Do you feel as though it is difficult to do anything fun because most of your paycheck goes towards rent? You are not alone. According to the U.S. Bureau of Labor Statistics, nearly 44 million households in the country are renters.
However, there are numerous cons of renting a house, and rents have increased staggeringly over the years without warning. Many renters are feeling the pinch when it comes to managing their household incomes.
Several families struggle to put aside funds for a vacation due to the money they spend on keeping a roof over their heads. Here is everything you should know about the disadvantages of renting and why owning a house can be the answer to your rental woes.
1. Cannot Build Equity
For a lot of people, their monthly rent may cost less than a mortgage. However, where does all that money go? When you pay a mortgage, you can build a lot of equity.
But when you continuously keep paying rent, you do not get any big prize at the end. You will have to vacate the premises after your lease ends, and you may not have any ownership. When you keep renting, it can feel like there is no end in sight.
Your rent will keep increasing as the property market becomes more competitive. Whenever you renew your lease, you are at the mercy of your landlord and whether they will let you continue staying or not.
During this time, a lot of landlords also put up the rent, knowing that many tenants would rather pay the higher price than spend thousands of dollars on relocation costs.
One of the most significant advantages of buying a home is building equity with mortgage payments. Equity is the amount of the property you own and how much of your mortgage has been paid off.
Each time you pay off your mortgage, you become closer to owning your home and building equity. This equity can then be leveraged when you want to sell your house or apply for a loan in the future. Check out these home builders to boost the value of your property.
Read more: Options to Unlock Your Home Equity
2. It Does Not Help Your Credit Score
No matter how consistently you pay your rent on time, your credit score will stay the same. Even though your history of making rent payments will look impressive on paper, it will not matter to the credit authorities.
Credit bureaus may only know about your good deeds if you pay a fee to get them to care. Things are different when you own a home. Buying a house is always beneficial because paying off a mortgage can help you build your credit.
Then your credit score will go up, and you can use that to negotiate a different mortgage type or better terms when you want to refinance.
3. No Stability
One of the worst disadvantages of renting is that people do not get any stability. You pay to stay on somebody else’s property when you are a renter. Therefore, you are at their mercy regarding your next lease renewal.
Even if your children have taken their first steps in the living room or you have many beautiful memories with loved ones over the years, it does not matter. You will lack stability when you have to renew your lease every year or so.
This can also lead to more rent increases, motivating most people to leave and find cheaper accommodation. Things are much easier with a mortgage. When you sign up for a mortgage, you will expect to pay it back within 30 years.
If you have a fixed-rate mortgage, you can rely on having the same monthly payments no matter what happens. Until your mortgage is paid off or you refinance new terms and rates, you can enjoy all that stability for all those years without the bank pestering you to leave.
Then you never have to worry about getting a letter or a phone call saying that the owner wants to sell or move into the property themselves, which means you will need to be the one packing.
This can be an unfortunate situation for many families who raise children and make many precious memories that they must leave behind. Instead of putting your loved ones through this hassle, it is better to seek stability and security by having your own home to pass down.
4. No Control
Are you planning on having another baby in the family? What about a puppy that you and your partner have been thinking about? The downside for renters is that every decision needs to go through the landlord and property management company.
Renters always have to deal with limited décor options and numerous other community guidelines because they are renting someone else’s property. You must live by someone else’s rules unless you buy your own house.
When you have a mortgage to pay instead of rent, you can take advantage of the freedom you get over decorations, landscaping, and more. Then the house will become your space, and you can do whatever you like with it.
The choice is yours if you want to build a swimming pool or tear down a wall. You will not need to worry about a landlord coming for an inspection and getting angry if you painted the walls or moved the furniture around.
Avoid These Cons of Renting a House
Now that you know the top 4 cons of renting a house, it is time to look into mortgage options in your area. Even though getting a mortgage and owning a house can seem daunting, you will have a lot more security and freedom.
Imagine if you could stay in the same property without ever moving again. You would save a lot of money on relocation expenses.
Then your children can also feel secure knowing that no matter where in the world they are, they always have your home to return to if they need to feel safe. If you enjoyed reading this renting vs buying guide, check out some of our other posts.
Also read:
