Most people buy a house or a condo to be used personally. And some buy for investment. But of course, we will be talking about why people rent, and not about why people shouldn’t buy. Simply put, the advatages of renting and why people personally choose to rent. There are several good reasons.
1. He doesn’t want ownership responsibilities.
Sometimes a person can be too busy to handle responsibilities of home ownership. Keeping a property in good shape really deserve some attention specially if you are living in it. Fixing minor problems, pest control, painting and repainting, upgrading, such kind of tasks. Updating property taxes and insurances may need some serious attention too. A person could say, “Why not leave it all to the landlord?”. Well, as a rental business owner, you could say, “You’re right!”. And you just got another tenant.
2. He can relocate anytime.
Career people get the most advantage with this renting feature. With lesser commitment on the property, relocating is so easy as your career takes high on progress. The opposite is also true. Downgrading and upgrading is easy if you are renting. Let’s say, you got promoted and needed to be transferred to another city. No problem! In our new world, mobility is a big advantage (mobile phones, mobile computers, etc.). Woudn’t you want to ride the trend?
3. He wants to maintain liquidity.
When renting, you don’t have to pay large amount of money like the downpayment. So you can still keep your cash. Cash is king right? This may not be true at all times but it really feels safer if you have a good amount of cash savings, the most liquid asset. But this may also be connected of not having enough cash after the downpayment. So if a person knows that he could lose all his cash on the downpayment, sometimes he just prefer to rent. For me, liquidity is king.
4. He simply simply can’t afford it.
Sometimes a person simply doesn’t have a choice. He cannot afford a downpayment. Or maybe, he is still saving for a downpayment. High-end luxury rental units often benefit from this. The high price of luxury condos mean that there is less competition for luxury rental units. Which give them an opportunity to even charge a premium.
5. He can afford it, but buying may be too costly.
When home prices and interest rates are high, so are the monthly amortizations. So people prefer to rent. Experienced investors can easily know if it is cheaper to rent than to buy. This involves a keen observation of our economy and how it would perform in the coming future.
6. He is looking for a temporary home.
Location plays a big role here. A person stays near schools for temporary dwelling place while he takes his studies. That is why schools are considered as one of the best locations for condo apartment rental business. Vacation houses are being rented, well, while people are on vacation. Same as in short-term serviced apartments. Or can we can say that in general, all home rental transactions are based on a need for a temporary shelter?
7. He wants to try the neighborhood.
Some buyers prefer to try the community before buying a home. This is very common in rent-to-own or lease-to-own agreements between tenants and landlords. They want to make sure that everything conformes to their needs as home owners. Although nothing is perfect, they also want to know if some shortbacks are tolarable. And they may even transfer several times and compare their options before they finally settle.