INSURANCE . RETIREMENT . INVESTMENTS
Renting: a binding and legal agreement between two individuals where payment is exchanged for a particular service or product. Are you a renter or considering renting? Is renting an economical choice? What are the benefits or drawbacks of renting?
All excellent questions that we will be providing the answers to in today’s blog, where we examine the Pros and Cons of Renting.
1. Living in an area you could not afford to buy - Are there some neighbourhoods you want to live but just cannot afford to purchase a home in at this time? The value of housing differs from place to place, with some locations being quite costly to the average individual. With renting however, you are able to live in these places easily as the monthly or annual cost is a fraction of purchasing a house there.
2. Convenience - Renting provides convenience especially for individuals who choose to rent closer to school or work to relieve the burdens and costs of transport from themselves. For example, University students who live hours away from Campus may weigh the benefits of renting an apartment nearby instead of facing the grueling task of going home at the end of the day. Similarly, working professionals who live far distances may also choose to rent in closer proximity to their workplace to avoid difficulties with transport.
3. Financial Ease - Renting an apartment/home is generally more affordable than taking out a mortgage, particularly for young working professionals who do not meet the requirements for a mortgage. In these cases, renting is seen as an interim choice as it gives you the time needed to save and meet the requirements.
4. Flexibility - A great benefit of renting is the option for short-term stay. Renters have the freedom to negotiate with landlords on the duration of their stay, which is useful to students and young professionals. Students are able to negotiate shorter leases based on the duration of their studies and young professionals enjoy the freedom of short-term renting based on their current job location; they are therefore able to change locations quickly based on the availability of jobs.
5. Less responsibility - There is less responsibility attached to renting than owning your own home and this is an attractive benefit for many. Some rentals come with utilities included in the overall monthly rental fee, which saves you the trouble of having to pay for individual utility bills yourself. In addition, apartment complexes have hired Maintenance staff who perform routine checks, inspections and upgrades entirely free of cost.
1. Lack of control - Despite paying rent for your own living arrangements, you are still subject to the Landlord-Tenant laws and your landlord’s personal rules. Whether it is your landlord performing inspections of your apartment or mandating that pets are not allowed in the apartment, lack of control is definitely a disadvantage of renting and is a popular factor that discourages many.
2. Annual Rental Fluctuations - Renters are not immune to annual rental fluctuations which are based on a variety of factors: Market value of the property, the market for renters, historical trends, infrastructural development in the area and negotiation tactics. Therefore, the monthly or yearly rental amount for a property is not fixed and it is subject to increase based on the aforementioned factors.
3. No Ownership - Renting offers you no ownership value and it is not an investment regardless of the length of time you have rented a place or the amount of money that was put into it. This is a major disadvantage of renting, when compared to home ownership, where the value of your home appreciates overtime and offers you equity that you can use as an asset. Renting does not provide this and renting agreements do not create ownership equity of an apartment.
4. Third-Party Rental Agents - When renting some properties, discussions may have to be done through a Rental Agent instead of directly with the landlord and owner of the property. This is not the same with all landlords, but for the ones that do have such protocol, this third-party involvement increases the length of time for concerns to be addressed as it must first be conveyed to the Rental Agent, who then in turn passes the information on to the Landlord. This is not only time-consuming, but gives way for a breakdown of communication between all parties
5. Limited personalization - You may consider your apartment your home, but unlike homes, you cannot personalize as you see fit. Rental clauses such as “No Modification” are commonly seen in leases, which indicate that you are not allowed to make changes, and the apartment/house must be kept as in its original state. Repainting of walls, installing new electrical wiring or new light installations would either be prohibited or require permission from your landlord. This can become frustrating as you are not allowed to decorate or modify freely as you would with your own home.
What do you think? Did these pros and cons provide you with information to consider when renting an apartment? We hope that it did! This brings us to the end of this week’s blog, please join again next week!