Depending on your individual circumstances, leasing a home may be an improved option for you than purchasing one. There are lots of advantages of leasing houses rather than becoming a homeowner, all centering around finances and freedom. Before you make the decision to lease or buy, investigate advantages and disadvantages of leasing a home.
Tip
When not used to an area, it makes sense to lease a house first, gaining knowledge of the neighborhood and its surroundings before taking the huge financial step of buying a home.
Investing for Less
Leasing a home requires only a security deposit and first and last month’s rent, with regards to the lease agreement. You’ll pay significantly less money to enter a lease agreement than it is to buy a home, because buying often requires a substantial down payment. Also, leasing a home doesn’t require securing a mortgage – you need and then be approved by the landlord. Leasing will not increase your debt obligations like a home mortgage loan does. You will also prevent the accumulated costs of running a home, such as property taxes, homeowner’s insurance and interest on the mortgage.
Performing Fewer Repairs and Maintenance
Your budget could be more predictable when leasing a residence because you aren’t in charge of the upkeep, maintenance and repairs. Like a tenant, you can pay rent plus some or all the utilities, depending on lease agreement. If you don’t or your guests cause damage to the house, your landlord must purchase repairs and replacements when things fail. From broken appliances to pest infestations, the price tag on home upkeep is reserved for homeowners, not tenants. Even tasks such as lawn care and appliance tune-ups participate in the landlord. Your lease agreement will outline exactly what maintenance should be achieved by tenants and what is the landlord’s responsibility.
Having More Flexibility
A lease agreement is normally set for 12 months, giving you the chance to re-locate when the word is up. To get rid of your lease agreement, you simply need to notify your landlord in writing with enough advance notice. You’ll even be entitled to refund of your security deposit, assuming there are no damages to the property. When moving out of a house that you possess, you must put it on the market. The speed of which it sells is damaged by the housing market, as is the sale price. The house might not exactly sell, or it could sell for significantly less than it is worth, with respect to the economic conditions and the home’s marketability. If you know you will be within an area for under five years, leasing is more cost-effective than buying. And leasing a home allows you to come and go as needed.
No Loss of Equity or Property Value
When you lease a home, you will not have to worry about the worthiness of the house going up and down because of the housing marketplace. A home can be considered a good investment if the worthiness of the house goes up after you’ve purchased it, creating equity. If the property’s value decreases, you lose equity. Tenants who lease homes avoid fluctuations in real estate and neither gain nor lose.