Owning a home may be a lifelong goal for many Nigerians but that doesn’t mean it’s for everyone. Homeownership rates are currently low due to many reasons like Inflation, Income and so many other reasons; and in comparison to how things were it’s a bit hard to own a home. Although, for some people renting might make more sense for their financial circumstances. Below, we’ve listed 10 of the main advantages of renting instead of buying a home.
Minimal Maintenance Costs or Repair Bills
One of the benefits of renting a home is that there are minimal maintenance costs or repair bills. This means that when you rent a property, your landlord assumes full responsibility for all maintenance, improvement, and repairs. But this is dependent on your landlord and how much they are willing to cover while your tenancy is active.
Access to Amenities
Another financial benefit of renting is having access to amenities that would otherwise be an enormous expense. Luxuries such as an in-ground pool or a fitness centre come standard at many midscale to upscale apartment complexes with no additional charge to tenants.
If a homeowner wanted to have access to these amenities, they would likely have to spend thousands of dollars for installation and maintenance. Condo owners aren’t exempt from these costs either.
No Real Estate Taxes
One of the major benefits of renting versus owning is that renters don’t have to pay property taxes. Real estate taxes can be a hefty burden for homeowners and vary by state. In some areas, the costs associated with property taxes can amount to thousands of Naira each year.
No Initial Deposit
Another reason why renting could be better than buying is based on the financial deal i.e the up-front cost. Renters generally have to pay some fees like a caution and agreement fee, agent fee, etc. And that’s usually all. This deposit is theoretically returned to them when they move out, provided they haven’t damaged the rental property.
When purchasing a home, you’re required to have a sizable down payment.
Still, the amount needed for a down payment on a home is significantly more than a rental security deposit. Those who don’t have money for a down payment are better off renting.
More Flexibility As to Where to Live
Renters can live practically anywhere, while homeowners are restricted to areas where they can afford to buy. Living in an expensive city such as Lagos, Abuja or Port Harcourt may be out of reach for most home buyers, but it is entirely possible for renters. Although rents can be high in areas where home values are also high, renters are more apt to find an affordable monthly payment than home buyers.
Few Concerns About Decreasing Property Value
Property values go up and down. While this may affect homeowners in a big way, it affects renters substantially less, if at all. Your home value can impact the amount of property taxes you pay and the amount of your investment. In a rocky housing market, renters may not be as adversely affected as homeowners.
Flexibility to Downsize
Renters have the option to downsize to more affordable living spaces at the end of their lease. This kind of flexibility is especially important for retirees who want a less costly, smaller alternative that matches their budget.
It’s much more difficult to break free of an expensive house because of the fees involved with buying and selling a home. Also, if a homeowner has invested a significant amount of money in renovations, the selling price might not cover these costs, leaving them unable to afford to sell and move.
Fixed Rent Amount
The amount you pay for rent is fixed for the span of the lease agreement. While landlords can raise the rent with notice, you can budget more efficiently, because you know the amount of rent you are required to pay.
The Bottom Line
Owning a home can be beneficial for homeowners over the long run, due to the amount of equity they acquire in their home. Renters have nothing tangible to show for years of rental payments. However, for those who want to avoid the hassles associated with homeownership, the costs of upkeep, and property taxes, renting might be a better option. Of course, it depends on an individual’s lifestyle, financial situation, and whether they’re working or in retirement. Do you agree that renting could be better than buying?