get renter’s insurance in case you fall victim to theft, but don’t expect your premium to be much lower than typical homeowner’s insurance rates. On average, renter’s insurance costs $12 a month while the smallest homeowner’s insurance premium is at $25.
6. Lower utility bills
The cost to power a house is relative to its size. Since a rental unit is usually more compact than an ordinary owner-occupied house, expect to pay less on electricity, particularly on space heating.
7. Less vulnerability to proper value fluctuations
The ever-changing nature of land values is frightening to homeowners, but it shouldn’t scare renters as much. After all, your contract protects your pocket from factors that can otherwise inflate your rent as long as it’s valid.
8. Greater downsizing flexibility
If you wish to move to a smaller unit, it’s more convenient to do as a renter, especially in an area with high rental demand. You can’t say the same if you own the house. Selling a property can be a long process, making it difficult to minimize monthly costs if the goal is to save money.
You may not want to be a renter forever, but don’t fret if it’s all you can be right now. There’s a time for everything. Don’t rush into buying a house. Wait until you can truly afford to purchase one and shoulder the costs associated with it.